Question
Cost Assignment Methods Brody Company makes industrial cleaning solvents. Various chemicals, detergent, and water are mixed together and then bottled in 10-gallon drums. Brody provided
Cost Assignment Methods
Brody Company makes industrial cleaning solvents. Various chemicals, detergent, and water are mixed together and then bottled in 10-gallon drums. Brody provided the following information for last year:
Raw materials purchases | $280,000 |
Direct labor | 140,000 |
Depreciation on factory equipment | 45,000 |
Depreciation on factory building | 30,000 |
Depreciation on headquarters building | 60,000 |
Factory insurance | 15,000 |
Property taxes: | |
Factory | 20,000 |
Headquarters | 18,000 |
Utilities for factory | 34,000 |
Utilities for sales office | 1,800 |
Administrative salaries | 150,000 |
Indirect labor salaries | 153,000 |
Sales office salaries | 90,000 |
Beginning balance, raw materials | 127,000 |
Beginning balance, work in process | 124,000 |
Beginning balance, finished goods | 84,000 |
Ending balance, raw materials | 105,000 |
Ending balance, work in process | 130,000 |
Ending balance, finished goods | 85,000 |
Last year, Brody completed 100,000 units. Sales revenue equaled $1,200,000, and Brody paid a sales commission of 5 percent of sales.
Required:
1. Calculate the direct materials used in production for last year.
2. Calculate total prime cost.
3. Calculate total conversion cost.
4/ Prepare a cost of goods manufactured statement for last year.
5. Prepare a cost of goods sold statement for last year.
6. Prepare an income statement for last year showing the percentage of sales that each line item represents.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started