explain why you think this method is better. costs? Provide calculat costing? Explain. ions, and production-based costing or with activity-based this method compatible with Hayward Company, a manufacturing firm, has from its accounting records for the year 2004 (in thousands of dolilarmation Direct labor cost $10,500 15,000 Purchases of materials Supplies used Factory insurance 350 2.500 2,225 800 3,745 12,500 14,250 3,475 9,500 6,685 4,250 Commissions paid Factory supervision Advertising Material handling Work-in-process inventory, December 31, 2003 Work-in-process inventory, December 31, 2004 Materials inventory, December 31, 2003 Materials inventory, December 31, 2004 Finished goods inventory, December 31, 2003 Finished goods inventory, December 31, 2004 Required 1. Prepare a statement of cost of goods manufactured. 2. Prepare a statement of cost of goods sold. Lance Peckam owns and operates three Confiable Muffler outlets in Tucson, Ari- zona. Confiable Muffler specializes in replacing mufflers with mufflers that have a lifetime guarantee. Confiable is a franchise popular throughout the Southwest. In April, purchases of materials equaled $200,000, the beginning inventory of materials was $26,300, and the ending inventory of materials was $14,250. Payments to direct labor during the month totaled $53,000. Overhead incurred was $120,000. The Tucson outlets also spent $15,000 on advertising during the month. A franchise fee of $3,000 per outlet is paid every month. Revenues for April were $500,000. Required 1. What was the cost of materials used for muffler-changing services during April? 2. What was the prime cost for April? 3. What was the conversion cost for April? 4. What was the total service cost for April? 5. Prepare an income statement for the month of April. ement; Cost ervice Company 6. Confiable purchases all its mufflers from Remington Company, a manufacturer of mufflers. Discuss the differences between the products offered by Remington and Confiable. Parker Company produces chemicals used in the mining industry. Each plant is ded- icated to producing a single industrial chemical. One of its plants produces an electrolyte used in the copper industry's solvent extraction recent year, the electrolyte plant produced and sold 2,000,000 pounds of trolyte. No inventories of the chemical are carried. The chemical sells for $2.00 per pound. Annual manufacturing costs for the electrolyte plant totaled $2,800,000. The plant is also responsible for packaging and shipping its products. Distribution and packaging costs for the electrolyte plant were $200,000. Research and develop- ment sales revenues. The revenues of the electrolyte plant were 25 percent of the total revenues of the company. For the year just completed, the company reported $1.2 million for research and development. The company also reported $320,000 in sales commission nt; Product process. During the most costs are incurred centrally and assigned to each plant in proportion to their s. Commissions are also assigned to plants in proportion to sales