Hickey Company Hickey Company, a manufacturing firm, produces a...

          Hickey Company

Hickey Company, a manufacturing firm, produces a single product. The following information has been taken from the company's production, sales, and cost records for the just-completed year, 2017:

Production in units of                                                                                  30,000

Sales in units                                                                                                 26,000

Ending finished goods inventory in units                                                    4,000

Sales in dollars                                                                                              $650,000

Costs:

           Advertising                                                                                       $50,000

           Direct labor                                                                                       $80,000

           Indirect labor                                                                                     $60,000

           Raw materials purchased                                                                  $160,000

           Building rent (production uses 80% of the space; administrative 

and sales offices use the rest)                                                           $50,000

           Utilities, factory                                                                               $35,000

           Royalty paid for use of production patent, $1 per unit produced?

Maintenance, factory                                                                        $25,000

Rent for special production equipment, $6,000 per year plus

 $0.10 per unit produced?

Selling and administrative salaries                                                     $140,000

Other factory overhead costs                                                           $11,000

Other selling and administrative expenses                                        $20,000

                                                           Beginning     End

                                                           Of Year         Of Year

Inventories:

           Raw materials                        $20,000          $10,000

           Work in process                     $30,000          $40,000

           Finished goods                       $0                   $60,000

The finished goods inventory is carried at the average unit production cost for the year.

The selling price of the product is $25 per unit.

Required:

1. Prepare a schedule of the cost of goods manufactured for the year. (14 marks)
2. Compute the cost of goods sold. (2 marks)
3. Compute Gross margin. (2 marks)