Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

LTC Company, a manufacturing firm, had the following inventory balances at the beginning and end of the current year. Inventory Account : Work-in-process inventory, 1

LTC Company, a manufacturing firm, had the following inventory balances at the beginning and end of the current year.

Inventory Account:

Work-in-process inventory, 1 January 2019 : $ 288,000

Work-in-process inventory, 31 December 2019: $ 286,000

Raw materials inventory, 1 January 2019 : $ 150,000

Raw materials inventory, 31 December 2019: $ 158,000

Finished goods inventory, 1 January 2019: $ 370,000

Finished goods inventory, 31 December 2019 : 388,000

During the year, the company purchased $620,000 of raw materials and spent $970,000 on direct labour. The actual machine hours incurred was 31,850 hours.

Manufacturing overhead costs were as followed:

Indirect Material: $ 26000

Indirect Labour : $ 64,000

Depreciation on Plant and Equipment : $ 250,000

Electricity : 66,000

Other : 76,000

LTC Company allocates manufacturing cost to work in process on the basis of machine hours. The budgeted manufacturing overhead for the year was $480,000 and the budgeted machine hours were 32,000 hours.

Sales revenue was $2,640,000 for the year. Sales and administrative expenses amounted to $274,000.

Required: Show ALL your workings and prepare

  1. (i)Schedule of Cost of Goods Manufactured for 2019
  2. (ii)Cost of Goods Sold Report, for 2019
  3. (iii)Income Statement for 2019
  4. (iv)Explain the differences between a prime and conversion cost.
  5. (v)Explain the difference between a product cost and a non-manufacturing cost.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Shenanigans

Authors: Howard Schilit

2nd Edition

0071386262, 9780071386265

More Books

Students also viewed these Accounting questions

Question

1. To understand how to set goals in a communication process

Answered: 1 week ago