PR 16-58 Flow of costs and income statement Obj. 2 t, incoms0 Technology Accessories Inc. is a designer, manufacturer, and distributor of accessories for consumer $656.000 electronic products. Early in 2013, the company began production of a leather cover for tablet computers, called the iLeather. The cover is made of stitched leather with a velvet interior and Fits snugly around most tablet computers. In January, $750,000 was spent on developing market- ing and advertising materials. For the first six months of 20Y3, the company spent an additional EXCEL TEMPLATE $1.400,000 promoting the ileather. The product was ready for manufacture on January 21, 20Y3. Technology Accessories Inc. uses a job order cost system to accumulate costs for the ileather Direct materials unit costs for the ileather are as follows $10.00 5.00 0.40 $15,.40 Leather Velvet kaging Total The actual production process for the ileather is fairly straightforward. First, leather is brought to a cutting and stitching machine. The machine cuts the leather and stitches an exte- rior edge into the product. The machine requires one hour per-125 iLeathers. After the ileather is cut and stitched, it is brought to assembly, where assembly personnel affix the velvet interior and pack the ileather for shipping. The direct labor cost for this work is $0.50 per unit. (Continued 826 Chapter 16 Job Order Costing The completed packages are then sold to retail outlets through a sales force. Th Total completed production was 500,000 units during the year. Other inf e sales is compensated by a 20%commission on the wholesale price for all sales. Orma s as follows: Number of iLeather units sold in 20Y3 Wholesale price per unit 460,000 $40 Factory overhead cost is applied to jobs at the rate of $1,250 per machine hour an additional 22,000 cut and stitched ileathers waiting to be assembled on Instructions December 31, 20Y3 Prepare an annual income statement for the ileather product, includirn tions, from the information provided g supporting calcul 2. Determine the balances in the finished goods and work in process inventories fo ileather product on December 31, 20Y3