Question
Pro-Leather Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2020 calendar year. Sales Revenue $14,275,000 Direct
Pro-Leather Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2020 calendar year.
Sales Revenue | $14,275,000 |
Direct Factory Labor | 3,952,600 |
Indirect Factory Labor | 1,232,250 |
Total Depreciation | 400,000 |
Total Utilities | 525,000 |
Distribution & Customer Service Costs | 76,800 |
Insurance on Plant & Equipment | 585,000 |
Property Taxes | 90,000 |
Administrative Wages & Salaries | 1,076,000 |
Advertising Expenses | 57,700 |
Sales Commission | 6% of Sales Revenue |
1) Of the total depreciation, 80% relates to factory plant & equipment and 20% relates to general and administrative costs
2) Of the total utilities, 75% relates to production and 25% relates to general and administrative costs.
3) The property taxes should be shared: 85% production & 15% general & administrative costs
The following additional information is also available:
Inventory Data: | 1/1/2020 | Purchases | 31/12/2020 |
Raw Materials | $750,000 | $4,330,000 | $807,000 |
Indirect Materials | 55,000 | 320,000 | 71,500 |
Work in Progress | 1,115,400 | n/a | 924,000 |
Finished Goods | 1,142,600 | n/a | 1,720,200 |
Required:
1) Calculate the raw material used by Pro-Leather Company.
2) Calculate the indirect materials used by Pro-Leather Company
3) What is the total manufacturing overhead cost incurred by Pro-Leather Company during the period?
4) Determine the prime cost & conversion cost of the cases manufactured.
5) Prepare a schedule of cost of goods manufactured for the year ended December 31, 2020, clearly showing total manufacturing cost & total manufacturing costs to account for.
6) Prepare an income statement for Pro-Leather Company for the year ended December 31, 2020. List the non-manufacturing overheads in order of size starting with the largest.
7) What is the factory cost per case if Pro-Leather manufactured 19,200 cases for tablets for the year?
8) How does the format of the income statement for a manufacturing concern differ from the income statement of a merchandising entity?
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