QUESTION 1 QUESTION 1: Schedule of Cost of Goods Manufactured: Income Statement. Richmond Chocolates Limited, a manufacturing Company, produces a single product. The following information has been taken from the companys production, sales and cost records for the year ended December 31, 2021. Sales $ 450,000 Indirect Labour 12,000 Utilities 15,000 Direct Labour 70,000 Depreciation, factory equipment 21,000 Raw materials purchased 165,000 Depreciation, sales equipment 18,000 Insurance expired during the year 4,000 Rent on facilities 50,000 Selling and administrative salaries 32,000 Advertising 75,000 Additional information about the company follows: a. Some 60 percent of the utilities costs and 75 percent of the expired insurance apply to factory operations. The remaining amounts apply to selling and administrative activities b. Only 80 percent of the rent on facilities apply to factory operations: the remainder applies to selling and administrative activities. c. Total production for the year was 620,000 units. d. Inventories: Inventory 1/1/2021 31/12/2021 Raw Materials $ 8,000 $ 13,000 Work in Progress 16,000 21,000 Finished Goods 40,000 60,000 Required: 1. Calculate the prime cost & conversion cost of the chocolates produced. (3 marks) 2. Compute the average production cost per unit during the year. (2 marks) 3. Prepare a schedule of cost of goods manufactured for the year. (21 marks) 4. Prepare an income statement for the year. (19 marks) QUESTION 2 High-Low Method; Scattergraph Analysis The following data below relates to units shipped and total shipping expense have been assembled by Macey Company, a wholesaler of large, custom-built solar water heaters for private households: Month Units shipped Total Shipping Expense January 3 $ 1,800 February 6 $ 2,300 March 4 $ 1,700 April 5 $ 2,000 May 7 $ 2,300 June 8 $ 2,700 July 2 $ 1,200 Required: 1. Using the high-low method, estimate a cost formula for shipping expense. (8 marks) 2. Express the cost formula as a linear equation in the form Y=a + bX. (2 marks) 3. Assume that 9 units are budgeted for the month of August. Use the cost formula above to calculate: a. The total variable cost for shipping for the month of August (2 marks) b. The total cost of shipping for the month of August. (3 marks) 4. Which method separating mixed cost is most accurate? Provide reasons for your answer based on the strengths and weaknesses of the various methods used for separating mixed costs. (5 marks) 5. The president of the company has no confidence in the high-low method and would like you to check your results using a scattergraph. a. Prepare a scattergraph, using the data given above. Plot cost on the vertical axis and activity on the horizontal axis. Use a ruler to fit a straight line to your plotted points. (5 marks) b. Using your scattergraph, estimate the approximate variable cost per unit shipped and the approximate fixed cost per month. (5 marks)