Question
The following information pertains to the most recent quarter at Builders Production Limited. Purchases of raw materials 384,000 Raw materials inventory, beginning 46,400 Raw materials
The following information pertains to the most recent quarter at Builders Production Limited.
Purchases of raw materials 384,000
Raw materials inventory, beginning 46,400
Raw materials inventory, ending 76,000
Depreciation, factory 208,000
Insurance, factory 21,600
Direct labour 251,200
Maintenance, factory 126,400
Administrative expenses 292,800
Sales 2,184,000
Utilities, factory 116,000
Supplies, factory 4,160
Selling expenses 334,400
Indirect labour 271,200
Work in process inventory, beginning 28,800
Work in process inventory, ending 123,200
Finished goods inventory, beginning42,400
Finished goods inventory, ending 169,600
Requirement 1:
1. Prepare a schedule of cost of goods manufactured.
Requirement 2:
2. Prepare an income statement.
Requirement 3:
3. Assume that the company produced the equivalent of 15,000 units of product during the quarter.
What was the average cost per unit for direct labour? What was the average cost per unit for factory
insurance?
Requirement 4:
4. Assume that the company expects to produce 17,000 units of product during the coming quarter.
What average cost per unit and what total cost would you expect the company to incur for direct
materials at this level of activity? For factory insurance? (In preparing your answer, assume that
direct materials is a variable cost and that factory insurance is a fixed cost.)
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