Assessment #1 Cost Classification Inventory valuation Question 1 (25 marks) Leather Authentic Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2023 calendar year. Sales Revenue Total Utilities $14,275,000 Direct Factory Labor 3,877,400 Indirect Factory Labor 1,232,250 Total Depreciation 400,000 2 525,000 Distribution & Customer Service Costs 76,800 75,200 585,000 90,000 1,076,000 57,700 Hireage of Special Labeling Equipment Insurance on Plant & Equipment Property Taxes 3 Administrative Wages & Salaries Advertising Expenses Sales Commission 6% of Sales Revenue '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: Raw Materials 1/1/2023 Purchases 31/12/2023 $750,000 $4,330,000 $807,000 Indirect Materials 55,000 320,000 71,500 Work in Progress Finished Goods 1,115,400 n/a 924,000 1,142,600 n/a 1,720,200 Required: a) Calculate the raw material used by Leather Authentic Company. b) Calculate the indirect materials used by Leather Authentic Company (2 marks) (2 marks) c) What is the total manufacturing overhead cost incurred by Leather Authentic Company during the period? d) Determine the prime cost & conversion cost of the cases manufactured. (3 marks) (3 marks) e) Prepare a schedule of cost of goods manufactured for the year ended December 31, 2023, clearly showing total manufacturing cost & total manufacturing costs to account for. (5 marks) December 31, 2023. List (6½ marks) f) Prepare an income statement for Leather Authentic Company for the year ended the non-manufacturing overheads in order of size starting with the largest. g) What is the selling price per case if Leather Authentic manufactured 9,600 cases for tablets for the and uses a mark-up of 50% on cost? (2 marks) year h) How does the format of the income statement for a manufacturing concern differ from the income statement (1½ marks) of a merchandising entity?

Assessment #1 Cost Classification Inventory valuation Question 1 (25 marks) Leather Authentic Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2023 calendar year. Sales Revenue Total Utilities $14,275,000 Direct Factory Labor 3,877,400 Indirect Factory Labor 1,232,250 Total Depreciation 400,000 2 525,000 Distribution & Customer Service Costs 76,800 75,200 585,000 90,000 1,076,000 57,700 Hireage of Special Labeling Equipment Insurance on Plant & Equipment Property Taxes 3 Administrative Wages & Salaries Advertising Expenses Sales Commission 6% of Sales Revenue '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: Raw Materials 1/1/2023 Purchases 31/12/2023 $750,000 $4,330,000 $807,000 Indirect Materials 55,000 320,000 71,500 Work in Progress Finished Goods 1,115,400 n/a 924,000 1,142,600 n/a 1,720,200 Required: a) Calculate the raw material used by Leather Authentic Company. b) Calculate the indirect materials used by Leather Authentic Company (2 marks) (2 marks) c) What is the total manufacturing overhead cost incurred by Leather Authentic Company during the period? d) Determine the prime cost & conversion cost of the cases manufactured. (3 marks) (3 marks) e) Prepare a schedule of cost of goods manufactured for the year ended December 31, 2023, clearly showing total manufacturing cost & total manufacturing costs to account for. (5 marks) December 31, 2023. List (6½ marks) f) Prepare an income statement for Leather Authentic Company for the year ended the non-manufacturing overheads in order of size starting with the largest. g) What is the selling price per case if Leather Authentic manufactured 9,600 cases for tablets for the and uses a mark-up of 50% on cost? (2 marks) year h) How does the format of the income statement for a manufacturing concern differ from the income statement (1½ marks) of a merchandising entity?

Quickbooks Online Accounting

3rd Edition

ISBN:9780357391693

Author:Owen

Publisher:Owen

Chapter4: Operating Activities: Sales And Cash Receipts

Section: Chapter Questions

Problem 1.3C

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