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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Do question c, d and e only please
Transcribed Image Text: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?
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