Gourmet Bones manufactures its own brand of pet chew bones. At the end of December 2018, the accounting recods showed the following: Beginning Ending Direct Materials $13,500 $7,500 Work in Process Inventory 0 $3,500 Finished Goods Inventory 0 $5200 Other Information: Direct materials purchases $ 36,000 Plant janitorial servieces 700 Sales salaries 6,000 Delivery costs 1,300 Net sales revenue 107,000 Utilites for plant 1,300 Rent on plant 17,000 Customer service hotline costs 1,200 Direct labor 23,000 Requirements 1. Prepare a schedule of cost of goods manufactured for Gourmet Bones for the year ended December 31,2018. 2. Prepare an income statement for Gourmet wBones for the year ended December 31,2018. 3. How does the format of the income statement for Gourmet Bones differ from the income statement of a merchandiser? 4. Gourmet Bones manufactured 17,900 units of its product in 2018. Compute the company's unit product cost for the year, rounded to the nearest cent.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Gourmet Bones manufactures its own brand of pet chew bones. At the end of December 2018, the accounting recods showed the following:
Beginning Ending
Direct Materials $13,500 $7,500
Work in Process Inventory 0 $3,500
Finished Goods Inventory 0 $5200
Other Information:
Direct materials purchases $ 36,000
Plant janitorial servieces 700
Sales salaries 6,000
Delivery costs 1,300
Net sales revenue 107,000
Utilites for plant 1,300
Rent on plant 17,000
Customer service hotline costs 1,200
Direct labor 23,000
Requirements
1. Prepare a schedule of cost of goods manufactured for Gourmet Bones for the year ended December 31,2018.
2. Prepare an income statement for Gourmet wBones for the year ended December 31,2018.
3. How does the format of the income statement for Gourmet Bones differ from the income statement of a merchandiser?
4. Gourmet Bones manufactured 17,900 units of its product in 2018. Compute the company's unit product cost for the year, rounded to the nearest cent.
Cost Of Goods manufactured
= Beginning Work In process Inventory
+ Cost of Direct Material used
+ Direct Labor
+ Manufacturing Overhead
- Ending Work in Process Inventory
Unit product cost
= Cost Of Goods manufactured / Number of Units
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