Kildeer Company makes easels for artists. During the last calendar year, a total of 30,000 easelswere made, and 31,000 were sold for $52 each. The actual unit cost is as follows: Direct materials $14.70Direct labor 5.80Variable overhead 3.25Fixed overhead 15.25Total unit cost $39.00 The selling expenses consisted of a commission of $1.30 per unit sold and advertising co-payments totaling $95,000. Administrative expenses, all fixed, equaled $183,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was$132,600 for 3,400 easels.Required:1. Calculate the number and the dollar value of easels in ending finished goods inventory.2. Prepare a cost of goods sold statement.3. Prepare an absorption-costing income statement. Add a column for percentage of sales.
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.
Kildeer Company makes easels for artists. During the last calendar year, a total of 30,000 easels
were made, and 31,000 were sold for $52 each. The actual unit cost is as follows:
Direct materials $14.70
Direct labor 5.80
Variable
Fixed overhead 15.25
Total unit cost $39.00
The selling expenses consisted of a commission of $1.30 per unit sold and advertising co-
payments totaling $95,000. Administrative expenses, all fixed, equaled $183,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was
$132,600 for 3,400 easels.
Required:
1. Calculate the number and the dollar value of easels in ending finished goods inventory.
2. Prepare a cost of goods sold statement.
3. Prepare an absorption-costing income statement. Add a column for percentage of sales.
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