Leather Authentic Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2023 calendar year. Sales Revenue Direct Factory Labor $14,275,000 3,877,400 Indirect Factory Labor 1,232,250 Total Depreciation ¹ 400,000 Total Utilities 2 525,000 Distribution & Customer Service Costs 76,800 Hireage of Special Labeling Equipment 75,200 Insurance on Plant & Equipment 585,000 Property Taxes 3 90,000 Administrative Wages & Salaries 1,076,000 57,700 Advertising Expenses Sales Commission 6% of Sales Revenue ¹ 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: Indirect Materials Raw Materials 1/1/2023 Purchases 31/12/2023 $750,000 $4,330,000 $807,000 55,000 320,000 n/a n/a 71,500 924,000 1,720,200 Work in Progress 1,115,400 Finished Goods 1,142,600 Required: a) Calculate the raw m rial used by Leather Authentic Company b) Calculate the indirect materials Authentic Company (2 marks) (2 marks) 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 year and uses a mark-up of 50% on cost? (2 marks) h) How does the format of the income statement for a manufacturing concern differ from the income statement of a merchandising entity? (1½ 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 Direct Factory Labor $14,275,000 3,877,400 Indirect Factory Labor 1,232,250 Total Depreciation ¹ 400,000 Total Utilities 2 525,000 Distribution & Customer Service Costs 76,800 Hireage of Special Labeling Equipment 75,200 Insurance on Plant & Equipment 585,000 Property Taxes 3 90,000 Administrative Wages & Salaries 1,076,000 57,700 Advertising Expenses Sales Commission 6% of Sales Revenue ¹ 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: Indirect Materials Raw Materials 1/1/2023 Purchases 31/12/2023 $750,000 $4,330,000 $807,000 55,000 320,000 n/a n/a 71,500 924,000 1,720,200 Work in Progress 1,115,400 Finished Goods 1,142,600 Required: a) Calculate the raw m rial used by Leather Authentic Company b) Calculate the indirect materials Authentic Company (2 marks) (2 marks) 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 year and uses a mark-up of 50% on cost? (2 marks) h) How does the format of the income statement for a manufacturing concern differ from the income statement of a merchandising entity? (1½ marks)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 1PB: Hicks Products produces and sells patio furniture through a national dealership network. They...

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