Part 1 Shades of the Caribbean design and manufacture sun-glasses for the tourism sector. The accounting records of the business reflect the following data at June 30, 2018: Inventory        1/7/2017      30/6/2018 Raw Materials $230,000     $260,000 Factory Supplies $35,000    $24,000 Work in Progress $358,000 $213,000 Finished Goods $975,400 $585,000 Other information: Sales Revenue $5,675,000 Factory Supplies Purchased 64,000 Direct Factory Labor 792,000 Raw Materials Purchased 560,000 Plant janitorial service 37,000 Depreciation: Plant & Equipment 186,000 Total Utilities 1 481,250 Production Supervisor’s Salary 450,000 Hiring of Specialized Manufacturing Equipment 68,000 Insurance on Plant & Equipment 112,000 Delivery Vehicle Drivers’ Wages 189,000 Depreciation: Delivery Vehicle 53,850 Property Taxes 2 240,000 Administrative Wages & Salaries 850,750 Advertising Expenses 1% of Sales Revenue 1 Of the total utilities, 80% relates to manufacturing and 20% relates to general and administrative costs. 2 The property taxes should be shared: 75% manufacturing & 25% general & administrative costs Required: (A)Calculate the raw material & factory supplies used by Shades of the Caribbean.  (B)What is the total manufacturing overhead cost incurred by Shades of the Caribbean during the period?  (C)Determine the prime cost & conversion cost of the product manufactured.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Part 1
Shades of the Caribbean design and manufacture sun-glasses for the tourism sector. The accounting
records of the business reflect the following data at June 30, 2018:
Inventory        1/7/2017      30/6/2018
Raw Materials $230,000     $260,000
Factory Supplies $35,000    $24,000
Work in Progress $358,000 $213,000
Finished Goods $975,400 $585,000


Other information:
Sales Revenue $5,675,000
Factory Supplies Purchased 64,000
Direct Factory Labor 792,000
Raw Materials Purchased 560,000
Plant janitorial service 37,000
Depreciation: Plant & Equipment 186,000
Total Utilities 1 481,250
Production Supervisor’s Salary 450,000
Hiring of Specialized Manufacturing Equipment 68,000
Insurance on Plant & Equipment 112,000
Delivery Vehicle Drivers’ Wages 189,000
Depreciation: Delivery Vehicle 53,850
Property Taxes 2 240,000
Administrative Wages & Salaries 850,750
Advertising Expenses 1% of Sales Revenue
1 Of the total utilities, 80% relates to manufacturing and 20% relates to general and administrative costs.
2 The property taxes should be shared: 75% manufacturing & 25% general & administrative costs
Required:
(A)Calculate the raw material & factory supplies used by Shades of the Caribbean. 
(B)What is the total manufacturing overhead cost incurred by Shades of the Caribbean during the
period? 
(C)Determine the prime cost & conversion cost of the product manufactured. 

 
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