Prestige Manufacturing reports the following information for the current year, which is its first year of operations: Item Direct materials Direct labor Variable overhead Fixed overhead Units produced this year Units sold this year Amount $22 per unit $18 per unit $4 per unit $120,000 per year 24,000 units 15,000 units Ending finished goods inventory 9,000 units Requirements: 1. Compute the product cost per unit using absorption costing. 2. Determine the cost of ending finished goods inventory using absorption costing. 3. Determine the cost of goods sold using absorption costing.

Prestige Manufacturing reports the following information for the current year, which is its first year of operations: Item Direct materials Direct labor Variable overhead Fixed overhead Units produced this year Units sold this year Amount $22 per unit $18 per unit $4 per unit $120,000 per year 24,000 units 15,000 units Ending finished goods inventory 9,000 units Requirements: 1. Compute the product cost per unit using absorption costing. 2. Determine the cost of ending finished goods inventory using absorption costing. 3. Determine the cost of goods sold using absorption costing.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 39E: Cost Classification Loring Company incurred the following costs last year: Required: 1. Classify...

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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
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