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 Factory Supplies Purchased Direct Factory Labor Raw Materials Purchased Plant janitorial service Depreciation: Plant & Equipment Total Utilities ¹ Production Supervisor's Salary Hiring of Specialized Manufacturing Equipment Insurance on Plant & Equipment Delivery Vehicle Drivers' Wages Depreciation: Delivery Vehicle Property Taxes 2 Administrative Wages & Salaries Advertising Expenses $5,675,000 64,000 792,000 560,000 37,000 186,000 481,250 450,000 68,000 112,000 189,000 53,850 240,000 850,750 1% of Sales Revenue 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

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 Factory Supplies Purchased Direct Factory Labor Raw Materials Purchased Plant janitorial service Depreciation: Plant & Equipment Total Utilities ¹ Production Supervisor's Salary Hiring of Specialized Manufacturing Equipment Insurance on Plant & Equipment Delivery Vehicle Drivers' Wages Depreciation: Delivery Vehicle Property Taxes 2 Administrative Wages & Salaries Advertising Expenses $5,675,000 64,000 792,000 560,000 37,000 186,000 481,250 450,000 68,000 112,000 189,000 53,850 240,000 850,750 1% of Sales Revenue 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

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
Factory Supplies Purchased
Direct Factory Labor
Raw Materials Purchased
Plant janitorial service
Depreciation: Plant & Equipment
Total Utilities ¹
Production Supervisor's Salary
Hiring of Specialized Manufacturing Equipment
Insurance on Plant & Equipment
Delivery Vehicle Drivers' Wages
Depreciation: Delivery Vehicle
Property Taxes ²
Administrative Wages & Salaries
Advertising Expenses
$5,675,000
64,000
792,000
560,000
37,000
186,000
481,250
450,000
68,000
112,000
189,000
53,850
240,000
850,750
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

(D) Prepare a schedule of cost of goods manufactured for the year ended June 30, 2018, clearly
showing total manufacturing costs & total manufacturing costs to account for.
(E) Prepare an income statement for the year ended June 30, 2018, clearly showing the calculation of
Cost of Goods sold. List the non-production overheads in order of size starting with the largest.
(F) Given that the company manufactured 1,600 sun-glasses, compute the company's unit product cost
for the year.

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