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FINANCIAL ACCOUNTING
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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Solve question 3 please

3. Direct labour: $_ Insurance: $ per unit. per unit. + 10,000 units = $. ÷ 10,000 units = $. Direct materials: Unit cost: $: $ Total cost: + 10,000 units = units x $ per unit. per unit = $ Insurance: Unit cost: $ Total cost: $ ÷ 12,000 units = $. per unit. (unchanged) Unit cost for insurance dropped from $_ production between the two years. Since fixed costs do not change in total as the activity level changes, they will decrease on a unit basis as the activity level rises. to $ because of the increase in If the company produced 20,000 units then the following costs would appear in in- ventory: (hint, how many units would be in ending inventory?) Direct materials ($_ Direct labour ($. Manufacturing overhead ($. Total /20,000)*4,000 units /20,000)* 4,000 units _/20,000) * = $_ _units $ II
Transcribed Image Text:3. Direct labour: $_ Insurance: $ per unit. per unit. + 10,000 units = $. ÷ 10,000 units = $. Direct materials: Unit cost: $: $ Total cost: + 10,000 units = units x $ per unit. per unit = $ Insurance: Unit cost: $ Total cost: $ ÷ 12,000 units = $. per unit. (unchanged) Unit cost for insurance dropped from $_ production between the two years. Since fixed costs do not change in total as the activity level changes, they will decrease on a unit basis as the activity level rises. to $ because of the increase in If the company produced 20,000 units then the following costs would appear in in- ventory: (hint, how many units would be in ending inventory?) Direct materials ($_ Direct labour ($. Manufacturing overhead ($. Total /20,000)*4,000 units /20,000)* 4,000 units _/20,000) * = $_ _units $ II
The following information pertains to the most recent quarter at Precious Production Limited. Purchases of raw materials $ 360,000 Raw materials inventory, beginning 40,000 Raw materials inventory, ending 68,000 Depreciation, factory 168,000 Insurance, factory 20,000 Direct labour 240,000 Maintenance, factory 120,000 Administrative expenses 280,000 Sales 1,800,000 Utilities, factory 108,000 Supplies, factory 4,000 Selling expenses 320,000 Indirect labour 260,000 Work in process inventory, beginning 28,000 Work in process inventory, ending 120,000 Finished goods inventory, beginning 40,000 Finished goods inventory, ending 160,000
Transcribed Image Text:The following information pertains to the most recent quarter at Precious Production Limited. Purchases of raw materials $ 360,000 Raw materials inventory, beginning 40,000 Raw materials inventory, ending 68,000 Depreciation, factory 168,000 Insurance, factory 20,000 Direct labour 240,000 Maintenance, factory 120,000 Administrative expenses 280,000 Sales 1,800,000 Utilities, factory 108,000 Supplies, factory 4,000 Selling expenses 320,000 Indirect labour 260,000 Work in process inventory, beginning 28,000 Work in process inventory, ending 120,000 Finished goods inventory, beginning 40,000 Finished goods inventory, ending 160,000
Expert Solution
Step 1

Answer:

 

1. Direct Labour

$240000/10000 units

=$24/unit

2. Insurance

=$20000/10000 units

=$2/unit

3. Direct Materials

Unit Cost= $360000/10000

=$36/unit

Total cost = (68000-40000+10000)*36

=38000*36

$1368000

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