Technology Accessories Inc. is a designer, manufacturer, and distributor of accessories for consumer electronic products. Early in 20Y3, the company began production of a leather cover for tablet computers, called the iLeather. The cover is made of stitched leather with a velvet interior and fits around most tablet computers. In January, $750,000 was spent on developing marketing and advertising materials. For the first six months of 2012, the company spent $1,400,000 promoting the iLeather. The product was ready for manufacture on January 21, 20Y3. Technology Accessories Inc. uses a job order cost system to accumulate costs for the iLeather. Direct materials unit costs for the iLeather are as follows: Leather Velvet Packaging Total $10.00 5.00 0.40 $15.40 Excel The actual production process for the iLeather is fairly straightforward. First, leather is brought to a cutting and stitching machine. The machine cuts the leather and stitches an exterior edge into the product. The machine requires one hour per 125 iLeathers. After the iLeather is cut and stitched, it is brought to assembly, where assembly personnel affix the velvet interior and pack the iLeather for shipping. The direct labor cost for this work is $0.50 per unit. The completed packages are then sold to retail outlets through a sales force. The sales force is compensated by a 20% commission on the wholesale price for all sales. Total completed production was 500,000 units during the year. Other information is as follows: Number of iLeather units sold in 2013 Wholesale price per unit 460,000 $40 Factory overhead cost is applied to jobs at the rate of $1,250 per machine hour. An additional 22,000 cut and stitched iLeathers were waiting to be assembled on December 31, 20Y3.
Technology Accessories Inc. is a designer, manufacturer, and distributor of accessories for consumer electronic products. Early in 20Y3, the company began production of a leather cover for tablet computers, called the iLeather. The cover is made of stitched leather with a velvet interior and fits around most tablet computers. In January, $750,000 was spent on developing marketing and advertising materials. For the first six months of 2012, the company spent $1,400,000 promoting the iLeather. The product was ready for manufacture on January 21, 20Y3. Technology Accessories Inc. uses a job order cost system to accumulate costs for the iLeather. Direct materials unit costs for the iLeather are as follows: Leather Velvet Packaging Total $10.00 5.00 0.40 $15.40 Excel The actual production process for the iLeather is fairly straightforward. First, leather is brought to a cutting and stitching machine. The machine cuts the leather and stitches an exterior edge into the product. The machine requires one hour per 125 iLeathers. After the iLeather is cut and stitched, it is brought to assembly, where assembly personnel affix the velvet interior and pack the iLeather for shipping. The direct labor cost for this work is $0.50 per unit. The completed packages are then sold to retail outlets through a sales force. The sales force is compensated by a 20% commission on the wholesale price for all sales. Total completed production was 500,000 units during the year. Other information is as follows: Number of iLeather units sold in 2013 Wholesale price per unit 460,000 $40 Factory overhead cost is applied to jobs at the rate of $1,250 per machine hour. An additional 22,000 cut and stitched iLeathers were waiting to be assembled on December 31, 20Y3.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
PR 19 5B
Transcribed Image Text:1.
2.
Sales
Gross profit
Selling expenses:
Total ling expenses
Income from operations
TECHNOLOGY ACCESSORIES INC.
Income Statement
For the Year Ended December 31, 20Y3
Cost of goods sold supporting calculation:
Manufacturing cost per unit:
Direct materials:
Leather
Velvet (for interior)
Packaging
Total direct materials
Direct labor
Factory overhead
Total manufacturing cost per unit
x Number of units sold
Cost of goods sold
Finished goods inventory balance, December 31, 20Y3:
Units produced
Less: Units sold
Units remaining in inventory
x Manufacturing cost per unit
Balance
Work in process inventory balance, December 31, 20Y3:
Additional units waiting for assembly
x Direct materials and overhead per unit
Balance
III
Transcribed Image Text:Technology Accessories Inc. is a designer, manufacturer, and distributor of
accessories for consumer electronic products. Early in 2013, the company began
production of a leather cover for tablet computers, called the iLeather. The cover
is made of stitched leather with a velvet interior and fits around most tablet computers. In
January, $750,000 was spent on developing marketing and advertising materials. For the first
six months of 20Y2, the company spent $1,400,000 promoting the iLeather. The product was
ready for manufacture on January 21, 20Y3.
Technology Accessories Inc. uses a job order cost system to accumulate costs for the iLeather.
Direct materials unit costs for the iLeather are as follows:
Leather
Velvet
Packaging
Total
$10.00
5.00
0.40
$15.40
Excel
The actual production process for the iLeather is fairly straightforward. First, leather is
brought to a cutting and stitching machine. The machine cuts the leather and stitches an
exterior edge into the product. The machine requires one hour per 125 iLeathers.
After the iLeather is cut and stitched, it is brought to assembly, where assembly personnel
affix the velvet interior and pack the iLeather for shipping. The direct labor cost for this work
is $0.50 per unit.
The completed packages are then sold to retail outlets through a sales force. The sales force is
compensated by a 20% commission on the wholesale price for all sales.
Total completed production was 500,000 units during the year. Other information is as
follows:
Number of iLeather units sold in 2013
Wholesale price per unit
460,000
$40
Factory overhead cost is applied to jobs at the rate of $1,250 per machine hour. An additional
22,000 cut and stitched iLeathers were waiting to be assembled on December 31, 20Y3.
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