The scenario with details is attached (please show calculations):1. Calculate the raw material & factory supplies used by Shades of the Caribbean 2. What is the total manufacturing overhead cost incurred by Shades of the Caribbean during theperiod?3. )Determine the prime cost & conversion cost of the product manufactured. Part 1Shades of the Caribbean design and manufacture sun-glasses for the tourism sector. The accountingrecords of the business reflect the following data at June 30, 2018:Inventory1/7/2017 30/6/2018Raw Materials $230,000 $260,000Factory Supplies$35,000 $24,000Work in Progress $358,000 $213,000Finished Goods $975,400 $585,000Other information:Sales RevenueFactory Supplies PurchasedDirect Factory LaborRaw Materials PurchasedPlant janitorial serviceDepreciation: Plant & EquipmentTotal Utilities 1Production Supervisor's SalaryHiring of Specialized Manufacturing EquipmentInsurance on Plant & EquipmentDelivery Vehicle Drivers' WagesDepreciation: Delivery VehicleProperty Taxes ²Administrative Wages & SalariesAdvertising Expenses$5,675,00064,000792,000560,00037,000186,000481,250450,00068,000112,000189,00053,850240,000850,7501% of Sales Revenue1 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

Answered: The scenario with details is attached…

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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The scenario with details is attached (please show calculations): 1. Calculate the raw material & factory supplies used by Shades of the Caribbean 2. What is the total manufacturing overhead cost incurred by Shades of the Caribbean during the period? 3. )Determine the prime cost & conversion cost of the product manufactured.

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
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

Expert Solution

Step 1 Introduction

The costs incurred can be classified as direct cost and indirect costs. The prime cost comprises of all direct costs such as direct materials and direct labor. The conversion cost is calculated as sum of direct labor and manufacturing overhead cost.

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