Answered: The Wizz Electronics sells a variety of…

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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Transcribed Image Text:Part 2 The Wizz Electronics sells a variety of electronic devices including a variety of WIFI SMART camera bulbs. The business began the second quarter (April to June) of 2022 with 15 (V380PRO) camera bulbs at a total cost of $108,750. The following transactions relating to the "V380PRO" camera bulbs were completed during the quarter. April 7 April 30 May 6 May 9 May 31 June 5 June 14 June 30 June 30 (B) (C) 90 bulbs were purchased at a cost of $6,850 each. In addition, the business paid freight charges of $800 cash on each bulb to have the inventory shipped from the point of purchase to their warehouse. An actual count of inventory was carried out at the close of business which revealed that there were 36 units of the V380PRO brand of merchandise in the store room. Unless otherwise stated, assume that all purchases were on account and received on the dates stated. Required: (A) (D) The sales for April were 75 bulbs which yielded total sales revenue of $803,250. (15 of these bulbs were sold on account to two longstanding customers of the business) A new batch of 80 bulbs was purchased at a total cost of $654,800 Upon inspection of the inventory purchased on May 6, five (5) of the bulbs were found to be defective and were returned to the supplier. During the month 62 of the camera bulbs were sold at a price of $11,450 each. A customer, to whom 7 of the bulbs were sold during the first business day of May, returned 3 units of the merchandise, as they were of another make & model. Owing to an increased demand, a further 110 bulbs were purchased at a cost of $9,000 each; the supplier gave a 3% quantity discount on the purchase. 116 bulbs were sold during June at a unit selling price of $12,250. Prepare a perpetual inventory record for this merchandise, using the first in, first out (FIFO) method of inventory valuation to determine the company's cost of goods sold for the quarter and the value of ending. Given that selling, distribution and administrative costs associated with the V380PRO brand of WIFI SMART camera bulbs for the quarter were $27,255, $42,400, and $140,600 respectively, prepare an income statement for The Wizz (V380PRO) for the quarter ended June 30, 2022. Journalize the transactions for the month of April, assuming the company uses a: Periodic inventory system Perpetual inventory system Buckley Enterprise sells a product that cost $450 per unit and has a monthly demand of 5,000 units. The annual holding cost per unit is calculated as 5% of the unit purchase price. It costs the business $75 to place a single order. Currently the business places 12 orders each year. i) What is the total stock administrative cost of Buckley's current inventory policy? ii) Is this the entity's cost minimizing solution for this product each year? Explain.

Part 1
Canine Nutritionists is a manufacturer of grains for dogs. The following information pertains to operations during
the 2021 calendar year.
Inventory Data:
Raw Materials
Indirect Materials
Work in Progress
Finished Goods
1/1/2021 Purchases 31/12/2021
$750,000 $4,330,000
320,000
55,000
924,000
1,142,600
The following additional information is also available:
Sales Revenue
Direct Factory Labor
Indirect Factory Labor
Total Depreciation 1
Total Utilities 2
Distribution & Customer Service Costs
Insurance on Plant & Equipment
Property Taxes 3
Administrative Wages & Salaries
Advertising Expenses
Sales Commission
n/a
n/a
$807,000
71,500
814,750
1,720,200
$14,776,000
4,371,000
1,232,250
400,000
525,000
76,800
585,000
90,000
1,076,000
57,700
5% of Sales Revenue
1 Of the total depreciation, 80% relates to factory plant & equipment and 20% relates to general and
administrative costs.
2 Of the total utilities, 75% relates to manufacturing and 25% relates to general and administrative costs.
3 The property taxes should be shared: 85% manufacturing & 15% general & administrative costs.
Required:
a) Calculate the raw material used by Canine Nutritionists.
b) Calculate the indirect materials used by Canine Nutritionists
c) What is the total manufacturing overhead cost incurred by Canine Nutritionists during the period?
d) Determine the prime cost & conversion cost of the product manufactured.
e) Prepare a schedule of cost of goods manufactured for the year ended December 31, 2021, clearly
showing total manufacturing cost & total manufacturing costs to account for.
f) What is the unit product cost if Canine Nutritionists manufactured 18,500 bags of grains for the year?
g) How does the format of the income statement for a manufacturing concern differ from the income
statement of a merchandising business?

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