Wolfort Blade Limited, a manufacturing company, produces a single product. The followiing information has been taken from the company's production, sales and cost records for the year ended December 31, 2020. Sales $450,000 Indirect Labor $12,000 Utilities $15,000 Direct Labor $70,000 Depreciation: factory equipment $21,000 Raw Materials Purchased $165,000 Depreciation: sales equipment $18,000 Insurance expired during the year $4,000 Rent on facilities $50,000 Selling and administrative salaries $32,000 Advertising $75,000 Additional information about the Dragan Salt Limited is as follows: a. Some 60% of the utilities costs and 75% of the expired insurance apply to factory operations. The remaining amounts apply to selling and administrative activities. b. Only 80% of the rent on facilities apply to factory operations; the remainder applies to selling and administrative activities. c. Inventories Inventories 1/1/2020 31/12/2020 Raw Materials $8,000 $13,000 Work in Progress $16,000 $21,000 Finished Goods $40,000 $60,000 Answer the following questions listed below:- 1. Calculate the prime cost and conversion cost of the blades produced 2. Compure the average production cost per unit during the year 2. Prepare a schedule of cost of goods manufactured for the year 3. Prepare an income statement for the year.

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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Wolfort Blade Limited, a manufacturing company, produces a single product. The followiing information has been taken from the company's production, sales and cost records for the year ended December 31, 2020.

Sales	$450,000
Indirect Labor	$12,000
Utilities	$15,000
Direct Labor	$70,000
Depreciation: factory equipment	$21,000
Raw Materials Purchased	$165,000
Depreciation: sales equipment	$18,000
Insurance expired during the year	$4,000
Rent on facilities	$50,000
Selling and administrative salaries	$32,000
Advertising	$75,000

Additional information about the Dragan Salt Limited is as follows:

a. Some 60% of the utilities costs and 75% of the expired insurance apply to factory operations. The remaining amounts apply to selling and administrative activities.

b. Only 80% of the rent on facilities apply to factory operations; the remainder applies to selling and administrative activities.

c. Inventories

Inventories	1/1/2020	31/12/2020
Raw Materials	$8,000	$13,000
Work in Progress	$16,000	$21,000
Finished Goods	$40,000	$60,000

Answer the following questions listed below:-

1. Calculate the prime cost and conversion cost of the blades produced

2. Compure the average production cost per unit during the year

2. Prepare a schedule of cost of goods manufactured for the year

3. Prepare an income statement for the year.

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