COST ASSIGNMENT METHODS
Brody Company makes industrial cleaning solvents. Various chemicals, detergent, and water are mixed together and then bottled in 40-litre drums. Brody provided the following information for last year:
|
Raw materials purchases
|
$250,000
|
|
Direct labor
|
140,000
|
|
Depreciation on factory equipment
|
45,000
|
|
Depreciation on factory building
|
30,000
|
|
Depreciation on headquarters building
|
50,000
|
|
Factory insurance
|
15,000
|
|
Property taxes:
|
|
Factory
|
20,000
|
|
Headquarters
|
18,000
|
|
Utilities for factory
|
34,000
|
|
Utilities for sales office
|
1,800
|
|
Administrative salaries
|
150,000
|
|
Indirect labour salaries
|
156,000
|
|
Sales office salaries
|
90,000
|
|
Beginning balance, Raw Materials
|
124,000
|
|
Beginning balance, Work in Process
|
124,000
|
|
Beginning balance, Finished Goods
|
84,000
|
|
Ending balance, Raw Materials
|
102,000
|
|
Ending balance, Work in Process
|
130,000
|
|
Ending balance, Finished Goods
|
82,000
|
Last year, Brody completed 100,000 units. Sales revenue equalled $1,200,000, and Brody paid a sales commission of 5 percent of sales.
Required:
1. Calculate the direct materials used in production for last year.
2. Calculate total prime cost.
3. Calculate total conversion cost.
4. Prepare a cost of goods manufactured statement for last year. Calculate the unit product cost.
5. Prepare a cost of goods sold statement for last year.
6. Prepare an income statement for last year. Show the percentage of sales that each line item represents.