QUESTION 1: Schedule of Cost of Goods Manufactured: Income Statement. Richmond Chocolates Limited, a manufacturing Company, produces a single product. The following information has been taken from the company’s production, sales and cost records for the year ended December 31, 2021. Sales $ 450,000 Indirect Labour 12,000 Utilities 15,000 Direct Labour 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 company follows: Some 60 percent of the utilities costs and 75 percent of the expired insurance apply to factory operations. The remaining amounts apply to selling and administrative activities Only 80 percent of the rent on facilities apply to factory operations: the remainder applies to selling and administrative activities. Inventories: Inventory 1/1/2021 31/12/2021 Raw Materials $ 8,000 $ 13,000 Work in Progress 16,000 21,000 Finished Goods 40,000 60,000 Required: Calculate the prime cost & conversion cost of the chocolates produced. Compute the average production cost per unit during the year. Prepare a schedule of cost of goods manufactured for the year. Prepare an income statement for the year.
QUESTION 1: Schedule of Cost of Goods Manufactured: Income Statement.
Richmond Chocolates Limited, a manufacturing Company, produces a single product. The following information has been taken from the company’s production, sales and cost records for the year ended December 31, 2021.
|
Sales |
$ 450,000 |
|
Indirect Labour |
12,000 |
|
Utilities |
15,000 |
|
Direct Labour |
70,000 |
|
|
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 company follows:
Some 60 percent of the utilities costs and 75 percent of the expired insurance apply to factory operations. The remaining amounts apply to selling and administrative activities
Only 80 percent of the rent on facilities apply to factory operations: the remainder applies to selling and administrative activities.
Inventories:
|
Inventory |
1/1/2021 |
31/12/2021 |
|
Raw Materials |
$ 8,000 |
$ 13,000 |
|
Work in Progress |
16,000 |
21,000 |
|
Finished Goods |
40,000 |
60,000 |
Required:
Calculate the prime cost & conversion cost of the chocolates produced.
Compute the average production cost per unit during the year.
Prepare a schedule of cost of goods manufactured for the year.
Prepare an income statement for the year.
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QUESTION 1: Schedule of Cost of Goods Manufactured: Income Statement.
Richmond Chocolates Limited, a manufacturing Company, produces a single product. The following information has been taken from the
company’s production, sales and cost records for the year ended December 31, 2021.
|
Sales |
$ 450,000 |
|
Indirect Labour |
12,000 |
|
Utilities |
15,000 |
|
Direct Labour |
70,000 |
|
|
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 company follows:
- Some 60 percent of the utilities costs and 75 percent of the expired insurance apply to factory operations. The remaining amounts apply to selling and administrative activities
- Only 80 percent of the rent on facilities apply to factory operations: the remainder applies to selling and administrative
- Inventories:
|
Inventory |
1/1/2021 |
31/12/2021 |
|
Raw Materials |
$ 8,000 |
$ 13,000 |
|
Work in Progress |
16,000 |
21,000 |
|
Finished Goods |
40,000 |
60,000 |
Required:
- Prepare an income statement for the year.
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