Reference no: EM13901172
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:
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Raw materials purchases
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$250,000
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Direct labor
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140,000
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Depreciation on factory equipment
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45,000
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Depreciation on factory building
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30,000
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Depreciation on headquarters building
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50,000
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Factory insurance
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15,000
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Property taxes:
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Factory
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20,000
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Headquarters
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18,000
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Utilities for factory
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34,000
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Utilities for sales office
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1,800
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Administrative salaries
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150,000
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Indirect labour salaries
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156,000
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Sales office salaries
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90,000
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Beginning balance, Raw Materials
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124,000
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Beginning balance, Work in Process
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124,000
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Beginning balance, Finished Goods
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84,000
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Ending balance, Raw Materials
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102,000
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Ending balance, Work in Process
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130,000
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Ending balance, Finished Goods
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82,000
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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.
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