Reference no: EM132562045

Suppose you are working as trainee after BBA and your management given the following data pertain to Maize Products Company:

Sales Revenue                                           1,000,000

Direct materials inventory, Jan 1, 2019              20,000

Direct labor-Wages                                       350,000

Depreciation expense-Plant and equipment          80,000

Indirect labor-Wages                                        5,000

Heat, Light, and power - Plant                          12,000

Supervisor's salary-Plant                                 40,000

Finished goods inventory, Jan 1, 2019               35,000

Work in Process inventory, Dec, 31, 2019            25,000

Supplies-Administrative office                             6,000

Property taxes-Plant                                      13,000

Finished goods inventory, Dec 31, 2019            40,000

Direct materials inventory, Dec 31, 2019            30,000

Sales representative's salaries                        190,000

Work in Process inventory, Jan, 1, 2019             35,000

Direct materials purchases                             100,000

Supplies-Plant                                                4,000

Depreciation-Administrative office                      30,000

Required

Question a) As trainee Prepare Direct Material used, FOH, Prime Cost and Conversion cost.

Question b) Explain Why Management prepares above mentioned costs and how which cost terms always favor to management decision to decrease product cost?

Question c) Prepare a statement of cost of goods manufactured and an income statement for Maize Products Company for the year ended December 31, 2019.