Reference no: EM132736869
Problem - PELLE, SA is a company dedicated to the manufacturing and sales of leather shoes and bags. The data corresponding to the costs of the last financial year are as follows. There were no stocks of work in process or finished goods at the beginning, and all production started was finished during the same period.
|
Cost item
|
Amount (€)
|
|
Leather used for making bags
|
85.917
|
|
Thread, used for both products
|
8.000
|
|
Consumption of office supplies
|
10.000
|
|
Soles used for making shoes
|
76.000
|
|
Cost of personnel for manufacturing of bags (fixed salaries)
|
154.083
|
|
Electricity consumption for the operation of machines
|
20.000
|
|
Other supplies for offices
|
70.000
|
|
Cost of advertising the products
|
80.000
|
|
Cost of personnel for manufacturing of shoes (fixed salaries)
|
144.400
|
|
Office rent
|
70.000
|
|
Wages of materials warehouse staff (fixed wages)
|
122.068
|
|
Depreciation of the machines for cutting leather
|
33.000
|
|
Leather used for making shoes
|
65.008
|
|
Maintenance of the company's website
|
20.000
|
|
Depreciation of the machines for making shoes
|
10.000
|
|
Salaries of sales representatives
|
125.000
|
|
Cost of transporting final products to customers
|
50.000
|
|
Municipal taxes (IBI)
|
9.000
|
|
Fire insurance
|
2.800
|
|
Cost of external repairs and maintenance of all machinery
|
34.500
|
|
Salaries of administrative staff (fixed salaries)
|
185.000
|
|
Cost of banking services
|
50.000
|
REQUIRED -
1 Classify the costs above according to whether they are related to production, marketing, & sales, or administration & general activities.
2. Regarding the production costs, also indicate whether they are for capacity or flexible resources, and whether they are direct or indirect in relation to the shoes and bags manufactured.
3. Determine the full production cost per unit of each type of product, knowing that the production of bags has been 12.000 units and that of shoes of 29.600 pairs. Indirect production costs are allocated based on the total number of units of product manufactured.
4. Prepare an income statement, assuming that the sale price of the bags is £50 and the price of a pair of shoes €30, and that all production has been sold.
5. How much would the profit or loss be if, producing the same quantity of units as before, sales were only 10.000 bags and 28.000 pairs of shoes? What would be the value of the remaining stocks of finished products?
6. If the normal production capacity is 14.120 bags and 32.200 pairs of shoes, what is the cost of the unused capacity? Which are the affected resources? What is the full cost per unit of the products, and how much is the profit / loss? How much is the value be of the final stock of finished products?