Reference no: EM132478757

Selected account balances for the year ended 31 December are provided below for Superior Company:

Selling and administrative salaries      110,000

Insurance, factory                8,000

Utilities, factory                   45,000

Purchases of raw materials          290,000

Indirect labour                     60,000

Direct labour                          ?

Advertising expense               80,000

Cleaning supplies, factory          7,000

Sales commissions                50,000

Rent, factory building           120,000

Maintenance, factory               30,000

Stock balances at the beginning and end of the year were as follows:

                               Beginning of the year                 End of the year

Raw materials                            40,000                               10,000

Work in progress                       ?                                    35,000

Finished goods                       50,000                                      ?

The total manufacturing costs for the year were E683,000; the goods available for sale totalled 6740,000; and the cost of goods sold totalled E660,000.

Question 1. What's the schedule of cost of goods manufactured in good form and the cost of goods sold section of the company's profit and loss account for the year

Question 2. Assume that the pound amounts given above are for the equivalent of 40,000 units produced during the year. Compute the units cost for direct materials used and the unit cost for rent on the factory building.

Question 3. Assume that in the following year the company expects to produce 50,000 units. What per unit and total cost would you expect to be incurred for direct materials? For rent on the factory building?(assueme that direct materials is a variable cost and that rent is a fixed cost.)

Question 4. As the manager in charge of production costs, if any difference to the managing director in unit costs between Question 2 and Question 3 above, why.