What was the average cost per unit for direct labour

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Reference no: EM133042281

Problem - The following information pertains to the most recent quarter at Precious Production Limited.

Purchases of raw materials

$385,500

Raw materials inventory, beginning

46,800

Raw materials inventory, ending

76,500

Depreciation, factory

210,500

Insurance, factory

21,700

Direct labour

251,900

Maintenance, factory

126,800

Administrative expenses

293,600

Sales

2,208,000

Utilities, factory

116,500

Supplies, factory

4,170

Selling expenses

335,300

Indirect labour

271,900

Work in process inventory, beginning

28,850

Work in process inventory, ending

123,400

Finished goods inventory, beginning

42,550

Finished goods inventory, ending

170,200

Required -

1. Prepare a schedule of cost of goods manufactured.

2. Prepare an income statement.

3. Assume that the company produced the equivalent of 16,000 units of product during the year. What was the average cost per unit for direct labour? What was the average cost per unit for factory insurance?

4. Assume that the company expects to produce 18,000 units of product during the coming year. What average cost per unit and what total cost would you expect the company to incur for direct materials at this level of activity? For factory insurance? (In preparing your answer, assume that direct materials is a variable cost and that depreciation is a fixed cost; also assume that depreciation is computed on a straight- line basis.)

6. Assuming the company produced 24,000 fully and partially finished units during the year, determine the cost components of the finished goods inventory, which is composed of 4,800 finished units.

Reference no: EM133042281

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