Question 1 The following information relates to Dolltime, a toy manufacturer. Direct materials used in production $2,200,000 Advertising expense $110,000 Depreciation of factory building $105,000 Direct labour wages $490,000 Finished goods inventory at year end $120,000 Indirect labour wages $135,000 Production supervisor salary $50,000 Other manufacturing overhead $105,000 Overtime premiums paid $55,000 Idle time production employees $45,000 Administration costs $100,000 Office rent for sales staff $15,000 Sales commission $5,000 Product promotion costs $12,000
Required: Calculate each of the following costs for the year: a) Total prime cost b) Total manufacturing overhead c) Total conversion cost Management Accounting BAP22A Tutorial Assignments Semester 1, 2014 d) Total product cost e) Total period cost Note: Dont forget to use the finished goods inventory at year end in your calculation (assume no finished goods at the start of the year)
Question 2
Francescas Fine Furniture incurred the following costs for the year ended 30 June, 2013:-
Direct Material $178,000 Direct Labour $336,000 Manufacturing Overhead $175,000
Products with a total costs of $121,000 were finished, and products costing $132,000 were sold on credit for $196,000. There were no purchases of raw materials during the year. The balances in the firms inventory accounts at the start of the year were as follows:- Raw materials $228,000 Work in process $19,000 Finished goods $32,000
Required:- a) Prepare a summary of inventory and manufacturing accounts to show the Cost of Goods Manufactured and Cost of Goods Sold (hint: consider starting and ending balances and the journal entries/movement in the accounts during the year) b) Prepare an income statement and partial balance sheet (showing inventory and receivables accounts) for the year to 30 June 2013