Bubba Manufacturing Company provided the following information for the fiscal year to June 30, 2020: Inventories 01/07/2019 30/06/2020 Direct Materials $72,000 $65,000 Work-in-Process $107,000 $128,000 Finished Goods $149,500 $141,700 Other Information: Office cleaner’s wages 4,500 Sales Revenue 1,031,000 Raw materials purchased 235,000 Factory wages 239,700 Indirect materials 23,500 Delivery truck driver’s wages 15,400 Indirect labor 9,500 Depreciation on factory plant & equipment 32,000 Insurance 1 60,000 Depreciation on delivery truck 7,250 Utilities 2 118,750 Administrative salaries 41,250 Special Design Costs 5,000 Selling expenses 9,000 Sales Commission 2% of gross profit Of the total insurance, 66⅔% relates to the factory facilities & 33⅓% relates to general & administrative costs. Of the total utilities, 80% relates to the manufacturing facilities & 20% relates to the office area. Requirements: a) What was the amount of direct materials used in production? b) What was the amount of manufacturing overhead costs? c) What is the prime cost and conversion cost of the product? d) Prepare a schedule of cost of goods manufactured for the year ended June 30, 2020, clearly showing total manufacturing costs & total manufacturing costs to account for.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Bubba Manufacturing Company provided the following information for the fiscal year to June 30, 2020:

Inventories 01/07/2019 30/06/2020

Direct Materials $72,000 $65,000

Work-in-Process $107,000 $128,000

Finished Goods $149,500 $141,700

Other Information:

Office cleaner’s wages	4,500
Sales Revenue	1,031,000
Raw materials purchased	235,000
Factory wages	239,700
Indirect materials	23,500
Delivery truck driver’s wages	15,400
Indirect labor	9,500
Depreciation on factory plant & equipment	32,000
Insurance	1 60,000
Depreciation on delivery truck	7,250
Utilities	2 118,750
Administrative salaries	41,250
Special Design Costs	5,000
Selling expenses	9,000
Sales Commission	2% of gross profit

Of the total insurance, 66⅔% relates to the factory facilities & 33⅓% relates to general & administrative costs.
Of the total utilities, 80% relates to the manufacturing facilities & 20% relates to the office area.

Requirements:

a) What was the amount of direct materials used in production?
b) What was the amount of manufacturing overhead costs?
c) What is the prime cost and conversion cost of the product?
d) Prepare a schedule of cost of goods manufactured for the year ended June 30, 2020,

clearly showing total manufacturing costs & total manufacturing costs to account for.

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