Pro-Leather Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2020 calendar year. Sales Revenue $14,275,000 Direct Factory Labor 3,952,600 Indirect Factory Labor 1,232,250 Total Depreciation 1 400,000 Total Utilities 2 525,000 Distribution & Customer Service Costs 76,800 Insurance on Plant & Equipment 585,000 Property Taxes 3 90,000 Administrative Wages & Salaries 1,076,000 Advertising Expenses 57,700 Sales Commission 6% of Sales Revenue a) Of the total depreciation, 80% relates to factory plant & equipment and 20% relates to general and administrative costs. b) Of the total utilities, 75% relates to production and 25% relates to general and administrative costs. c) The property taxes should be shared: 85% production & 15% general & administrative costs. The following additional information is also available: Inventory Data: 1/1/2020 Purchases 31/12/2020 Raw Materials $750,000 $4,330,000 $807,000 Indirect Materials 55,000 320,000 71,500 Work in Progress 1,115,400 n/a 924,000 Finished Goods 1,142,600 n/a 1,720,200 Required: Determine the prime cost & conversion cost of the cases manufactured. Prepare a schedule of cost of goods manufactured for the year ended December 31, 2020, clearly showing total manufacturing cost & total manufacturing costs to account for. Prepare an income statement for Pro-Leather Company for the year ended December 31, 2020. List the non-manufacturing overheads in order of size starting with the largest.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 29E: Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima....

See similar textbooks

Related questions

Concept explainers

Question

Pro-Leather Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2020 calendar year.

Sales Revenue	$14,275,000
Direct Factory Labor	3,952,600
Indirect Factory Labor	1,232,250
Total Depreciation 1	400,000
Total Utilities 2	525,000
Distribution & Customer Service Costs	76,800
Insurance on Plant & Equipment	585,000
Property Taxes 3	90,000
Administrative Wages & Salaries	1,076,000
Advertising Expenses	57,700
Sales Commission	6% of Sales Revenue

a) Of the total depreciation, 80% relates to factory plant & equipment and 20% relates to general and administrative costs.

b) Of the total utilities, 75% relates to production and 25% relates to general and administrative costs.

c) The property taxes should be shared: 85% production & 15% general & administrative costs.

The following additional information is also available:

Inventory Data:	1/1/2020	Purchases	31/12/2020
Raw Materials	$750,000	$4,330,000	$807,000
Indirect Materials	55,000	320,000	71,500
Work in Progress	1,115,400	n/a	924,000
Finished Goods	1,142,600	n/a	1,720,200

Required:

Determine the prime cost & conversion cost of the cases manufactured.
Prepare a schedule of cost of goods manufactured for the year ended December 31, 2020, clearly showing total manufacturing cost & total manufacturing costs to account for.
Prepare an income statement for Pro-Leather Company for the year ended December 31, 2020. List the non-manufacturing overheads in order of size starting with the largest.

Expert Solution

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.