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 Indirect Factory Labor Total Depreciation ! 3,952,600 1,232,250 400,000 Total Utilities 2 525,000 Distribution & Customer Service Costs 76,800 Insurance on Plant & Equipment Property Taxes 3 Administrative Wages & Salaries 585,000 90,000 1,076,000 Advertising Expenses 57,700 6% of Sales Revenue Sales Commission 1Of the total depreciation, 80% relates to facto:y plant & equipment and 20% relates to general and administrative costs. 2 Of the total utilities, 75% relates to production and 25% relates to general and administrative costs. 3 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 n/a n/a 924,000 1,115,400 1,142,600 Finished Goods 1,720,200 Required: e) 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. f) 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. g) What is the factory cost per case if Pro-Leather manufactured 19,20o cases for tablets for the year?
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 Indirect Factory Labor Total Depreciation ! 3,952,600 1,232,250 400,000 Total Utilities 2 525,000 Distribution & Customer Service Costs 76,800 Insurance on Plant & Equipment Property Taxes 3 Administrative Wages & Salaries 585,000 90,000 1,076,000 Advertising Expenses 57,700 6% of Sales Revenue Sales Commission 1Of the total depreciation, 80% relates to facto:y plant & equipment and 20% relates to general and administrative costs. 2 Of the total utilities, 75% relates to production and 25% relates to general and administrative costs. 3 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 n/a n/a 924,000 1,115,400 1,142,600 Finished Goods 1,720,200 Required: e) 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. f) 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. g) What is the factory cost per case if Pro-Leather manufactured 19,20o cases for tablets for the year?
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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Transcribed Image Text: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
Indirect Factory Labor
Total Depreciation 1
3,952,600
1,232,250
400,000
Total Utilities 2
525,000
Distribution & Customer Service Costs
76,800
Insurance on Plant & Equipment
585,000
Property Taxes 3
Administrative Wages & Salaries
Advertising Expenses
90,000
1,076,000
57,700
Sales Commission
6% of Sales Revenue
1Of the total depreciation, 80% relates to facto:y plant & equipment and 20% relates to general and
administrative costs.
2 Of the total utilities, 75% relates to production and 25% relates to general and administrative
costs.
3 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
$750,000 $4,330,000
Raw Materials
$807,000
Indirect Materials
55,000
320,000
71,500
Work in Progress
n/a
n/a
1,115,400
924,000
Finished Goods
1,142,600
1,720,200
Required:
e) 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.
f) 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.
g) What is the factory cost per case if Pro-Leather manufactured 19,200o cases for tablets for the year?
h) How does the format of the income statement for a manufacturing concern differ from the income
statement of a merchandising entity?
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