ro-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 Labour $3,952,600 Indirect Factory Labour $1,232,250 Total depreciation 1 400,000 Total Utilities 525,000 Distribution and customer service costs 76,800 Insurance on plant and equipment 585,000 Property taxes 3 90,000 Administrative Wages and Salaries 1,076,000 Advertising Expenses 57,700 Sales commission 6% of sales Revenue Of the total depreciation, 80% relates to factory 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. The property taxes should be shared: 85% production & 15% general & administrative costs The following additional information is also available: Inventory Date: 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: a) Calculate the raw material used by Pro-Leather Company. b) Calculate the indirect materials used by Pro-Leather Company c) What is the total manufacturing overhead cost incurred by Pro-Leather Company during the period? d) Determine the prime cost & conversion cost of the cases manufactured. 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 19,200 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?

ro-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 Labour $3,952,600 Indirect Factory Labour $1,232,250 Total depreciation 1 400,000 Total Utilities 525,000 Distribution and customer service costs 76,800 Insurance on plant and equipment 585,000 Property taxes 3 90,000 Administrative Wages and Salaries 1,076,000 Advertising Expenses 57,700 Sales commission 6% of sales Revenue Of the total depreciation, 80% relates to factory 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. The property taxes should be shared: 85% production & 15% general & administrative costs The following additional information is also available: Inventory Date: 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: a) Calculate the raw material used by Pro-Leather Company. b) Calculate the indirect materials used by Pro-Leather Company c) What is the total manufacturing overhead cost incurred by Pro-Leather Company during the period? d) Determine the prime cost & conversion cost of the cases manufactured. 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 19,200 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?

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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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 Labour	$3,952,600
Indirect Factory Labour	$1,232,250
Total depreciation 1	400,000
Total Utilities	525,000
Distribution and customer service costs	76,800
Insurance on plant and equipment	585,000
Property taxes 3	90,000
Administrative Wages and Salaries	1,076,000
Advertising Expenses	57,700
Sales commission	6% of sales Revenue

Of the total depreciation, 80% relates to factory 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.
The property taxes should be shared: 85% production & 15% general & administrative costs

The following additional information is also available:

Inventory Date:	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:

a) Calculate the raw material used by Pro-Leather Company.
b) Calculate the indirect materials used by Pro-Leather Company
c) What is the total manufacturing overhead cost incurred by Pro-Leather Company during the period?
d) Determine the prime cost & conversion cost of the cases manufactured.
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 19,200 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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