Problem: The given information is taken for the accounts of the Apex Manufacturing Company:
Account Balances:
1/1/07 12/31/07
Matierial $20,000 $10,000
Supplies (manufacturing indirect materials) $5,000 $6,000
Work-in-process $50,000 $80,000
Finished Goods $80,000 $100,000
Accounts Payable(only suppliers of direct materials)$30,000 $20,000
Wages Payable, to production employees $25,000 $15,000
Plant and Equipment $500,000 $600,000
Accumulated Depreciation - Plant and Equip. $70,000 $120,000
Additional information on cash disbursements for 2007
To suppliers of raw materials (A/P) $110,000
For manufacturing supplies (indirect materials) $10,000
To production employees $250,000
To purchase new equipment $100,000
Salesmen's commission $75,000
Repairs and maintenance of plant and equipment $5,000
rent for administrative and sales offices $10,000
property taxes on plant $4,000
Utilites:
Plant $20,000
Office $2,000
Required: (Hint: you can use T-accounts to calculate unknowns and then prepare the cost of goods manufactured statement in good form.)
Problem 1. Calculate cost of direct materials used, cost of indirect materials used and overhead costs incurred for 207.
Problem 2. Based on the information calculated in part 1, prepare a cost of goods manufactured statement for 2007.
Problem 3. Calculate prime cost, conversion costs and period costs.