Problem:
Computer Company, a manufacturer of computers systems, started production in August 2010. This company has completed everything in production, so there is no ending work in process. The company produced 500 computer systems and had no unfinished goods (WIP). They sold 475 computer systems.
Questions Based on the below information: Classify whether the cost item is
1) Direct Materials, Direct Labor, Manufacturing overhead
2) Prime Cost, Conversion Costs, Selling and Administrative Expense
3) Calculate the Cost of Goods Manufactured (COGM), Cost of Goods Sold (COGS) and Income Statement (IS)
Direct Material
Begin Inventory - $0
Material Purchased - $ 70,280
Ending Inventory - $280
Work in Process (WIP)
Begin WIP - $0
Ending WIP - $0
Finished Goods (FG)
Begin FG - $0
Calculate ending FG on COGM after computing cost of one unit
Units Produced 500
Units sold 475
Sales price $500
Income Tax rate 32%
Computer company, a manufacturer of computer systems, started production in August 2010
Utility cost on the factory is $600 per month.
Utility cost on the administrative building is $150 per month.
Raw material cost for a computer total $140 per computer system.
The company purchased enough materials to produce 502 computer systems.
Workers on the production lines are paid an average rate of $20 per hour. A computer system usually takes 4 hours to complete.
In addition, the rent of the equipment used to produce computer systems amounts to $6,000 per month.
Indirect materials cost $5 per computer that are produced.
Production supervisor's salary for the month is $8,000.
Advertising costs for the computer systems will be $2,500 per month.
Administrative supplies used are $100 per month.
The factory building depreciation expense is $500 per month.
Property taxes on the factory building is $400 a month.
The company is leasing a building that houses a small administrative staff for $2,500 a month.
The administrative staff earns $3,500 a month.