Question

A&E Electronics design and manufacturer specialized switches for the telecommunications industry. The accounting records of the business reflect the following data at December 31,2018:

Inventory	1/1/2018	31/12/2018
Raw Materials	$260000	$230000
Work-in-progress	$332300	$218800
Finished Goods	$1075200	$615000

Other Information:

Sales Revenue	$5765000
Factory Supplies	$45000
Direct Factory Labour	$735000
Special Design cost	$15000
Raw Materials Purchased	$540000
Plant Janitorial Service	$52000
Depreciation: plant and equipment	$165000
Total Utilities *	$550000
Plant supervisor’s salary	$480000
Property Taxes **	$300000
R & D for Graphic Designs	$70500
Total Insurance ***	$160000
Delivery truck driver’s wages	$125000
Depreciation: Delivery Truck	$52000
Administrative Wages & Salaries	$850150
Advertising Expenses	1% of sales revenue
*of the total utilities,70% relates to manufacturing and 30% relates to general and administrative costs **The property taxes should be shared:60% manufacturing & 40% general & administrative costs *** of total insurance,75% relates to plant & equipment and 25% relates to Administrative costs Required: 1.Calculate the raw materials used by   A & E Electronics. 2.What is the total Manufacturing overhead costs incurred by A & E Electronics during the period? 3.Determine the prime costs & conversion costs of the product manufactured. 4.Calculate the cost of goods manufactured for the year by A & E Electronics 5.Prepare an income statement for the year ended December 31,2018, clearly showing the calculation of costs of goods sold. List the non-production overheads in order of size starting with the largest.        6. If A & E Electronics manufactured 1500 switches for the year, what is the factory   cost per switch?

Answer 1

Dear student, we cannot able to post solution more than four sub-parts of the question as per our policy.

Answer 1
Materials inventory at beginning	$                260,000
Add: raw materials purchased	$                540,000
Material available for use	$                800,000
Less: material inventory at ending	$                230,000
Direct raw materials used	$              570,000
Answer 2
Factory supplies	$                   45,000
Special design cost	$                   15,000
Plant janitorial service	$                   52,000
Depreciation: plant and equipment	$                165,000
Plant supervisor’s salary	$                480,000
R & d for graphic designs	$                   70,500
Factory utilities (550000*70%)	$                385,000
Factory property taxes (300000*60%)	$                180,000
Factory insurance (160000*75%)	$                120,000
Total manufacturing overhead	$          1,512,500
Answer 3
Direct raw materials used	$                570,000
Add: direct factory labour	$                735,000
Prime costs	$          1,305,000
Direct factory labour	$                735,000
Add: total manufacturing overhead	$             1,512,500
Conversion costs	$          2,247,500
Answer 4
Direct raw materials used	$                385,000
Direct factory labour	$                735,000
Total manufacturing overhead	$             1,512,500
Total manufacture cost	$             2,632,500
Add: work in process inventory at beginning	$                332,300
Total cost to be accounted for	$             2,964,800
Less: work in process inventory at ending	$                218,800
Cost of goods manufactured	$          2,746,000