Question

eBook Cost Assignment Methods Brody Company makes industrial deaning solvents. Various chemicals, detergent, and water are mixed together and then bottled in 10-gallon provided the following information for last year Raw materials purchases Direct labor Depreciation on factory equipment Depreciation on factory building Depreciation on headquarters building Factory insurance Property taxes: $250,000 140,000 45,000 30,000 60,000 15,000 20,000 18,000 34,000 1,800 150,000 153,000 90,000 127,000 124,000 84,000 102,000 Factory utilities for factory Utilities for sales office Administrative Indirect labor salaries Sales office salaries Beginning balance, raw materials Beginning balance, work in process Beginning balance, finished goods Ending balance, raw materials salaries Check Hy Work 3 more Check My Work uses remaining Next 4) ENG 13/01/2019 1015 PM

Answer 1

1)	Direct materials used in production = Beginning balance of raw materials + Purhcases of raw materials - Ending balance of raw materials = 127000+250000-102000 =	275000
2)	Total prime cost = Direct materials used + Direct labor cost = 275000+140000 =	415000
3)	Total converstion cost = Direct labor cost + Manufacturing ovehead = 140000+(45000+30000+15000+20000+34000+153000) =	437000
4)	COST OF GOODS MANUFACTURED
	Direct materials used	275000
	Direct labor	140000
	Manufacturing overhead	297000
	Total manufacturing cost	712000
	Add: Beginning WIP	124000
	Less: Ending WIP	130000
	Cost of goods manufactured	706000
	Unit product cost = 706000/100000 =	7.06
5)	COST OF GOODS SOLD
	Beginning finished goods	84000
	Add: Cost of goods manufactued	706000
	Less: Ending finished goods	79000
	Cost of goods sold	711000
6)	INCOME STATEMENT
	Sales	1200000	100.00%
	Cost of goods sold	711000	59.25%
	Gross profit	489000	40.75%
	Less: Operating expenses:
	Depreciation on headquarters building	60000	5.00%
	Property taxes-Headquarters	18000	1.50%
	Utilities for sales office	1800	0.15%
	Administrative salaries	150000	12.50%
	Sales office salaries	90000	7.50%
	Sales commissions (5% of 120000)	60000	5.00%
	Total operating expenses	379800	31.65%
	Net operating income	109200	9.10%