Question

i meed part b andwered

PART A Miller Corporation is a manufacturer of precision drill bits. The following information pertains to operations during the 2018 calendar year. Sales Revenue Direct Factory Labor $13.075,000 3.390,600 314,250 Indirect materials used Indirect Factory Labor Total Depreciation Total Utilities2 Distribution & Customer Service Costs 1,232,250 400,000 525,000 67,600 Insurance on Plant & Equipment Property Taxes 3 Administrative Wages & Salaries Advertising Expenses Sales Commission 85,000 90,000 876.500 77.500 6% of Sales Revenue Of the total depreciation, 85% relates to factory plant & equipment and 15% relates to general and administrative costs. 2 Of the total utilities, 70% relates to manufacturing and 30% relates to general and administrative costs. The property taxes 3 The property taxes should be shared: 80% manufacturing & 20% general & administrative costs The following additional information is also available: Inventory Data: 1/1/2018 Purchases 31/12/2018 $750,000 $4.330,000 n/a n/a Raw Materials $807,000 924,000 1,720,200 Work In Progress 1,089.400 Finished Goods 1,142,600 Required a) Calculate the raw material used by Miller Corporation (2 marks) b) What is the total manufacturing overhead cost incurred by Miller Corporation during the period? (2 marks) (3 marks) c) Determine the prime cost & conversion cost of the product manufactured. d) Prepare a schedule of cost of goods manufactured for the year ended December 31, 2018, clearly showing total manufacturing cost & total manufacturing costs to account for. 5 marks) e) Prepare an income statement for Miller Corporation for the year ended December 31, 2018. List the non-production overheads in order of size starting with the largest. nWhat is the unit product cost if Miller Corporation manufactured 20,000 drill bits for the year? (6 marks) (2 marks) g) How does the format of the income statement for a manufacturing concern differ from the income statement of a merchandising business? (2 marks)

Answer 1

Part B

Answer A

From the above graph, lowest point is point where horizontal axis (x = number of patient days = 1200) and vertical axis (y= department cost = $18,000)
From the above graph, when 3000 patient days, then horizontal axis (x = number of patient days = 3000) and vertical axis (y= department cost = $30,000)
Level	Patient days	Department cost
Point when 3000 patient days	3,000	$                 30,000
Lowest Point	1,200	$                 18,000
Difference	1,800	$                 12,000
Variable Cost per patient day (12000/1800)		6.666667
Department cost at lowest point		$                 18,000
Less: Variable Costs at lowest point (6.666667*1200)		$                   8,000
Total Fixed cost		$                 10,000

Answer B

When patient days is 0 the total cost equals fixed costs that is $10,000
When patient days is 3,000 the total cost is $30,000
Change in cost (30000-10000)		20000
Divided by: change in the patient days (3000-0)		3000
Variable Cost per patient day		6.666667

Answer C

The cost function for an entity

Total cost = Fixed cost + Variable Cost

y = 10000 + 6.666667x

where y represent the total cost of the department and x represent the number of patient days.

Answer D

When 6,000 patient days the total cost = ?

y = 10000 + 6.666667x

y = 10000 + 6.666667*(6000)

y = 10000 + 40000

y = 50000

Total cost at the 6000 patient days = y = $50,000