Question

Problem 2-24 Schedule of Cost of Goods Manufactured; Income Statement; Cost Behaviour (LO1, LO2, LO3, LO4, LO5) Carlton Manufacturing Company provided the following details about operations in February: $ Purchases of raw materials Maintenance, factory Direct labour Depreciation, factory equipment Indirect materials, factory Selling and administrative salaries Utilities, factory Sales commissions Insurance, factory equipment Depreciation, sales equipment Advertising expenses Rent, factory building 169,000 40,900 35, 100 60,200 3,650 46,400 28,600 18,800 4,650 22,600 114,000 The company also provided details regarding the balances in the inventory accounts at the beginning and end of the month as follows: End of Month Raw materials Work in process Finished goods Beginning of Month $ 38,000 29,200 21,500 Raw materials used in production cost $181,280, total overhead costs for the year were $210,560, the goods available for sale totalled $412,000, and the cost of goods sold totalled $356,500.
Please check my answers.

Answer 1

The schedule of cost of goods manufactured and cost of goods sold looks fine.

If 17600 units are produced, then average cost per direct materials = 181280/17600 = 10.3

average cost per rent factory building = 72560/17600 = 4.12

Since material cost is variable, it will change as per the number of units produced. However, rent, factory cost will remain the same i.e 72560.

So average cost per direct material for 22600 units is 10 and average cost per rent, factory building is 72560/22600 = 3.21.

All your answers are fine.

All the best.