Question

Cost Assignment Methods

Brody Company makes industrial cleaning solvents. Various chemicals, detergent, and water are mixed together and then bottled in 10-gallon drums. Brody provided the following information for last year:

Raw materials purchases	$250,000
Direct labor	140,000
Depreciation on factory equipment	45,000
Depreciation on factory building	30,000
Depreciation on headquarters building	45,000
Factory insurance	15,000
Property taxes:
Factory	20,000
Headquarters	18,000
Utilities for factory	34,000
Utilities for sales office	2,400
Administrative salaries	150,000
Indirect labor salaries	153,000
Sales office salaries	90,000
Beginning balance, raw materials	127,000
Beginning balance, work in process	124,000
Beginning balance, finished goods	84,000
Ending balance, raw materials	105,000
Ending balance, work in process	130,000
Ending balance, finished goods	79,000

Last year, Brody completed 100,000 units. Sales revenue equaled $1,200,000, and Brody paid a sales commission of 5 percent of sales.

4. Prepare a cost of goods manufactured statement for last year.

Brody Company
Statement of Cost of Goods Manufactured
For Last Year
	$
Total manufacturing cost	$
	$

Calculate the unit product cost. If required, round your answer to the nearest cent.

$

5. Prepare a cost of goods sold statement for last year.

Brody Company
Statement of Cost of Goods Sold
For Last Year
	$
	$

Answer 1

4) Statement of Cost of Goods Manufactured:
Brody Company
Statement of Cost of Goods Manufactured
For Last Year
Beginning balance, raw materials	$127,000
Add: Raw material purchases	$250,000
Total raw materials available for sale	$377,000
Less: Ending balance, raw materials	($105,000)
Raw materials used		$272,000
Direct labor		$140,000
Factory overheads:
Depreciation on factory equipment	$45,000
Depreciation on factory building	$30,000
Depreciation on headquarers building	$45,000
Factory insurance	$15,000
Property taxes of factory	$20,000
Utilities for factory	$34,000
Utilities for sales office	$2,400
Indirect labor salaries	$153,000
Total factory overheads		$344,400
Total Manufacturing Costs		$756,400
Add: Beginning balane, work in process		$124,000
Less: Ending balance, work in process		($130,000)
Cost of Goods Manufactured (a)		$750,400
Total number of units produced (b)		100,000
Unit product cost (a/b)		$7.50
5) Statement of Cost of Goods Manufactured:
Brody Company
Statement of Cost of Goods Manufactured
For Last Year
Cost of Goods Manufactured	$750,400
Add: Beginning balance, finished goods	$84,000
Less: Ending balance, Finished Goods	($79,000)
Cost of Goods Sold	$755,400