The following are data regarding last year’s production of Old Joe, one of the major products of Columbus Toy Company:
Purchases of direct materials | $400, 000 |
Direct materials used | 402,000 |
Direct labor payrolls (paid during the year) | 180,000 |
Direct labor costs assigned to production | 220,000 |
Manufacturing overhead (incurred and applied) | 330,000 |
During the year, 50,000 units of this product were manufactured and 51.500 units were sold. Selected information concerning inventories during the year follows:
| End of Year | Beginning of Year |
Materials. | $ ? | $15,000 |
Work in Process | 6.000 | 5.000 |
Finished Goods. Jan. 1 (4.000 units @ $19) | ? | 76,000 |
Instructions
a. Prepare a schedule, of the cost of finished goods manufactured for the Old Joe product.
b. Compute the average cost of Old Joe per finished unit.
c. Compute the cost of goods sold associated with the sale of Old Joe. Assume that there is a first-in. first-out (FIFO) Flow through the Finished Goods Inventory account and that all units completed are assigned the per-unit costs determined in part b.
d. Compute the amount of inventory relating to Old Joe that will be listed in the company’s balance sheet at December 31 Show supporting computations for the year-end amounts of materials inventory and finished goods inventory.
e. Explain how the $220,000 in direct labor costs assigned to production affect the company’s income statement and balance sheet.
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