Question

Soo Office Equipment manufactures and sells metal shelving. It began operations on January 1, 2013. Costs incurred for 2013 are as follows (V stands for variable; F stands for fixed):
Direct materials used costs ........... $140,000 V
Direct manufacturing labour costs ........ 30,000 V
Plant energy costs .............. 5,000 V
Indirect manufacturing labour costs ........ 10,000 V
Indirect manufacturing labour costs ........ 16,000 F
Other indirect manufacturing costs ........ 8,000 V
Other indirect manufacturing costs ........ 24,000 F
Marketing, distribution, and customer-service costs ... 122,850 V
Marketing, distribution, and customer-service costs .. 40,000 F
Administrative costs .............. 50,000 F
Variable manufacturing costs are variable with respect to units produced. Variable marketing, distribution, and customer-service costs are variable with respect to units sold.
Inventory data are as follows:
Production in 2013 was 100,000 units. Two kilograms of direct materials are used to make one unit of finished product.
Revenues in 2013 were $436,800. The selling price per unit and the purchase price per kilogram of direct materials were stable throughout the year. The company’s ending inventory of finished goods is carried at the average unit manufacturing costs for 2013. Finished goods inventory at December 31, 2013, was $20,970.
REQUIRED
1. Calculate direct materials inventory, total cost, December 31, 2013.
2. Calculate finished goods inventory, total units, December 31, 2013.
3. Calculate selling price per unit in 2013.
4. Calculate operating income for 2013 (show your computations).


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  • CreatedJuly 31, 2015
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