Cost of Goods Manufactured The following items pertain to the Nicole Corporation: Accounts Receivable Accounts Payable...

Transcribed Image Text:

Cost of Goods Manufactured The following items pertain to the Nicole Corporation: Accounts Receivable Accounts Payable Direct Materials Finished Goods Work in Progress Dividends Selling & Administrative expenses Direct Materials Purchased Direct Labor Factory Supplies Property Tax on Factory Factory Utilities Indirect Labor Depreciation--Plant & Equipment Sales Miscellaneous Factory Overhead Retained Earnings (A) Prepare a (B) Required: (1) (2) (5) (1) (2) HOOLCODOC December 1. COGM Statement Income Statement $50,000 40,000 30,000 40,000 10,000 40,000 December 31. $30,00 20,000 5,000 12,000 2,000 4,000 70,000 80,000 70,000 6,000 1,000 5,000 20,000 21,000 350,000 10,000 (3) Retained Earnings Statement Suppose that both the direct materials and the depreciation were related to the manufacture of the equivalent of 105,000 units of product. What is the unit cost for the direct materials assigned to those units? For depreciation? Assume that yearly depreciation is computed on a straight-line basis. (3) As a management accountant, explain concisely to the president why the unit costs differed in requirements (1) and (2). Determine prime costs. Determine conversion costs. Assume that the implied cost behavior patterns in requirement (1) persist. That is, direct material costs behave as variable cost and depreciation behaves as a fixed cost. Repeat the computations in requirement (1), assuming that the costs are being predicted for the manufacture of the equivalent of 126,000 units of product. How would the total costs be affected? Cost of Goods Manufactured The following items pertain to the Nicole Corporation: Accounts Receivable Accounts Payable Direct Materials Finished Goods Work in Progress Dividends Selling & Administrative expenses Direct Materials Purchased Direct Labor Factory Supplies Property Tax on Factory Factory Utilities Indirect Labor Depreciation--Plant & Equipment Sales Miscellaneous Factory Overhead Retained Earnings (A) Prepare a (B) Required: (1) (2) (5) (1) (2) HOOLCODOC December 1. COGM Statement Income Statement $50,000 40,000 30,000 40,000 10,000 40,000 December 31. $30,00 20,000 5,000 12,000 2,000 4,000 70,000 80,000 70,000 6,000 1,000 5,000 20,000 21,000 350,000 10,000 (3) Retained Earnings Statement Suppose that both the direct materials and the depreciation were related to the manufacture of the equivalent of 105,000 units of product. What is the unit cost for the direct materials assigned to those units? For depreciation? Assume that yearly depreciation is computed on a straight-line basis. (3) As a management accountant, explain concisely to the president why the unit costs differed in requirements (1) and (2). Determine prime costs. Determine conversion costs. Assume that the implied cost behavior patterns in requirement (1) persist. That is, direct material costs behave as variable cost and depreciation behaves as a fixed cost. Repeat the computations in requirement (1), assuming that the costs are being predicted for the manufacture of the equivalent of 126,000 units of product. How would the total costs be affected?

Answer rating: 100% (QA)

The image youve shared shows a table of accounts with various financial figures and then presents four requirements which relate to preparing financial statements and analyzing costs for a company nam... View the full answer