Question
Suppose you are working as trainee after BBA and your management given the following data pertain to Maize Products Company: Sales Revenue 1,000,000 Direct materials
Suppose you are working as trainee after BBA and your management given the following data pertain to Maize Products Company:
Sales Revenue
1,000,000
Direct materials inventory, Jan 1, 2019
20,000
Direct labor-Wages
350,000
Depreciation expense-Plant and equipment
80,000
Indirect labor-Wages
5,000
Heat, Light, andpower - Plant
12,000
Supervisor's salary-Plant
40,000
Finished goods inventory, Jan 1, 2019
35,000
Work in Process inventory, Dec, 31, 2019
25,000
Supplies-Administrative office
6,000
Property taxes-Plant
13,000
Finished goods inventory, Dec 31, 2019
40,000
Direct materials inventory, Dec 31, 2019
30,000
Sales representative's salaries
190,000
Work in Process inventory, Jan, 1, 2019
35,000
Direct materials purchases
100,000
Supplies-Plant
4,000
Depreciation-Administrative office
30,000
Required
a)As a trainee Prepare Direct Material used, FOH, Prime Cost and Conversion cost.
b)Explain Why Management prepares above mentioned costs terms and how each cost terms always favor or disappoint to management decision to decrease or decrease product cost? If product cost increases or decreases in any period what impact on firm profit?
c)Prepare a statement of cost of goods manufactured and an income statement for Maize Products Company for the year ended December 31, 2019.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started