Hickey Company Hickey Company, a manufacturing firm, produces a... Hickey Company Hickey Company, a manufacturing firm, produces
Question:
Hickey Company Hickey Company, a manufacturing firm, produces a...
Hickey Company
Hickey Company, a manufacturing firm, produces a single product. The following information has been taken from the company's production, sales, and cost records for the just-completed year, 2017:
Production in units of 30,000
Sales in units 26,000
Ending finished goods inventory in units 4,000
Sales in dollars $650,000
Costs:
Advertising $50,000
Direct labor $80,000
Indirect labor $60,000
Raw materials purchased $160,000
Building rent (production uses 80% of the space; administrative
and sales offices use the rest) $50,000
Utilities, factory $35,000
Royalty paid for use of production patent, $1 per unit produced?
Maintenance, factory $25,000
Rent for special production equipment, $6,000 per year plus
$0.10 per unit produced?
Selling and administrative salaries $140,000
Other factory overhead costs $11,000
Other selling and administrative expenses $20,000
Beginning End
Of Year Of Year
Inventories:
Raw materials $20,000 $10,000
Work in process $30,000 $40,000
Finished goods $0 $60,000
The finished goods inventory is carried at the average unit production cost for the year.
The selling price of the product is $25 per unit.
Required:
- Prepare a schedule of the cost of goods manufactured for the year. (14 marks)
- Compute the cost of goods sold. (2 marks)
- Compute Gross margin. (2 marks)
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer