Individual Assignment $-$ Mini Cases$/$Problems

This assessment is centred on the topics "Cost Classification" & "Inventory Valuation" which are covered in

Units $2$&$3$ & speaks to the following objectives:

Course Objectives:

Distinguish between manufacturing & non$-$manufacturing overhead $($product versus period costs$)$

Classify costs as prime costs or conversion costs

Use the correct inventory to determine the cost of goods manufactured and cost of goods sold.

Prepare a statement of cost of goods manufactured, clearly showing total manufacturing costs & total

manufacturing costs to account for.

Prepare an income statement for a manufacturing entity, clearly showing Cost of Goods Sold. Question $1$

$(25$ marks$)$

Leather Authentic Company is a manufacturer of leather cases for tablets. The following information pertains to

operations during the $2023$ calendar year.

${?}^1$ Of the total depreciation, $80\%$ relates to factory plant & equipment and $20\%$ relates to general and administrative

costs.

${?}^2$ Of the total utilities, $75\%$ relates to production and $25\%$ relates to general and administrative costs.

${?}^3$ The property taxes should be shared: $85\%$ production & $15\%$ general & administrative costs

The following additional information is also available:

Required:

a$)$ Calculate the raw material used by Leather Authentic Company.

$(2$ marks$)$

b$)$ Calculate the indirect materials used by Leather Authentic Company

$(2$ marks$)$

c$)$ What is the total manufacturing overhead cost incurred by Leather Authentic Company during the period?

d$)$ Determine the prime cost & conversion cost of the cases manufactured.

e$)$ Prepare a schedule of cost of goods manufactured for the year ended December $31,2023,$ clearly showing

total manufacturing cost & total manufacturing costs to account for.

$(5$ marks$)$

f$)$ Prepare an income statement for Leather Authentic Company for the year ended December $31,2023.$ List

the non$-$manufacturing overheads in order of size starting with the largest.

$(\frac{61}{2}$ marks$)$

g$)$ What is the selling price per case if Leather Authentic manufactured $9,600$ cases for tablets for the year

and uses a mark$-$up of $50\%$ on cost$?$

h$)$ How does the format of the income statement for a manufacturing concern differ from the income statement

of a merchandising entity?

Calculate unit factory cost and selling price, given the mark$-$up applied by the entity.

Explain the difference between the income statements of a merchandiser & a manufacturer

Given a set of transactions of a merchandiser for a specified period, prepare an inventory record to

determine the value of ending inventory & cost of goods sold.

Demonstrate how sales returns & purchases returns are treated in the inventory record and how they impact

the income statement.

Prepare an income statement for a merchandising entity.

Use journal entries to demonstrate the difference between a perpetual & a periodic inventory system using

purchases, freight$-$in & sale of inventory transactions.

Explain the differences between a product cost and a period cost.

This assessment will account for $35\%$ of your overall mark. You are required to show ALL supporting workings

where necessary and state any assumption$($s$)$ made.

You are required to submit this assignment by Thursday, October $3,2024,$ by $11$:$55$ p$.$m$.$ EC Time $(10$:$55$ p$.$m$.$

Jamaica Time; $9$:$55$ p$.$m$.$ Belize Time.$)$

Specifications:

MS Word or Excel Document $(97-2003$ Version$)$

Font Size $12$

Pdf documents will not be graded

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