Your team pulled together the following Cost of Goods Manufactured $($COGM$)$ Schedule

for the month of July in your Dream Company's second year of operations

You produce a line of gummies for your legal drug production company & sales have been steady

Direct Materials:

Beginning Balance, Raw Materials $50,000$

Purchases of Raw Materials $247,000$

Raw Materials Available for Use $297,000$

$($Ending Balance, Raw Materials$)31,000$

Raw Materials Used in Production $266,000$

$($Indirect Materials used in prodcution$)45,100$

Direct Materials Used in Production $220,900$

Direct Labour $110,600$

Manufacturing Overhead

Indirect Labour $52,200$

Production facility rent $41,700$

Utilities $30,400$

Maintenance for production equipment $13,600$

Cleaning and sanitization services $18,900$

Depreciation on production equipment $15,100$

Total manufactuing overhead cost $171,900$

Total Manufacturing Cost $503,400$

Beginning Work in Process Inventory $85,900$

$($Ending Work in Process Inventory$)79,500$

Cost of Goods Manufactured $509,800$

The following information also was shared with the management team:

a$)$ Sales of gummies total $822,100$

b$)$ Finished Goods

$-$ end of June $68,700$

$-$ end of July $68,600$

c$)$ Advertising $29,500$

d$)$ Admin costs $331,100$

Required:

$1)$ Prepare the Cost of Goods Sold section for your Income Statement $5$ marks

$2)$ What is the Dream Company's gross margin amount? $2$ marks

$3)$ What $2$ ways would you suggest to increase the gross margin? $2$ marks

$4)$ For each of those suggestions, provide a risk or problem that might arise $2$ marks

$5)$ Is the company profitable in July? $($show your work$)4$ marks

$6)$ What spreadsheet function or formula would you use to ensure that $1$ marks

corrections made to the COGM schedule flowed through properly to the

COGS schedule?

$7)$ if gummies sold in packs of $8,$ and you sold these # of packs: $68,5082$ marks

what is the maximum production cost per pack that would still allow

the company to remain profitable?

$8)$ Show the spreadsheet formula you would use to calculate the $2$ marks

cost of goods sold per $8$ pack

$9)$ if you produced the following # of packs in July $70,5082$ marks

what unit cost would you use to budget for August production?

$10)$ why might that budgeted unit cost not be perfectly accurate for August? $1$ mark

$23$ Total

Answer rating: 100% (QA)

1 Cost of Goods Sold section for the Income Statement Beginning Finished Goods Inventory 68700 Cost of Goods Manufactured 509800 Ending Finished Goods Inventory 68600 Cost of Goods Sold Beginning Fini... View the full answer