Question

The following information is obtained from the records of ABC company which manufactures tables that consist of wood and metal parts: Relevant range 5,000 Units Actual production Units 5,000 5,000 Actual sales Units Selling price $40/ Unit Materials Used: Wood Metal Paint $15,000 $10,000 $ 5,000 $ 50 $ 150 $ 500 Glue Screws Wrapping paper used by selling department Stationary: Factory Selling department Administrative departments $ $ $ 100 50 500 $ 31,350 Labor cost: Wood and metal cutters $10,000 Tables assemblers $ 7,500 Sanders $ 5,000 Factory supervisors $ 7.000

1. How much is the total costs of Direct materials?

2. How much is the total direct labor costs?

3. How much is the total factory overhead costs ( indirect material + Indirect labor + indirect other expenses)?

4. How much is the total amount of prime costs?

5. How much is the total conversion costs?

6. How much is the total manufacturing costs?

7. How much is the cost of goods manufactured?

8. How much is the total amount of sales revenues?

9. How much is the cost of goods sold?

10. How much is the gross profit or gross margin?  

Answer 1

1) Total Cost of Direct Materials :-

= Wood + Metal + Paint + Glue + Screws

= $15000 + $10000 + $5000 + $50 + $150

= $30200

2) Total Cost of Direct Labor :-

= Wood and Metal cutters + Tables assemblers + sanders

= $10000 + $7500 + $5000

= $22500

3) Total Factory Overhead Cost :-

= Depreciation + Rent + Utilities + Stationary + Factory supervisors

= $5000 + $2000 + $1000 + $100 + $7000

= $15100

4) Total Prime Cost :-

= Direct Materials Cost + Direct Labor Cost

= $30200 + $22500

= $52700

5) Total Conversion Cost :-

= Direct Labor Cost + Factory Overhead Cost

= $22500 + $15100

= $37600

6) Total Manufacturing Cost :-

= Total Direct Materials Cost + Total Direct Labor Cost + Total Factory Overhead Cost

= $30200 + $22500 + $15100

= $67800

7) Total Cost of Goods Manufactured :-

= Total Manufacturing Cost + Total Administrative Cost

= $67800 + $20000

= $87800

Total Administrative Cost :-

= Stationary + Salaries of Administrative Officers + Depreciation + Rent + Utilities

= $500 + $15000 + $1000 + $2000 + $1500

= $20000

8) Total Sales Revenues :-

= Actual Sales * Selling Price per unit

= 5000 * $40

= $200000

9) Total Cost of Goods Sold :-

= Total Cost of Goods Manufactured + Total Selling Cost

= $87800 + $24050

= $111850

Total Selling cost :-

= Stationary + Sales Commission + Depreciation + Rent + Utilities + Wrapping Paper used

= $50 + $20000 + $2000 + $1000 + $500 + $500

= $24050

10) Gross Profit :-

= Total Sales Revenues - Total Cost of Goods Sold

= $200000 - $111850

= $88150