Bubba Manufacturing Company provided the following information for the fiscal year to June 30, 2020: Inventories 01/07/2019 30/06/2020 Direct Materials Work-in-Process Finished Goods $72,000 107,000 149,500 $65,000 128,000 141,700 Other information: Office cleaner’s wages 4,500 Sales Revenue 1,031,000 Raw materials purchased 235,000 Factory wages 239,700 Indirect materials 23,500 Delivery truck driver’s wages 15,400 Indirect labor 9,500 Depreciation on factory plant & equipment 32,000 Insurance 1 60,000 Depreciation on delivery truck 7,250 Utilities 2 118,750 Administrative salaries 41,250 Special Design Costs 5,000 Selling expenses 9,000 Sales Commission 2% of gross profit 1 Of the total insurance, 66⅔% relates to the factory facilities & 33⅓% relates to general & administrative costs. 2 Of the total utilities, 80% relates to the manufacturing facilities & 20% relates to the office area. Requirements: a) What was the amount of direct materials used in production? b) What was the amount of manufacturing overhead costs? c) What is the prime cost and conversion cost of the product? d) Prepare a schedule of cost of goods manufactured for the year ended June 30, 2020, clearly showing total manufacturing costs & total manufacturing costs to account for. e) Prepare an income statement for Bubba Manufacturing for the year ended June 30, 2020, clearly showing cost of goods sold. f) During the year, Bubba Manufacturing Company produced 4,000 units of product. What was the production cost of each unit? g) How does the format of the income statement for a manufacturing entity differ from the income statement of a merchandising entity? please provide answer for E ,F and G
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Bubba Manufacturing Company provided the following information for the fiscal year to
June 30, 2020:
Inventories 01/07/2019 30/06/2020
Direct Materials
Work-in-Process
Finished Goods
$72,000
107,000
149,500
$65,000
128,000
141,700
Other information:
Office cleaner’s wages 4,500
Sales Revenue 1,031,000
Raw materials purchased 235,000
Factory wages 239,700
Indirect materials 23,500
Delivery truck driver’s wages 15,400
Indirect labor 9,500
Depreciation on factory plant & equipment 32,000
Insurance 1 60,000
Depreciation on delivery truck 7,250
Utilities 2 118,750
Administrative salaries 41,250
Special Design Costs 5,000
Selling expenses 9,000
Sales Commission 2% of gross profit
1 Of the total insurance, 66⅔% relates to the factory facilities & 33⅓% relates to general
& administrative costs.
2 Of the total utilities, 80% relates to the manufacturing facilities & 20% relates to the
office area.
Requirements:
a) What was the amount of direct materials used in production?
b) What was the amount of manufacturing overhead costs?
c) What is the prime cost and conversion cost of the product?
d) Prepare a schedule of cost of goods manufactured for the year ended June 30, 2020,
clearly showing total
e) Prepare an income statement for Bubba Manufacturing for the year ended June 30,
2020, clearly showing cost of goods sold.
f) During the year, Bubba Manufacturing Company produced 4,000 units of product.
What was the production cost of each unit?
g) How does the format of the income statement for a manufacturing entity differ from
the income statement of a merchandising entity?
please provide answer for E ,F and G
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