1. The following data were taken from the cost records of XX Co. for last year:

Depreciation, factory Indirect labor Utilities, factory Insurance, factory Lubricants for machines Direct labor Purchases of raw materials

$60,000 100,000 40,000 10,000 15,000 200,000 150,000

 

Inventories at the beginning at ending of the year were as follows:

 

Raw materials Work in process Finished goods

01/01 $10,000 25,000 30,000

31/12 $20,000 5,000 50,000

 

Required:

 

Prepare a schedule of cost of goods manufactured.

 

 

2. The following costs relate to one month’s activity in YY Co.:

Required:

1. ZZ has developed a new electronic device that he has decided to produce and market. The production facility will be in a nearby industrial park which ZZ will rent for $4,000 per month. Utilities will cost about $500 per month. He will use his personal computer, which was purchased for $3,000 last year, to monitor the production process. The computer will become obsolete before it wears out from use. The computer will be depreciated at the rate of $1,000 per year. He will rent production equipment at a monthly cost of $8,000. ZZ estimates the material cost per finished unit of product to be $50, and the labor cost to be $10. He will hire workers, and spend his time promoting the product. To do this he will quit his job that pays $4,500 per month. Advertising and promotion will cost $2,000 per month. ZZ will not draw any salary from the new company until it gets well established.

					Product Cost
	OC	SKC	VC	FC	DM	DL	MOH	SC	DC*
Facility rent
Utilities
Personal computer depreciation
Equipment rent
Material cost
Labor cost
Present Salary
Advertising