Acct 3334 Assignment 2 Winter 2011

Acct 3334 Assignment 2 Winter 2011 - They are paid an...

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Accounting 3334 Assignment 2 Winter, 2011 Basseterre Limited manufactures widgets in its Monkey Hill plant. Results for 2010 follow: Capacity in units 20,000 Units produced 16,000 Sales in units 14,000 Beginning inventory 0 Spoiled units 0 Sales price $ 200 Manufacturing costs incurred: Raw materials used $ 48/unit Royalty paid per unit $ 2/unit Shipping cost per unit of raw mat. $ 10/unit Total costs incurred: Direct manufacturing labour $ 480,000 Factory building amortization $ 100,000 Machine rental costs $ 240,000 Factory property taxes $ 40,000 Factory supervision $ 140,000 Cleaning $ 50,000 Heat, water, electricity $ 50,000 Factory security $ 40,000 Factory material handling $ 25,000 Factory insurance $ 35,000 Other manufacturing costs $ 50,000 Fuel for machines $ 64,000 Maintenance $ 35,000 Selling and administration $ 350,000 Other information: The company rented 5 machines for the year. Each machine was capable of producing 4,000 units annually. Ten workers were hired for direct production.
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Unformatted text preview: They are paid an annual salary. Two workers worked directly with each machine. The plant operated for 50 weeks, 5 days per week, 8 hours per day. Maintenance was performed after production hours in the evening. The machines operated only when units are being produced (i.e. Fuel used only when units were produced.) RM were purchased as used. Required: (1) Prepare an income statement using 'throughput' costing. (Separate selling and administration costs from manufacturing costs.) (2) Prepare an income statement using 'variable' costing. (Separate selling and administration costs from manufacturing costs.) (3) Prepare an income statement using 'absorption' costing. (Separate s & a costs as well. Do not include any selling and administration costs in the calculation of a unit cost.) (4) Reconcile the three net incomes calculated in requirements (1) to (3) above....
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This note was uploaded on 10/23/2011 for the course ACCT 3334 taught by Professor Don during the Spring '11 term at Dalhousie.

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Acct 3334 Assignment 2 Winter 2011 - They are paid an...

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