The Owen Sound Company manufactures fishing rods.Last year,direct materials costing $516,000 were put into production.Direct labour costs of $430,000 were incurred,and overhead equalled $645,000.The company had operating income for the year of $58,000 and manufactured and sold 86,000 fishing rods at a sales price of $21 per unit.Assume that there were no beginning or ending inventory balances in the work in process and no finished goods inventory accounts.
Required:
A. Compute the per-unit product cost.
B. Compute the per-unit prime cost.
C. Compute the per-unit conversion cost.
D. Compute the gross margin for the year.
E. Compute the selling and administrative expenses for the year.
F. Assume production amounted to 86,000 fishing rods and 80,000 were sold. Compute cost of goods sold.
G. Assume production amounted to 86,000 fishing rods and 80,000 were sold. Compute the balance in ending finished goods inventory.

Question

The Owen Sound Company manufactures fishing rods.Last year,direct materials costing $516,000 were put into production.Direct labour costs of $430,000 were incurred,and overhead equalled $645,000.The company had operating income for the year of $58,000 and manufactured and sold 86,000 fishing rods at a sales price of $21 per unit.Assume that there were no beginning or ending inventory balances in the work in process and no finished goods inventory accounts.
Required: 
A.	Compute the per-unit product cost.
B.	Compute the per-unit prime cost.
C.	Compute the per-unit conversion cost.
D.	Compute the gross margin for the year.
E.	Compute the selling and administrative expenses for the year.
F.	Assume production amounted to 86,000 fishing rods and 80,000 were sold. Compute cost of goods sold.
G.	Assume production amounted to 86,000 fishing rods and 80,000 were sold. Compute the balance in ending finished goods inventory.

Quizplus · Accepted Answer

The Answer of The Owen Sound Company manufactures fishing rods.Last year,direct materials costing $516,000 were put into production.Direct labour costs of $430,000 were incurred,and overhead equalled $645,000.The company had operating income for the year of $58,000 and manufactured and sold 86,000 fishing rods at a sales price of $21 per unit.Assume that there were no beginning or ending inventory balances in the work in process and no finished goods inventory accounts.
Required: 
A.	Compute the per-unit product cost.
B.	Compute the per-unit prime cost.
C.	Compute the per-unit conversion cost.
D.	Compute the gross margin for the year.
E.	Compute the selling and administrative expenses for the year.
F.	Assume production amounted to 86,000 fishing rods and 80,000 were sold. Compute cost of goods sold.
G.	Assume production amounted to 86,000 fishing rods and 80,000 were sold. Compute the balance in ending finished goods inventory.

The Owen Sound Company Manufactures Fishing Rods