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3 August, 05:56

XYZ Company recorded the following information related to their inventory accounts for 2020: January 1, 2020 December 31, 2020 Direct materials 50,000 37,000 Work in process 38,000 41,000 Finished goods 32,000 34,000 The following costs were taken from XYZ Company's accounting records for 2020: Direct materials purchased ... $129,000 Depreciation, factory equipment ... 37,000 Sales revenue ... 590,000 Utilities (60% for factory; 40% for office building) ... 30,000 Sales commissions ...

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  1. 3 August, 09:14
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    Complete question is:

    XYZ Company recorded the following information related to their inventory

    accounts for 2020:

    January 1, 2020 December 31, 2020

    Direct materials 37,000 50,000

    Work in process 38,000 41,000

    Finished goods 22,000 34,000

    The following information was taken from XYZ Company's accounting records

    for 2020:

    Sales revenue ... $630,000

    Direct materials purchased ... ?

    Depreciation, factory equipment ... 34,000

    Prime costs ... 250,000

    Utilities (60% for factory; 40% for office building) ... 20,000

    Sales commissions ... ?

    Indirect materials ... 25,000

    Depreciation, office equipment ... 30,000

    Rent, factory building ... 56,000

    Net income ... 10,000

    Direct labor ... ?

    Advertising ... 75,000

    Production supervisor's salary ... 81,000

    Additional information:

    1. Direct labor comprised 35% of the conversion costs for 2020.

    2. The actual overhead cost for 2020 was equal to the overhead applied

    to production. Thus there was no overhead variance for 2020.

    A) Calculate XYZ Company's direct labor cost for 2020.

    B) Calculate the direct materials purchased by XYZ Company in 2020.

    C) Calculate XYZ Company's sales commissions for 2020.

    Answer is:

    a) Total overhead = 34000+12000+25000+56000+81000 = 208000

    Direct labor = 208000*35/65 = 112000

    b) Direct material used = 250000-112000 = 138000

    Direct material purchase = 138000+50000-37000 = 151000

    c) Sales and administrative expense other than sales commission = 113000

    Sales commission = 630000-443000-113000-10000 = 64000
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