Pearce Manufacturing Inc In Addition,the Following Information Is Also Available

question 42

Essay

Pearce Manufacturing Inc.incurred the following costs in February:
$\begin{array}{lrll}\text { Direct labour } & \$ 40000 & \text { Advertising costs } & \$ 1000 \\\text { Indirect labour } & 15000 & \text { Factory rent } & 4000 \\\text { Administrative salaries } & 8000 & \text { Factory depreciation } &2000\\\text { Raw materials purchased } & 10000 & \text { Administrative rent }&3000 \\\text { Indirect materials used } & 4000 & \text { Administrative depreciation } & 1000\end{array}$

In addition,the following information is also available:
$\begin{array}{c}\begin{array}{l}\\ \text { Raw materials }\\ \text { Work-in-process }\\ \text { Finished goods}\\\\ \text { Number of units produced}\\ \text { Number of units sold}\\ \text { (sales price of \( \$ 25 \) per unit) }\\\end{array}\begin{array}{rr}\underline{\text { Beginning} } &\underline{ \text { Ending }}\\\$ 2000 & \$ 4000 \\25000 & 18000 \\4000 & 12000 \\\\& 10000 \text { units } \\\\& 9000 \text { units }\end{array}\end{array}$






Required:
A. Calculate total period costs.
B. Calculate raw materials used.
C. Calculate cost of goods manufactured.
D. Calculate the product cost per unit.
E. Calculate cost of goods sold.
F. Calculate net income. (ignore taxes)

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Definitions:

Net New Equity

The amount of equity capital a company raises through the issuance of new shares minus any repurchases of existing shares.

Equity Sales

The process of selling ownership interest in a company, typically in the form of stocks, to raise capital.

Equity Repurchases

The method through which a corporation repurchases its shares from the market, thus decreasing the total number of shares available.

Fixed Cost

Expenses that do not change in total regardless of the level of production or sales activity, such as rent, salaries, and insurance.