Marvin Ltd

question 102

Essay

Marvin Ltd.uses an automated process in its manufacturing operations.On November 1, the company had 25,000 units in beginning work in process which were 80% complete with respect to conversion.During the month of November, it started 120,000 into production.On November 30, there were 20,000 units in process, which were 40% complete with respect to conversion.Direct materials are added at the beginning of the process, and no units are spoiled in production.The beginning inventory had direct materials costs of $105,750 and conversion costs of $45,500.During the month, the company issues $510,000 of direct materials and incurred $203,400 of conversion costs.Required:
Prepare a production cost worksheet using the FIFO method.

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Definitions:

Gross Profit Percentage

A financial ratio expressing gross profit as a percentage of revenue, indicating the efficiency of production or service delivery.

Net Profit Margin Percentage

This is a financial metric that represents the percentage of revenue that remains as profit after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.

Cost of Goods Sold Percentage

A ratio that compares the cost of goods sold to the total sales revenue, indicating the efficiency of production and pricing.

Asset Turnover Ratios

Ratios that capture how efficiently a company uses its assets.