Question

Preparing a schedule of cost of goods manufactured Wilson Corp., a lamp manufacturer, provided the following information for the year ended December 31, 2018:

Balances: Beginning Ending

Direct Materials \( 59,000 \) 23,000

Work-in-Process Inventory 109,000 62,000

Finished Goods Inventory 41,000 44,000

Other information:

Depreciation, plant building and equipment $ 16,000

Direct materials purchases 151,000

Insurance on plant 24,000

Sales salaries 47,000

Repairs and maintenance—plant 10,000

Indirect labor 39,000

Direct labor 121,000

Administrative expenses 60,000

Requirements 2. What is the unit product cost if Wilson manufactured 3,700 lamps for the year?

Short answer

The unit product cost is computed as $131.89 as per the requirement.

Step-by-step solution

Step-by-Step SolutionStep 1: Computation of Cost of sales

Particulars	Amount ($)
Cost of goods manufactured	$444,000
Add: Opening finished goods	$41,000
Less: Closing finished goods	$44,000
Cost of goods sold	$441,000
Selling and distribution cost	$47,000
Cost of sales	$488,000

Computation of unit product cost

$$\begin{gathered} \mathbf{Unit}\mathbf{}\mathbf{Product}\mathbf{}\mathbf{cost}\mathbf{=}\frac{\mathrm{Cost}\mathrm{of}\mathrm{sales}}{\mathrm{Number}\mathrm{of}\mathrm{units}\mathrm{manufactured}} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\frac{\$488,000}{3,700} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{131}\mathbf{.}\mathbf{89} \end{gathered}$$