Question

Technology Accessories Inc. is a designer, manugacturer, and Distributor of accessories for consumer electronica products. Early in 2013, the company begin production of a leather cover for tablet computers, call the ileather. The cover is made of stitched leather with a velvet interior and fits snugly around most tablet computers. In January, $750,000 was spent on developing marketing and advertising materials. For the first six months of 2013, the company spent an additional $1,400,00 promoting the ileather. The product was ready for manufacture on January 21, 2013.

Technology accessories inc. uses a job order cost system to accumulate cost for the ileather are as follows:

Leather- $10.00

Velvet- 5.00

packaging. .40

Total. $15.40

The actual production process for the I leather is fairly straightforward. First, leather is brought to a cutting and stitching machine. The machine cuts the leather and stitches and exterior edge into the product. The machine requires one hour per 125 I leathers.

After the eye leather is cut and stitched, it is brought to assembly, we are assembly personnel to fix the velvet interior and pack the eye leather for shipping. The direct labor cost for this work is $.50 per unit.

after the eye leather is cut and stitched, it is brought to assembly, we are assembly personnel to fix the velvet interior and pack the eye leather for shipping. The direct labor cost for this work is $.50 per unit.

The completed packages are then sold to retail outlets through a salesforce. The salesforce is compensated by a 20% commission on the wholesale price for all sales.

total completed production was 500,000 units during the year. Other information is as follows:

Number of I leather units sold in 2013- 460,000

Wholesale price per unit. $40

factory overhead cost is applied to jobs at the rate of $1250 per machine hour. There were an additional 22,000 cut and stitch leather is waiting to be assembled in December 31, 2013.

1.Prepare an annual income statement for the eye leather products, including supporting calculations, from the information provided.

prepare an annual income statement for the eye leather products, including supporting calculations, from the information provided.

2. determine the balances in the finished goods and work in process inventory for the I love the product on December 31, 2013.

Answer 1