Skylight Company is a manufacturer of computers

Skylight Company is a manufacturer of computers


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Question #1 (20%) Skylight Company is a manufacturer of computers. The company has enough orders for the monthly production

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Question #1 (20%)

Skylight Company is a manufacturer of computers. The company has enough orders for the monthly production of 1,000 computers. The company management provide you with the monthly manufacturing information data as follows:

Plant manger’s salary$8,000

Factory building maintenance cost$3,000

Advertising for computers$16,000

Sales commissions$10,000

Rent on factory building$12,000

Insurance on factory building$6,000

Depreciation on factory building$1,400

Raw materials$40,000

Factory utilities$1,600

Supplies for Administrative office$400

Wages for factory workers$108,000

Depreciation on office equipment$1,000

Miscellaneous factory materials (thread, glue, etc.,)$4,000


Identify cost items and compute the following costs:

a. Product Costs
b. Period cost
























Question #2 (20%)

Jay Williams Company, a manufacturer of soccer ball provide you with the following data for the month of January, 2016:

Raw materials purchased$96,400

Repairs on factory building$1,400

Property taxes paid on factory$9,600

Factory manager’s salary$29,000

Office utilities expense$8,650

Factory utilities$27,600

Depreciation on factory machinery$16,000

Factory insurance$4,600

Indirect labor$24,460

Direct labor$149,250


Sales discounts$4,200


Accounts receivable$27,000


Work in process- Inventory       1/1/2016$19,800

Work in process- Inventory       1/31/2016               $18,600

Finished goods- Inventory           1/1/2016$96,000

Finished goods- Inventory           1/31/2016$95,900

Raw materials- Inventory1/1/2016$39,600

Raw materials- Inventory1/31/2016$48,000



a. Prepare the schedule Cost of Goods Manufactured
b. Compute the gross profit only (Hint: “Must compute cost of goods sold” to start with)
c. Prepare the “current asset” section of the balance sheet as at 1/31/2016














Question #3 (15%)

Sunshine computers has the following information available for December 2016:

Unit selling price of laptop$400

Unit variable costs$270

Total fixed costs$104,000

Units sold1,240



a. Prepare  a Cost Volume Profit (CVP) schedule that shows the Net income
b. Compute Sunshine break-even point sales units
c. Compute Sunshine break-even sales dollar









Question #4 (15%)

The management of Hardwood Flooring has collected some data showing the monthly expense to better understand its maintenance cost behavior.

MonthEquipment hoursTotal Cost









a. Using the high-low method, determine the variable cost per unit
b. Using the high-low method, determine the fixed cost per unit













Question #5 (15%)

Solar Energy Company manufactures solar panel for energy efficient homes. The company wanted to maintain inventory at 30% of the following month’s expected sales unit. At the beginning of the year the company had 20,000 units on hand, based on the following projected sales for each quarter:

First Quarter50,000

Second Quarter62,500

Third Quarter45,000

Fourth Quarter55,000



Prepare a schedule of production budget for first quarter through third quarter












Problem #6 (15%)

Energy electrical Company anticipate that its 2016 budgeted sales as follows:

January $200,000




Sales are 40% cash and 60% credit (accounts receivable). The company expect 10% cash collection in the month of sale, 50% in the month following sale, and 36% in the second month following sale and 4% are uncollectible.


a. Prepare schedule of cash collections for each month
b. What is the total cash collected for all three months?

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