problems chapter 2
DESCRIPTION
Cost accountingTRANSCRIPT
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Chapter 2Assigned Problems
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P2-14Staci Valek began dabbling in pottery several years ago as a hobby. Then she decided to quit her job and manufacture pottery full time. The salary of Stacis job is $3.800 per monthStaci will rent a small building to use as manufacturing space for $500 per month.The cost of clay and glaze will be $2 each per pottery.She will hire workers at a labor rate of $8 per pot.Advertising will cost $600 per month.Tracis brother will be the sales representative and be paid $4 for each pot sold. Manufacturing equipment will be rented at a monthly fee of $300The costs of legal and similar fees for incorporating the business has already been paid and is $500. A sales office can be rented for $250 per monthThe phone to be installed to take orders will cost $40 per monthStaci has some money in the bank account that earns $1.200 per year. That money will be withdrawn if the pottery business is activated.
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Sheet1
Product Cost
CostVariableFixedDirect MaterialDirect LaborMfg. OverheadPeriod CostOpport. CostSunk CostDiffer. Cost
Present Salary
Mfg. Building Rent
Cost of clay
Labor rate
Advertising
Sales commission
Equipment rent
Legal fees
Office rent
Phone cost
Interest income
Sheet2
Sheet3
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Sheet1
Product Cost
CostVariableFixedDirect MaterialDirect LaborMfg. OverheadPeriod CostOpport. CostSunk CostDiffer. Cost
Present SalaryX
Mfg. Building RentXXX
Cost of clayXXX
Labor rateXXX
AdvertisingXXX
Sales commissionXXX
Equipment rentXXX
Legal feesXXX
Office rentXXX
Phone costXXX
Interest incomeX
Sheet2
Sheet3
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Cost and sales data for Meriwell is given below:P2-26
Sheet1
Product Cost
CostVariableFixedDirect MaterialDirect LaborMfg. OverheadPeriod CostOpport. CostSunk CostDiffer. Cost
Present SalaryX
Mfg. Building RentXXX
Cost of clayXXX
Labor rateXXX
AdvertisingXXX
Sales commissionXXX
Equipment rentXXX
Legal feesXXX
Office rentXXX
Phone costXXX
Interest incomeX
Sheet2
Finished goods, beginning inventory20,000
Finished goods, ending inventory40,000
Depreciation, factory27,000
Administration expenses110,000
Utilities, factory8,000
Maintanance factory40,000
Supplies, factory11,000
Insurance, factory4,000
Purchases of raw materials125,000
Raw Materials, beginning inventory9,000
Raw Materials, ending inventory6,000
Direct Labor70,000
Indirect Labor15,000
Work-in process, beginning inventory17,000
Work-in process, ending inventory30,000
Sales500,000
Selling Expenses80,000
Sheet3
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How much is the total manufacturing costs for the period?How much is the cost of goods manufactured?How much is period expenses?Assume that the company produced the equivalent of 10.000 units during the period, what was the average cost for direct materials and factory depreciation (assume straight line method) per units produced?If 15.000 units are to be produced next year, how much would the total direct materials and factory depreciation be?As the manager responsible for production costs, explain to the president ant difference in the average costs per unit between (4) and (5) above
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Sheet1
Product Cost
CostVariableFixedDirect MaterialDirect LaborMfg. OverheadPeriod CostOpport. CostSunk CostDiffer. Cost
Present SalaryX
Mfg. Building RentXXX
Cost of clayXXX
Labor rateXXX
AdvertisingXXX
Sales commissionXXX
Equipment rentXXX
Legal feesXXX
Office rentXXX
Phone costXXX
Interest incomeX
Sheet2
Finished goods, beginning inventory20,000
Finished goods, ending inventory40,000
Depreciation, factory27,000
Administration expenses110,000
Utilities, factory8,000
Maintanance factory40,000
Supplies, factory11,000
Insurance, factory4,000
Purchases of raw materials125,000
Raw Materials, beginning inventory9,000
Raw Materials, ending inventory6,000
Direct Labor70,000
Indirect Labor15,000
Work-in process, beginning inventory17,000
Work-in process, ending inventory30,000
Sales500,000
Selling Expenses80,000
Direct Materials128,000
Raw Materials, beginning inventory9,000
Purchases of raw materials125,000
Raw Materials available for use134,000
Raw Materials, ending inventory6,000
Raw materials used in production128,000
Direct Labor70,000
Manufacturing Overhead105,000
Total Manufacturing Costs303,000
Work-in process, beginning inventory17,000
Work-in process, ending inventory30,000
Cost of Goods Manufactured290,000
Finished goods, beginning inventory20,000
Finished goods, ending inventory40,000
Cost of Goods Sold270,000
Selling and Administrative Costs190,000
Sheet3
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Sheet1
Product Cost
CostVariableFixedDirect MaterialDirect LaborMfg. OverheadPeriod CostOpport. CostSunk CostDiffer. Cost
Present SalaryX
Mfg. Building RentXXX
Cost of clayXXX
Labor rateXXX
AdvertisingXXX
Sales commissionXXX
Equipment rentXXX
Legal feesXXX
Office rentXXX
Phone costXXX
Interest incomeX
Sheet2
Finished goods, beginning inventory20,000
Finished goods, ending inventory40,000
Depreciation, factory27,000
Administration expenses110,000
Utilities, factory8,000
Maintanance factory40,000
Supplies, factory11,000
Insurance, factory4,000
Purchases of raw materials125,000
Raw Materials, beginning inventory9,000
Raw Materials, ending inventory6,000
Direct Labor70,000
Indirect Labor15,000
Work-in process, beginning inventory17,000
Work-in process, ending inventory30,000
Sales500,000
Selling Expenses80,000
Direct Materials128,000
Raw Materials, beginning inventory9,000
Purchases of raw materials125,000
Raw Materials available for use134,000
Raw Materials, ending inventory6,000
Raw materials used in production128,000
Direct Labor70,000
Manufacturing Overhead105,000
Total Manufacturing Costs303,000
Work-in process, beginning inventory17,000
Work-in process, ending inventory30,000
Cost of Goods Manufactured290,000
Finished goods, beginning inventory20,000
Finished goods, ending inventory40,000
Cost of Goods Sold270,000
Selling and Administrative Costs190,000
Direct Materials per Unit12.80
Depreciation per Unit2.70
Sheet3
Sheet1
Product Cost
CostVariableFixedDirect MaterialDirect LaborMfg. OverheadPeriod CostOpport. CostSunk CostDiffer. Cost
Present SalaryX
Mfg. Building RentXXX
Cost of clayXXX
Labor rateXXX
AdvertisingXXX
Sales commissionXXX
Equipment rentXXX
Legal feesXXX
Office rentXXX
Phone costXXX
Interest incomeX
Sheet2
Finished goods, beginning inventory20,000
Finished goods, ending inventory40,000
Depreciation, factory27,000
Administration expenses110,000
Utilities, factory8,000
Maintanance factory40,000
Supplies, factory11,000
Insurance, factory4,000
Purchases of raw materials125,000
Raw Materials, beginning inventory9,000
Raw Materials, ending inventory6,000
Direct Labor70,000
Indirect Labor15,000
Work-in process, beginning inventory17,000
Work-in process, ending inventory30,000
Sales500,000
Selling Expenses80,000
Direct Materials128,000
Raw Materials, beginning inventory9,000
Purchases of raw materials125,000
Raw Materials available for use134,000
Raw Materials, ending inventory6,000
Raw materials used in production128,000
Direct Labor70,000
Manufacturing Overhead105,000
Total Manufacturing Costs303,000
Work-in process, beginning inventory17,000
Work-in process, ending inventory30,000
Cost of Goods Manufactured290,000
Finished goods, beginning inventory20,000
Finished goods, ending inventory40,000
Cost of Goods Sold270,000
Selling and Administrative Costs190,000
Direct Materials per Unit12.80
Depreciation per Unit2.70
Direct Materials per Unit12.80192,000
Depreciation per Unit1.8027,000
Sheet3
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Problem 2-27
SP02-26
Student Name:Instructor
Class:McGraw-Hill/Irwin
Problem 02-26
MERIWELL COMPANY
Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning$9,000
Add: Purchases of raw materials125,000
Raw materials available for use134,000
Deduct: Raw materials inventory, ending6,000
Raw materials used in production$128,000
Direct labor70,000
Manufacturing overhead:
Depreciation, factory27,000
Utilities, factory8,000
Maintenance, factory40,000
Supplies, factory11,000
Insurance, factory4,000
Indirect labor15,000
Total overhead costs105,000
Total manufacturing costs303,000
Add: Work in process inventory, beginning17,000
320,000
Deduct: Work in process inventory, ending30,000
Cost of goods manufactured$290,000
MERIWELL COMPANY
Income Statement
Sales$500,000
Less cost of goods sold:
Finished goods inventory, beginning$20,000
Add: Cost of goods manufactured290,000
Goods available for sale310,000
Deduct: Finished goods inventory, ending40,000270,000
Gross margin230,000
Less operating expenses:
Selling expenses80,000
Administrative expenses110,000190,000
Net operating income$40,000
3. Equivalent units of product produced10,000
Average cost per unit for direct materials$12.80
Average cost per unit for factory depreciation2.70
4. Equivalent units of product produced15,000
Average cost per unit for direct materials$12.80
Total cost for direct materials192,000
Average cost per unit for factory depreciation1.80
Total cost for factory depreciation27,000
Enter appropriate data in the yellow cells. Your entries will be verified.
Enter appropriate data in the yellow cells. Your entries will be verified.
Enter the appropriate formula in the yellow cells. Your answer will be verified.
Enter the appropriate formula in the yellow cells. Your answer will be verified.
Given SP02-26
Given Data SP02-26
MERIWELL COMPANY
Finished goods inventory, beginning$20,000
Finished goods inventory, ending40,000
Depreciation, factory27,000
Administrative expenses110,000
Utilities, factory8,000
Maintenance, factory40,000
Supplies, factory11,000
Insurance, factory4,000
Purchase of raw materials125,000
Raw materials inventory, beginning9,000
Raw materials inventory, ending6,000
Diredt labor70,000
Indirect labor15,000
Work in process inventory, beginning17,000
Work in process inventory, ending30,000
Sales500,000
Selling Expenses80,000
Check figure:
(1) Cost of goods manufactured$290,000
SP02-25
Student Name:Instructor
Class:McGraw-Hill/Irwin
Problem 02-25
SWIFT COMPANY
Schedule of Cost of Goods Manufactured
For the Month Ended August 31
Direct materials:
Raw materials inventory, August 1$8,000
Add: Purchases of raw materials165,000
Raw materials available for use173,000
Deduct: Raw materials inventory, August 3113,000
Raw materials used in production$160,000
Direct labor70,000
Manufacturing overhead:
Indirect labor cost12,000
Utilities9,000
Depreciation, factory equipment21,000
Insurance3,000
Rent on facilities40,000
Total overhead costs85,000
Total manufacturing costs315,000
Add: Work in process inventory, August 116,000
331,000
Deduct: Work in process inventory, August 3121,000
Cost of goods manufactured$310,000
SWIFT COMPANY
Income Statement
For the Month Ended August 31
Sales$450,000
Less cost of goods sold:
Finished goods inventory, August 1$40,000
Add: Cost of goods manufactured310,000
Goods available for sale350,000
Deduct: Finished goods inventory, August 3160,000290,000
Gross margin160,000
Less operating expenses:
Utilities6,000
Depreciation, sales equipment18,000
Insurance1,000
Rent on facilities10,000
Selling and administrative salaries32,000
Advertising75,000142,000
Net operating income$18,000
Enter appropriate data in the yellow cells. Your entries will be verified.
Enter appropriate data in the yellow cells. Your entries will be verified.
Given SP02-25
Given Data SP02-25:
SWIFT COMPANY
Income Statement
For the Month Ended August 31
Sales$450,000
Less operating expenses:
Indirect labor cost$12,000
Utilities15,000
Direct labor cost70,000
Depreciation, factory equipment21,000
Raw materials purchased165,000
Depreciation, sales equipment18,000
Insurance4,000
Rent on facilities50,000
Selling and administrative salaries32,000
Advertising75,000462,000
Net loss($12,000)
Inventory balances:
August 1August 31
Raw materials$8,000$13,000
Work in process$16,000$21,000
Finished goods$40,000$60,000
Rent applied to factory overhead80%
Rent applied to selling and admin.20%
Insurance applied to factory overhead75%
Insurance applied to selling and admin.25%
Utilities applied to factory overhead60%
Utilities applied to selling and admin.40%
Check figure:
(1) Cost of goods manufactured$310,000
SP02-27
Student Name:Instructor
Class:McGraw-Hill/Irwin
Problem 02-27
VISIC CORPORATION
Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning$20,000
Add: Purchases of raw materials480,000
Raw materials available for use500,000
Deduct: Raw materials inventory, ending30,000
Raw materials used in production$470,000
Direct labor90,000
Manufacturing overhead:
Indirect labor85,000
Building rent32,000
Utilities, factory108,000
Royalty on patent43,500
Maintenance, factory9,000
Rent on equipment15,700
Other factory overhead costs6,800
Total overhead costs300,000
Total manufacturing costs860,000
Add: Work in process inventory, beginning50,000
910,000
Deduct: Work in process inventory, ending40,000
Cost of goods manufactured$870,000
Correct!
VISIC CORPORATION
Computations
2.a. Units in finished goods inventory
Total sales$1,300,000
Unit selling price$50
Units sold26,000
Units in the finished goods inventory, beginning0
Units produced during the year29,000
Units available for sale29,000
Units sold during the year26,000
Units in the finished goods inventory, ending3,000Correct!
2.b. Cost of units in finished goods inventory
COGM$870,000
Number of units produced29,000
Cost per unit$30
Cost of units in finished goods inventory, ending$90,000Correct!
VISIC CORPORATION
Income Statement
Sales$1,300,000
Less cost of goods sold:
Finished goods inventory, beginning$0
Add: Cost of goods manufactured870,000
Goods available for sale870,000
Finished goods inventory, ending90,000780,000
Gross margin520,000
Less operating expenses:
Advertising105,000
Entertainment and travel40,000
Building rent8,000
Selling and administrative salaries210,000
Other selling and administrative expense17,000380,000
Net operating income$140,000
Correct!
Enter appropriate data in the yellow cells. Your result for "Cost of goods manufactured" will be verified.
Enter appropriate data in the yellow cells. Your final results for parts a. and b. will be verified.
Enter appropriate data in the yellow cells. Your result for "Net operating income" will be verified.
Given SP02-27
Given Data SP02-27:
VISIC CORPORATION
Production in units$29,000
Sales in units?
Ending finished goods inventory in units?
Sales in dollars$1,300,000
Costs:
Advertising$105,000
Entertainment and travel$40,000
Direct labor$90,000
Indirect labor$85,000
Raw materials purchased$480,000
Building rent (production uses 80% of the space;
administrative and sales offices use the rest)$40,000
Utilities, factory$108,000
Royalty paid for use of production patent, $1.50
per unit produced?
Maintenance, factory$9,000
Rent for special production equipment, $7,000 per
year plus $0.30 per unit produced?
Selling and administrative salaries$210,000
Other factory overhead costs$6,800
Other selling and administrative expenses$17,000
Inventories:BeginningEnd of
of the YeartheYear
Raw materials$20,000$30,000
Work in process$50,000$40,000
Finished goods$0?
Selling price per unit$50
Check figure:
(1) Cost of goods manufactured$870,000
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SP02-26
Student Name:Instructor
Class:McGraw-Hill/Irwin
Problem 02-26
MERIWELL COMPANY
Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning$9,000
Add: Purchases of raw materials125,000
Raw materials available for use134,000
Deduct: Raw materials inventory, ending6,000
Raw materials used in production$128,000
Direct labor70,000
Manufacturing overhead:
Depreciation, factory27,000
Utilities, factory8,000
Maintenance, factory40,000
Supplies, factory11,000
Insurance, factory4,000
Indirect labor15,000
Total overhead costs105,000
Total manufacturing costs303,000
Add: Work in process inventory, beginning17,000
320,000
Deduct: Work in process inventory, ending30,000
Cost of goods manufactured$290,000
MERIWELL COMPANY
Income Statement
Sales$500,000
Less cost of goods sold:
Finished goods inventory, beginning$20,000
Add: Cost of goods manufactured290,000
Goods available for sale310,000
Deduct: Finished goods inventory, ending40,000270,000
Gross margin230,000
Less operating expenses:
Selling expenses80,000
Administrative expenses110,000190,000
Net operating income$40,000
3. Equivalent units of product produced10,000
Average cost per unit for direct materials$12.80
Average cost per unit for factory depreciation2.70
4. Equivalent units of product produced15,000
Average cost per unit for direct materials$12.80
Total cost for direct materials192,000
Average cost per unit for factory depreciation1.80
Total cost for factory depreciation27,000
Enter appropriate data in the yellow cells. Your entries will be verified.
Enter appropriate data in the yellow cells. Your entries will be verified.
Enter the appropriate formula in the yellow cells. Your answer will be verified.
Enter the appropriate formula in the yellow cells. Your answer will be verified.
Given SP02-26
Given Data SP02-26
MERIWELL COMPANY
Finished goods inventory, beginning$20,000
Finished goods inventory, ending40,000
Depreciation, factory27,000
Administrative expenses110,000
Utilities, factory8,000
Maintenance, factory40,000
Supplies, factory11,000
Insurance, factory4,000
Purchase of raw materials125,000
Raw materials inventory, beginning9,000
Raw materials inventory, ending6,000
Diredt labor70,000
Indirect labor15,000
Work in process inventory, beginning17,000
Work in process inventory, ending30,000
Sales500,000
Selling Expenses80,000
Check figure:
(1) Cost of goods manufactured$290,000
SP02-25
Student Name:Instructor
Class:McGraw-Hill/Irwin
Problem 02-25
SWIFT COMPANY
Schedule of Cost of Goods Manufactured
For the Month Ended August 31
Direct materials:
Raw materials inventory, August 1$8,000
Add: Purchases of raw materials165,000
Raw materials available for use173,000
Deduct: Raw materials inventory, August 3113,000
Raw materials used in production$160,000
Direct labor70,000
Manufacturing overhead:
Indirect labor cost12,000
Utilities9,000
Depreciation, factory equipment21,000
Insurance3,000
Rent on facilities40,000
Total overhead costs85,000
Total manufacturing costs315,000
Add: Work in process inventory, August 116,000
331,000
Deduct: Work in process inventory, August 3121,000
Cost of goods manufactured$310,000
SWIFT COMPANY
Income Statement
For the Month Ended August 31
Sales$450,000
Less cost of goods sold:
Finished goods inventory, August 1$40,000
Add: Cost of goods manufactured310,000
Goods available for sale350,000
Deduct: Finished goods inventory, August 3160,000290,000
Gross margin160,000
Less operating expenses:
Utilities6,000
Depreciation, sales equipment18,000
Insurance1,000
Rent on facilities10,000
Selling and administrative salaries32,000
Advertising75,000142,000
Net operating income$18,000
Enter appropriate data in the yellow cells. Your entries will be verified.
Enter appropriate data in the yellow cells. Your entries will be verified.
Given SP02-25
Given Data SP02-25:
SWIFT COMPANY
Income Statement
For the Month Ended August 31
Sales$450,000
Less operating expenses:
Indirect labor cost$12,000
Utilities15,000
Direct labor cost70,000
Depreciation, factory equipment21,000
Raw materials purchased165,000
Depreciation, sales equipment18,000
Insurance4,000
Rent on facilities50,000
Selling and administrative salaries32,000
Advertising75,000462,000
Net loss($12,000)
Inventory balances:
August 1August 31
Raw materials$8,000$13,000
Work in process$16,000$21,000
Finished goods$40,000$60,000
Rent applied to factory overhead80%
Rent applied to selling and admin.20%
Insurance applied to factory overhead75%
Insurance applied to selling and admin.25%
Utilities applied to factory overhead60%
Utilities applied to selling and admin.40%
Check figure:
(1) Cost of goods manufactured$310,000
SP02-27
Student Name:Instructor
Class:McGraw-Hill/Irwin
Problem 02-27
VISIC CORPORATION
Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning$20,000
Add: Purchases of raw materials480,000
Raw materials available for use500,000
Deduct: Raw materials inventory, ending30,000
Raw materials used in production$470,000
Direct labor90,000
Manufacturing overhead:
Indirect labor85,000
Building rent32,000
Utilities, factory108,000
Royalty on patent43,500
Maintenance, factory9,000
Rent on equipment15,700
Other factory overhead costs6,800
Total overhead costs300,000
Total manufacturing costs860,000
Add: Work in process inventory, beginning50,000
910,000
Deduct: Work in process inventory, ending40,000
Cost of goods manufactured$870,000
Correct!
VISIC CORPORATION
Computations
2.a. Units in finished goods inventory
Total sales$1,300,000
Unit selling price$50
Units sold26,000
Units in the finished goods inventory, beginning0
Units produced during the year29,000
Units available for sale29,000
Units sold during the year26,000
Units in the finished goods inventory, ending3,000Correct!
2.b. Cost of units in finished goods inventory
COGM$870,000
Number of units produced29,000
Cost per unit$30
Cost of units in finished goods inventory, ending$90,000Correct!
VISIC CORPORATION
Income Statement
Sales$1,300,000
Less cost of goods sold:
Finished goods inventory, beginning$0
Add: Cost of goods manufactured870,000
Goods available for sale870,000
Finished goods inventory, ending90,000780,000
Gross margin520,000
Less operating expenses:
Advertising105,000
Entertainment and travel40,000
Building rent8,000
Selling and administrative salaries210,000
Other selling and administrative expense17,000380,000
Net operating income$140,000
Correct!
Enter appropriate data in the yellow cells. Your result for "Cost of goods manufactured" will be verified.
Enter appropriate data in the yellow cells. Your final results for parts a. and b. will be verified.
Enter appropriate data in the yellow cells. Your result for "Net operating income" will be verified.
Given SP02-27
Given Data SP02-27:
VISIC CORPORATION
Production in units$29,000
Sales in units?
Ending finished goods inventory in units?
Sales in dollars$1,300,000
Costs:
Advertising$105,000
Entertainment and travel$40,000
Direct labor$90,000
Indirect labor$85,000
Raw materials purchased$480,000
Building rent (production uses 80% of the space;
administrative and sales offices use the rest)$40,000
Utilities, factory$108,000
Royalty paid for use of production patent, $1.50
per unit produced?
Maintenance, factory$9,000
Rent for special production equipment, $7,000 per
year plus $0.30 per unit produced?
Selling and administrative salaries$210,000
Other factory overhead costs$6,800
Other selling and administrative expenses$17,000
Inventories:BeginningEnd of
of the YeartheYear
Raw materials$20,000$30,000
Work in process$50,000$40,000
Finished goods$0?
Selling price per unit$50
Check figure:
(1) Cost of goods manufactured$870,000
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SP02-26
Student Name:Instructor
Class:McGraw-Hill/Irwin
Problem 02-26
MERIWELL COMPANY
Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning$9,000
Add: Purchases of raw materials125,000
Raw materials available for use134,000
Deduct: Raw materials inventory, ending6,000
Raw materials used in production$128,000
Direct labor70,000
Manufacturing overhead:
Depreciation, factory27,000
Utilities, factory8,000
Maintenance, factory40,000
Supplies, factory11,000
Insurance, factory4,000
Indirect labor15,000
Total overhead costs105,000
Total manufacturing costs303,000
Add: Work in process inventory, beginning17,000
320,000
Deduct: Work in process inventory, ending30,000
Cost of goods manufactured$290,000
MERIWELL COMPANY
Income Statement
Sales$500,000
Less cost of goods sold:
Finished goods inventory, beginning$20,000
Add: Cost of goods manufactured290,000
Goods available for sale310,000
Deduct: Finished goods inventory, ending40,000270,000
Gross margin230,000
Less operating expenses:
Selling expenses80,000
Administrative expenses110,000190,000
Net operating income$40,000
3. Equivalent units of product produced10,000
Average cost per unit for direct materials$12.80
Average cost per unit for factory depreciation2.70
4. Equivalent units of product produced15,000
Average cost per unit for direct materials$12.80
Total cost for direct materials192,000
Average cost per unit for factory depreciation1.80
Total cost for factory depreciation27,000
Enter appropriate data in the yellow cells. Your entries will be verified.
Enter appropriate data in the yellow cells. Your entries will be verified.
Enter the appropriate formula in the yellow cells. Your answer will be verified.
Enter the appropriate formula in the yellow cells. Your answer will be verified.
Given SP02-26
Given Data SP02-26
MERIWELL COMPANY
Finished goods inventory, beginning$20,000
Finished goods inventory, ending40,000
Depreciation, factory27,000
Administrative expenses110,000
Utilities, factory8,000
Maintenance, factory40,000
Supplies, factory11,000
Insurance, factory4,000
Purchase of raw materials125,000
Raw materials inventory, beginning9,000
Raw materials inventory, ending6,000
Diredt labor70,000
Indirect labor15,000
Work in process inventory, beginning17,000
Work in process inventory, ending30,000
Sales500,000
Selling Expenses80,000
Check figure:
(1) Cost of goods manufactured$290,000
SP02-25
Student Name:Instructor
Class:McGraw-Hill/Irwin
Problem 02-25
SWIFT COMPANY
Schedule of Cost of Goods Manufactured
For the Month Ended August 31
Direct materials:
Raw materials inventory, August 1$8,000
Add: Purchases of raw materials165,000
Raw materials available for use173,000
Deduct: Raw materials inventory, August 3113,000
Raw materials used in production$160,000
Direct labor70,000
Manufacturing overhead:
Indirect labor cost12,000
Utilities9,000
Depreciation, factory equipment21,000
Insurance3,000
Rent on facilities40,000
Total overhead costs85,000
Total manufacturing costs315,000
Add: Work in process inventory, August 116,000
331,000
Deduct: Work in process inventory, August 3121,000
Cost of goods manufactured$310,000
SWIFT COMPANY
Income Statement
For the Month Ended August 31
Sales$450,000
Less cost of goods sold:
Finished goods inventory, August 1$40,000
Add: Cost of goods manufactured310,000
Goods available for sale350,000
Deduct: Finished goods inventory, August 3160,000290,000
Gross margin160,000
Less operating expenses:
Utilities6,000
Depreciation, sales equipment18,000
Insurance1,000
Rent on facilities10,000
Selling and administrative salaries32,000
Advertising75,000142,000
Net operating income$18,000
Enter appropriate data in the yellow cells. Your entries will be verified.
Enter appropriate data in the yellow cells. Your entries will be verified.
Given SP02-25
Given Data SP02-25:
SWIFT COMPANY
Income Statement
For the Month Ended August 31
Sales$450,000
Less operating expenses:
Indirect labor cost$12,000
Utilities15,000
Direct labor cost70,000
Depreciation, factory equipment21,000
Raw materials purchased165,000
Depreciation, sales equipment18,000
Insurance4,000
Rent on facilities50,000
Selling and administrative salaries32,000
Advertising75,000462,000
Net loss($12,000)
Inventory balances:
August 1August 31
Raw materials$8,000$13,000
Work in process$16,000$21,000
Finished goods$40,000$60,000
Rent applied to factory overhead80%
Rent applied to selling and admin.20%
Insurance applied to factory overhead75%
Insurance applied to selling and admin.25%
Utilities applied to factory overhead60%
Utilities applied to selling and admin.40%
Check figure:
(1) Cost of goods manufactured$310,000
SP02-27
Student Name:Instructor
Class:McGraw-Hill/Irwin
Problem 02-27
VISIC CORPORATION
Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning$20,000
Add: Purchases of raw materials480,000
Raw materials available for use500,000
Deduct: Raw materials inventory, ending30,000
Raw materials used in production$470,000
Direct labor90,000
Manufacturing overhead:
Indirect labor85,000
Building rent32,000
Utilities, factory108,000
Royalty on patent43,500
Maintenance, factory9,000
Rent on equipment15,700
Other factory overhead costs6,800
Total overhead costs300,000
Total manufacturing costs860,000
Add: Work in process inventory, beginning50,000
910,000
Deduct: Work in process inventory, ending40,000
Cost of goods manufactured$870,000
Correct!
VISIC CORPORATION
Computations
2.a. Units in finished goods inventory
Total sales$1,300,000
Unit selling price$50
Units sold26,000
Units in the finished goods inventory, beginning0
Units produced during the year29,000
Units available for sale29,000
Units sold during the year26,000
Units in the finished goods inventory, ending3,000Correct!
2.b. Cost of units in finished goods inventory
COGM$870,000
Number of units produced29,000
Cost per unit$30
Cost of units in finished goods inventory, ending$90,000Correct!
VISIC CORPORATION
Income Statement
Sales$1,300,000
Less cost of goods sold:
Finished goods inventory, beginning$0
Add: Cost of goods manufactured870,000
Goods available for sale870,000
Finished goods inventory, ending90,000780,000
Gross margin520,000
Less operating expenses:
Advertising105,000
Entertainment and travel40,000
Building rent8,000
Selling and administrative salaries210,000
Other selling and administrative expense17,000380,000
Net operating income$140,000
Correct!
Enter appropriate data in the yellow cells. Your result for "Cost of goods manufactured" will be verified.
Enter appropriate data in the yellow cells. Your final results for parts a. and b. will be verified.
Enter appropriate data in the yellow cells. Your result for "Net operating income" will be verified.
Given SP02-27
Given Data SP02-27:
VISIC CORPORATION
Production in units$29,000
Sales in units?
Ending finished goods inventory in units?
Sales in dollars$1,300,000
Costs:
Advertising$105,000
Entertainment and travel$40,000
Direct labor$90,000
Indirect labor$85,000
Raw materials purchased$480,000
Building rent (production uses 80% of the space;
administrative and sales offices use the rest)$40,000
Utilities, factory$108,000
Royalty paid for use of production patent, $1.50
per unit produced?
Maintenance, factory$9,000
Rent for special production equipment, $7,000 per
year plus $0.30 per unit produced?
Selling and administrative salaries$210,000
Other factory overhead costs$6,800
Other selling and administrative expenses$17,000
Inventories:BeginningEnd of
of the YeartheYear
Raw materials$20,000$30,000
Work in process$50,000$40,000
Finished goods$0?
Selling price per unit$50
Check figure:
(1) Cost of goods manufactured$870,000