181
Required:
1. Record the above transactions in the worksheet that appears below. Because of the width of the
worksheet, it is in two parts. In your text, these two parts would be joined side-by-side to make one
very wide worksheet. The beginning balances have been provided for each of the accounts,
including the Property, Plant, and Equipment (net) account which is abbreviated as PP&E (net).
Cash
Raw Materials
Work in
Process
Finished
Goods
PP&E (net)
=
1/1
$1,090,000
$28,050
$0
$86,395
$498,300
=
a.
=
b.
=
c.
=
d.
=
e.
=
f.
=
g.
=
h.
=
i.
=
12/31
=
=
Materials
Quantity
Variance
Labor
Efficiency
Variance
Retained
Earnings
1/1
$0
$0
$1,702,745
a.
b.
c.
d.
e.
f.
g.
h.
i.
12/31
2. Determine the ending balance (e.g., 12/31 balance) in each account.
182
183
184
131) Siciliano Corporation manufactures one product. The company uses a standard cost system in
which inventories are recorded at their standard costs. There is no variable manufacturing
overhead. The standard cost card for the company’s only product is as follows:
Inputs
Standard Quantity
or Hours
Standard Price
or Rate
Standard
Cost
Direct materials
1.5
kilos
$5.00
per kilo
$7.50
Direct labor
0.60
hours
$20.00
per hour
12.00
Fixed manufacturing overhead
0.60
hours
$3.50
per hour
2.10
Total standard cost per unit
$21.60
During the year, the company completed the following transactions concerning raw materials:
a. Purchased 34,800 kilos of raw material at a price of $4.60 per kilo.
b. Used 32,750 kilos of the raw material to produce 21,900 units of work in process.
Required:
Record the above transactions in the worksheet that appears below. Because of the width of the
worksheet, it is in two parts. In your text, these two parts would be joined side-by-side to make one
very wide worksheet. The beginning balances have been provided for each of the accounts,
including the Property, Plant, and Equipment (net) account which is abbreviated as PP&E (net).
Cash
Raw
Materials
Work in
Process
Finished
Goods
PP&E (net)
=
1/1
$1,010,000
$57,000
$0
$56,160
$574,100
=
a.
=
b.
=
Materials
Quantity
Variance
Labor
Efficiency
Variance
Retained
Earnings
1/1
$0
$0
$1,697,260
a.
b.
186
132) Dobrowolski Corporation manufactures one product. It does not maintain any beginning or
ending Work in Process inventories. The company uses a standard cost system in which products
are recorded at their standard cost and any variances are closed directly to Cost of Goods Sold.
There is no variable manufacturing overhead. The standard cost card for the company’s only
product is as follows:
Inputs
Standard Quantity
or Hours
Standard Price
or Rate
Standard
Cost
Direct materials
1.8
kilos
$7.00
per kilo
$12.60
Direct labor
0.50
hours
$21.50
per hour
10.75
Fixed manufacturing overhead
0.50
hours
$7.50
per hour
3.75
Total standard cost per unit
$27.10
The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing
overhead of $75,000 and budgeted activity of 10,000 hours.
During the year, the company applied fixed overhead to the 12,900 units in work in process
inventory using the predetermined overhead rate multiplied by the number of direct labor-hours
allowed. Actual fixed overhead costs for the year were $62,600. Of this total, -$3,400 related to
items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $66,000
related to depreciation of manufacturing equipment.
Required:
Completely record the transactions involving fixed overhead, including any variances, in the
worksheet that appears below. Because of the width of the worksheet, it is in two parts. In your
text, these two parts would be joined side-by-side to make one very wide worksheet. The
beginning balances have been provided for each of the accounts, including the Property, Plant, and
Equipment (net) account which is abbreviated as PP&E (net).
Cash
Raw
Materials
Work in
Process
Finished
Goods
PP&E (net)
=
1/1
$1,120,000
$36,540
$0
$62,330
$655,000
=
=
=
=
Materials
Price
Variance
Materials
Quantity
Variance
Labor Rate
Variance
Labor
Efficiency
Variance
FOH Budget
Variance
FOH
Volume
Variance
Retained
Earnings
1/1
$0
$0
$0
$0
$0
$0
$1,873,870
188
133) Trundle Corporation manufactures one product. The company uses a standard cost system in
which inventories are recorded at their standard costs. There is no variable manufacturing
overhead. The standard cost card for the company’s only product is as follows:
Inputs
Standard Quantity
or Hours
Standard Price
or Rate
Standard
Cost
Direct materials
2.6
pounds
$8.00
per pound
$20.80
Direct labor
0.70
hours
$21.50
per hour
15.05
Fixed manufacturing overhead
0.70
hours
$14.50
per hour
10.15
Total standard cost per unit
$46.00
During the year, the company completed the following transactions concerning raw materials:
a. Purchased 99,100 pounds of raw material at a price of $7.90 per pound.
b. Used 89,020 pounds of the raw material to produce 34,200 units of work in process.
Required:
Record the above transactions in the worksheet that appears below. Because of the width of the
worksheet, it is in two parts. In your text, these two parts would be joined side-by-side to make one
very wide worksheet. The beginning balances have been provided for each of the accounts,
including the Property, Plant, and Equipment (net) account which is abbreviated as PP&E (net).
Cash
Raw
Materials
Work in
Process
Finished
Goods
PP&E (net)
=
1/1
$1,050,000
$56,160
$0
$64,400
$472,900
=
a.
=
b.
=
Materials
Price
Variance
Materials
Quantity
Variance
Labor Rate
Variance
Labor
Efficiency
Variance
FOH Budget
Variance
FOH
Volume
Variance
Retained
Earnings
1/1
$0
$0
$0
$0
$0
$0
$1,643,460
a.
b.
190
134) Milanese Corporation manufactures one product. It does not maintain any beginning or
ending Work in Process inventories. The company uses a standard cost system in which
inventories are recorded at their standard costs and any variances are closed directly to Cost of
Goods Sold. There is no variable manufacturing overhead. The company’s balance sheet at the
beginning of the year was as follows:
Milanese Corporation
Balance Sheet
January 1
Assets
Cash
$
1,090,000
Raw materials inventory
24,960
Finished goods inventory
78,280
Property, plant, and equipment (net)
652,600
Total assets
$
1,845,840
Liabilities and Equity
Retained earnings
$
1,845,840
Total liabilities and equity
$
1,845,840
The standard cost card for the company’s only product is as follows:
Inputs
Standard
Quantity
or Hours
Standard Price or
Rate
Standard
Cost
Direct materials
2.6
gallons
$
8.00
per gallon
$
20.80
Direct labor
0.60
hours
$
18.50
per hour
11.10
Fixed manufacturing overhead
0.60
hours
$
15.50
per hour
9.30
Total standard cost per unit
$
41.20
The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing
overhead of $186,000 and budgeted activity of 12,000 hours.
191
During the year, the company completed the following transactions:
a. Purchased 52,400 gallons of raw material at a price of $8.90 per gallon.
b. Used 46,380 gallons of the raw material to produce 17,800 units of work in process.
c. Assigned direct labor costs to work in process. The direct labor workers (who were paid in
cash) worked 11,080 hours at an average cost of $18.90 per hour.
d. Applied fixed overhead to the 17,800 units in work in process inventory using the
predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed
overhead costs for the year were $197,100. Of this total, $122,100 related to items such as
insurance, utilities, and indirect labor salaries that were all paid in cash and $75,000 related to
depreciation of manufacturing equipment.
e. Transferred 17,800 units from work in process to finished goods.
f. Sold for cash 17,700 units to customers at a price of $52.30 per unit.
g. Completed and transferred the standard cost associated with the 17,700 units sold from
finished goods to cost of goods sold.
h. Paid $53,000 of selling and administrative expenses.
i. Closed all standard cost variances to cost of goods sold.
192
Required:
1. Compute all direct materials, direct labor, and fixed overhead variances for the year.
2. Enter the beginning balances and record the above transactions in the worksheet that appears
below. Because of the width of the worksheet, it is in two parts. In your text, these two parts would
be joined side-by-side to make one very wide worksheet.
Cash
Raw
Materials
Work in
Process
Finished
Goods
PP&E (net)
=
1/1
=
a.
=
b.
=
c.
=
d.
=
e.
=
f.
=
g.
=
h.
=
i.
=
12/31
=
=
Material
Price
Variance
Material
Quantity
Variance
Labor
Rate
Variance
Labor
Effici.
Variance
FOH
Budget
Variance
FOH
Volume
Variance
Retained
Earnings
1/1
a.
b.
c.
d.
e.
f.
g.
h.
i.
12/31
3. Determine the ending balance (e.g., 12/31 balance) in each account.
193
194
196
135) Bascom Inc. manufactures one product. It does not maintain any beginning or ending
inventories. The company uses a standard cost system in which inventories are recorded at their
standard costs and any variances are closed directly to Cost of Goods Sold. Its standard cost per
unit produced is $25.75. During the year, the company produced and sold 36,000 units at a price of
$31.80 per unit and its selling and administrative expenses totaled $169,000. The company does
not have any variable manufacturing overhead costs. It recorded the following variances during
the year:
Materials price variance
$4,990
U
Materials quantity variance
$500
F
Labor rate variance
$29,889
F
Labor efficiency variance
$68,400
F
Fixed manufacturing overhead budget variance
$11,300
U
Fixed manufacturing overhead volume variance
$18,585
F
Required:
1. When the company closes its standard cost variances, the cost of goods sold will increase
(decrease) by how much?
2. Prepare an income statement for the year.
197
198
136) Santiago Corporation manufactures one product. It does not maintain any beginning or
ending Work in Process inventories. The company uses a standard cost system in which
inventories are recorded at their standard costs and any variances are closed directly to Cost of
Goods Sold. There is no variable manufacturing overhead. The standard cost card for the
company’s only product is as follows:
Inputs
Standard
Quantity
or Hours
Standard Price
or Rate
Standard
Cost
Direct materials
3.6
liters
$6.00
per liter
$21.60
Direct labor
0.60
hours
$18.50
per hour
11.10
Fixed manufacturing overhead
0.60
hours
$16.00
per hour
9.60
Total standard cost per unit
$42.30
The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing
overhead of $192,000 and budgeted activity of 12,000 hours.
During the year, the company completed the following transactions:
a. Purchased 53,000 liters of raw material at a price of $6.80 per liter.
b. Used 47,620 liters of the raw material to produce 13,200 units of work in process.
c. Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash)
worked 8,220 hours at an average cost of $19.20 per hour.
d. Applied fixed overhead to the 13,200 units in work in process inventory using the predetermined
overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs
for the year were $180,700. Of this total, $116,700 related to items such as insurance, utilities, and
indirect labor salaries that were all paid in cash and $64,000 related to depreciation of
manufacturing equipment.
e. Transferred 13,200 units from work in process to finished goods.
f. Sold for cash 12,800 units to customers at a price of $56.50 per unit.
g. Completed and transferred the standard cost associated with the 12,800 units sold from finished
goods to cost of goods sold.
h. Paid $39,000 of selling and administrative expenses.
i. Closed all standard cost variances to cost of goods sold.
199
Required:
1. Compute all direct materials, direct labor, and fixed overhead variances for the year.
2. Record the above transactions in the worksheet that appears below. Because of the width of the
worksheet, it is in two parts. In your text, these two parts would be joined side-by-side to make one
very wide worksheet. The beginning balances have been provided for each of the accounts,
including the Property, Plant, and Equipment (net) account which is abbreviated as PP&E (net).
Cash
Raw Materials
Work in
Process
Finished
Goods
PP&E (net)
=
1/1
$1,040,000
$60,480
$0
$59,220
$430,400
=
a.
=
b.
=
c.
=
d.
=
e.
=
f.
=
g.
=
h.
=
i.
=
12/31
=
=
Materials
Quantity
Variance
Labor Rate
Variance
Labor
Efficiency
Variance
FOH Budget
Variance
FOH Volume
Variance
Retained
Earnings
1/1
$0
$0
$0
$0
$0
$1,590,100
a.
b.
c.
d.
e.
f.
g.
h.
i.
12/31
3. Determine the ending balance (e.g., 12/31 balance) in each account.