219) Duncan Crafts manufactures specialty key chains for tourist attractions. On January 1, the
firm had 300 souvenir attraction disks, costing $3 each, used in the production of key chains.
During the year Duncan Crafts purchased 1,500 souvenir disks costing $3 each and produced
1,100 key chains. Compute the total cost of souvenir disk raw materials inventory at December 31.
220) Compute the ending work in process inventory for a manufacturer with the following
information.
Raw materials purchased
$131,700
Direct materials used in production
65,400
Direct labor used
44,000
Total factory overhead used
101,600
Work in process inventory, beginning of year
32,500
Cost of goods manufactured
212,900
Work in process inventory, beginning
$32,500
Direct materials used in production
65,400
Direct labor used
44,000
Total factory overhead used
101,600
Less: Cost of goods manufactured
Work in process inventory, ending
122
221) The following items for Neptune Company are used to compute the cost of goods
manufactured and the cost of goods sold. Indicate how each item should be used in the
calculations by filling in the blanks with “+” if the item is to be added, “-” if the item is to be
subtracted, or “0” if the item is not used in the calculation. The first item is completed as an
example.
Cost of Goods
Sold
Beginning finished goods inventory
__+__
Ending finished goods inventory
______
Direct labor
______
Indirect labor
______
Beginning work in process inventory
______
Ending work in process inventory
______
General and administrative expenses
______
Indirect materials
______
Beginning raw materials inventory
______
Ending raw materials inventory
______
Raw material purchases
______
Depreciation of factory building
______
Cost of goods manufactured
______
124
222) Information for Stanton, Inc., as of December 31 follows. Prepare a schedule of cost of
goods manufactured for the year ended December 31.
Administrative salaries
$ 35,000
Depreciation of factory equipment
25,000
Depreciation of delivery vehicles
6,000
Direct labor
68,000
Factory supplies used
9,000
Finished goods inventory, January 1
57,000
Finished goods inventory, December 31
?
Factory insurance
15,500
Interest expense
12,000
Factory utilities
14,000
Factory maintenance
7,500
Raw materials inventory, January 1
5,000
Raw materials inventory, December 31
4,000
Raw material purchases
125,000
Rent on factory building
25,000
Repairs of factory equipment
11,500
Sales commissions
37,500
Work in Process inventory, January 1
3,500
Work in Process inventory, December 31
2,700
223) Information for the Deuce Manufacturing Company follows. Compute the cost of goods
manufactured for this company.
Beginning raw materials inventory
$ 53,200
Beginning work in process, inventory
78,400
Ending raw materials inventory
58,100
Ending work in process, inventory
98,000
Direct labor
149,800
Total factory overhead
105,000
Raw material purchases
210,000
Direct materials:
$ 53,200
210,000
Direct materials used
Direct labor
149,800
Total factory Overhead
Total manufacturing costs
Add work in process inventory, beginning
Total manufacturing costs
Less work in process inventory, ending
Cost of goods manufactured
127
224) Information for Jersey Metalworks as of December 31 follows. Prepare (a) the company’s
schedule of cost of goods manufactured for the year ended December 31; (b) prepare the
company’s income statement that reports separate categories for selling and general and
administrative expenses.
Administrative salaries expense
$ 135,000
Depreciation expense–Factory equipment
52,400
Depreciation expense–Delivery vehicles
36,200
Depreciation expense–Office equipment
24,800
Advertising expense
22,350
Direct labor
268,000
Factory supplies use
12,000
Income taxes expense
91,500
Indirect labor
35,000
Indirect material
24,000
Factory insurance
15,500
Factory utilities
14,000
Factory maintenance
7,500
Inventories
Raw materials inventory, January 1
32,000
Raw materials inventory, December 31
28,000
Work in Process inventory, January 1
33,780
Work in Process inventory, December 31
37,460
Finished goods inventory, January 1
56,970
Finished goods inventory, December 31
62,000
Raw materials purchases
325,000
Rent expense–Factory
50,000
Rent expense–Office space
24,000
Rent expense–Selling Space
24,000
Sales salaries expense
97,500
Sales
1,452,000
Sales discounts
29,000
225) Martinez Company makes leather cowboy hats. Each hat requires 1/2 yard of leather to
produce. At the beginning of the year, the company had (a) 75 hats in Finished Goods Inventory
and (b) 60 yards of leather at a cost of $12 per yard in Raw Materials Inventory. During the
year, the company purchased 850 more yards of leather at $12 per yard and manufactured 1,600
hats. Determine the unit and dollar amounts of leather Raw Materials Inventory at the end of
the year.
226) ________ is an activity that provides financial and nonfinancial information to an
organization’s managers and other internal decision makers.
227) ________ is the process of setting goals and making plans to achieve them.
228) ________ is the process of monitoring planning decisions and evaluating an organization’s
activities and employees.
229) The purpose of managerial accounting information is to help ________ users make
decisions while the purpose of financial accounting is to help ________ users make decisions.
230) A ________ system means that a company acquires or produces inventory only when
needed.
231) The model whose goal is to eliminate waste while satisfying the customer and providing a
positive return to the company is the ________.
232) ________ rejects the notions of “good enough” or “acceptable” and challenges employees
and managers to continuously experiment with new and improved business practices.
233) ________ means that managers and employees understand the changing needs and wants of
customers and align management and operating practices accordingly.
234) ________ is the deliberate misuse of the employer’s assets for the employee’s personal gain.
235) Policies and procedures used by management to monitor and control business activities are
known as ________.
236) ________ are beliefs that distinguish right from wrong.
237) A cost can be classified as either ________ or ________based how it changes, in total, with
changes in the volume of activity.
238) A ________ cost changes in total in proportion to changes in the volume of activity.
239) A ________ cost does not change in total in proportion to changes in the volume of activity
within the relevant range.
240) Costs necessary and integral to the manufacture of finished products are ________ costs.
241) Costs that flow directly to the current income statement and are not reported as assets are
________ costs.
242) ________ inventory consists of goods a company acquires to use in making products.
243) ________ inventory consists of products in the process of being manufactured but not yet
complete.
244) ________ inventory consists of completed products ready for sale by a manufacturer.
245) A manufacturer’s inventory that is not completely finished is called ________ .
246) One of the main differences between the calculation of cost of goods sold for a
merchandiser and that of a manufacturer is that the calculation includes cost of goods purchased
for the merchandiser, but the manufacturer replaces that with ________.
247) ________ reveals how much raw materials inventory is available in terms of the number of
days’ sales.
248) ________ reveals how many times a company uses its raw materials inventory in
production during a period.
249) Expenditures incurred in the process of converting raw materials to finished goods, that
include direct labor and factory overhead are known as ________.
250) Expenditures directly associated with the manufacture of finished goods that include direct
materials and direct labor, are ________ costs.
251) Crane, Inc. reported the following data regarding costs and inventories for the current year:
beginning work in process inventory, $4,000; beginning finished goods inventory, $2,000; cost
of goods manufactured, $11,500; operating expenses, $3,000; ending finished goods inventory,
$1,000; ending work in process inventory, $1,500. Cost of goods sold for Crane, Inc. equals
________.
252) Waters, Inc. reported the following data regarding costs and inventories for the current year:
beginning finished goods inventory, $5,000; cost of goods manufactured, $21,500; ending
finished goods inventory, $4,000. Cost of goods sold for Waters, Inc. equals ________.
253) For a manufacturer, the cost of goods sold can be computed by adding the beginning
finished goods inventory to ________ and then subtracting the ending finished goods inventory.