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86.
Alton Company produces metal belts. During the current month, the company incurred the
following product costs:
Raw materials $100,000
Direct labor $75,000
Electricity used in the Factory $25,000
Factory foreperson salary $3,750
Maintenance of factory machinery $2,000
Alton Company's indirect product costs totaled:
87.
Alton Company produces metal belts. During the current month, the company incurred the
following product costs:
Raw materials $100,000
Direct labor $75,000
Electricity used in the Factory $25,000
Factory foreperson salary $3,750
Maintenance of factory machinery $2,000
Alton Company's direct product costs totaled:
88.
Alton Company produces metal belts. During the current month, the company incurred the
following product costs:
Raw materials $100,000
Direct labor $75,000
Electricity used in the Factory $25,000
Factory foreperson salary $3,750
Maintenance of factory machinery $2,000
Alton Company's total product costs:
89.
In a manufacturing company, the cost of goods sold is equal to:
90.
In a manufacturing company, the cost of finished goods manufactured is equal to:
91.
In a manufacturing company, the cost of goods sold is equal to:
92.
In a schedule of cost of finished goods manufactured, the figure for total manufacturing
costs:
93.
The cost of finished goods manufactured will exceed the cost of goods sold whenever:
94.
Grand Co.'s ending inventory of work in process is twice as large as at the beginning of the
period. Therefore:
95.
During its first year of operations, Brown Company incurred the following product costs:
Direct materials used in production $200,000
Direct labor $175,000
Manufacturing overhead $145,500
Brown Company's ending Work in Process Inventory amounted to $35,000 at the end of the
year. What is the company's cost of finished goods manufactured for the year?
16-47
96.
During the current year, Jules Company incurred the following product costs:
Direct materials used in production $250,000
Direct labor $185,000
Manufacturing overhead $245,500
Jules Company's beginning Work in Process Inventory was $20,000 and its ending Work in
Process Inventory amounted to $30,000. What is the company's cost of finished goods
manufactured for the year?
Essay Questions
97.
Generally Accepted Accounting Principles
The accounting department of Burke Manufacturing prepares numerous reports at the
request of, and for exclusive use by, the management of the company. Is it necessary that
these managerial accounting reports be developed in accordance with generally accepted
accounting principles (GAAP)?
98.
Accounting terminology
Listed below are nine technical accounting terms introduced or emphasized in this chapter:
Each of the following statements may (or may not) describe one of these technical terms.
In the space provided, indicate the accounting term described, or answer "None" if the
statement does not correctly describe any of the terms.
____ (a) The account that is debited when the Work in Process Inventory account is
credited.
____ (b) A term describing any manufacturing cost that can be traced conveniently and
directly to the various types of products being manufactured.
____ (c) Costs that are charged directly to expense accounts at the time that the costs are
incurred.
____ (d) The category of manufacturing cost that would include the cost of tires used in the
manufacture of automobiles.
____ (e) An account which has a balance that is increased by manufacturing costs incurred
during the period and decreased by the cost of finished goods manufactured.
____ (f) The category of manufacturing cost that includes the salaries of plant guards,
supervisors, and maintenance personnel.
____ (g) A term describing all three categories of manufacturing costs.
99.
Classification of costs
Using the code letters below, indicate in the space provided how each of the following
costs should be classified for a pen manufacturing company:
Costs
____ (a) Property tax on the factory building.
____ (b) The chief financial officer's salary.
____ (c) Plastic used to manufacture pens.
____ (d) Janitors at the factory.
____ (e) Manufactured pens waiting to be sold to customers.
____ (f) Advertising logos.
____ (g) Partially completed pens.
100.
Classification of costs
Using the code letters below, indicate in the space provided how each of the following
costs should be classified in the indicated manufacturing company:
Costs
____ (a) Research and development costs incurred by Martin, manufacturer of derailleurs,
brakes, and other component parts for bicycles in its efforts to develop new products.
____ (b) Salaries paid by Martin to the plant managers supervising production operations.
____ (c) An inventory of Martin Group 105 components purchased by Earl Bicycle
Corporation for use in the manufacture of Earl's Model 1200 aluminum bicycle.
____ (d) An inventory of Model 1200 bicycle frames manufactured by Earl. Prior to sale,
these frames will be painted and equipped with derailleurs, brakes, and other component
parts.
____ (e) Salaries paid by Earl to its sales personnel.
____ (f) Salaries paid by Earl to employees who install derailleurs, brakes, and other
component parts on the bicycle frames.
____ (g) An inventory of Martin Group 105 derailleurs awaiting sale to customers.
101.
The following information is available for the LBB Company for the year 2015:
Required
(1) What are total manufacturing costs charged to work in process?
(2) What are costs of finished goods manufactured?
(3) What is the cost of goods sold?
(4) What is gross profit?
(5) What is operating income?
102.
The following information is for the Harding Company for 2015:
Required:
(1) What is the cost of materials purchased?
(2) What is the cost of goods sold?
(3) What is gross profit?
(4) What is net profit?
