161
202)
What are the components of the schedule of cost of goods manufactured? Describe each
component.
203)
The following cost items relate to the Henning Company. Classify each cost as a variable cost or a
fixed cost by placing an X in the appropriate column. Each cost should be evaluated in terms of the
volume of units of finished products produced. Also indicate with an X for each item if it is a product
cost or a period cost.
Variable or fixed
cost?
Product or period cost?
Cost item
Variable
Fixed
Product
Executive salary
Direct labor
Direct materials
Depreciation of
factory equipment
Indirect labor
Delivery expense
Television advertising
Indirect materials
204)
For each item shown below, classify it as a product cost or a period cost, by placing an X in the
appropriate column. For each item that is a product cost, also indicate whether it is a direct cost or an
indirect cost with respect to a unit of finished product.
Product or period cost? Direct or indirect cost?
Cost item Product Period Direct Indirect
Administrative salaries
Direct labor
Advertising
Property tax on the factory
Factory maintenance
Direct materials
Depreciation on factory
equipment
Interest expense
Factory
supplies
205)
Marv’s Furniture and Fixtures produces seats for movie theaters. Listed below are selected cost items
for the seat production. Classify each cost as either fixed or variable, and either a product or a period
cost by placing an x in the appropriate boxes.
Cost by behavior
Cost by function
Variable
Fixed
Product
Period
Fabric for seats…………
Assembly
labor……………………………
Factory property taxes……………..
Accounting staff salaries…………..
Sales office rent……………………
Sales manager’s salary……………..
Depreciation on factory
equipment………………………
….
Sales commissions………………
…
206)
Brotherton Company is a manufacturer of Blu-ray discs. Place each of the following costs in the
appropriate column.
Product cost
Cost item
Period
cost
Direct
materials
Direct
labor
Factory
overhead
a.
Factory maintenance salary, $40,000
b.
Salary of factory supervisor, $70,000
c.
Salary of production worker, $42,000
d.
Salary of the company’s president, $100,000
e.
Television advertising, $25,000
f.
Property tax on factory, $15,000
g.
Sales commissions, $65,000
h.
Depreciation on factory equipment, $17,000
i.
Plastic used in the manufacture of the discs,
$14,000
207)
The following costs are incurred by Gonzalez Manufacturing Co. Classify each cost item as either a
period cost or a product cost. If the cost is a product cost, identify it as a prime and/or conversion
cost.
Period Cost
Product Cost
Prime Cost
Conversion
Cost
Factory property taxes……….
Payroll taxes for assembly labor………..
Depreciation of factory equipment………..
Insurance on delivery vehicles……….
Indirect materials used……….
Wages of production workers……….
Production supervisor’s salary……….
Advertising………..
Direct materials used……….
Sales salaries……….
208)
Walter Products and Sandburg Industries report the following information at December 31:
WALTER SANDBURG
Accounts Receivable
$41,000
$68,000
Cash
6,000
7,000
Finished Goods Inventory
25,000
Work in Process Inventory
40,000
Merchandise Inventory
48,000
Prepaid Expenses
1,000
2,000
Raw Materials Inventory
21,000
Required:
(a) Which company is a manufacturer? Explain.
(b) Prepare the Current Asset Section of the Balance Sheet for the manufacturer.
209)
Thornton Foods bakes and sells 2,000 dozen muffins each week to food service operations. Among
the costs are bakers’ salaries, $24,000; production management salaries, $16,000; production
equipment operating costs, $32,000; and flour and ingredient costs, $15,000. Using this
information, compute: (a) prime costs and (b) conversion costs.
210)
A manufacturing company’s finished goods inventory on January 1 was $68,000; cost of goods
manufactured was $147,000; and the December 31 finished goods inventory was $77,000. What is
the cost of goods sold for that year?
211)
A manufacturing company’s beginning finished goods inventory was $29,000; cost of goods
manufactured was $316,000; and the ending finished goods inventory was $31,000. What is the
cost of goods sold for that year?
212)
Calculate Cost of Goods Sold for the following two companies:
Beginning Inventory:
LEWIS, INC.
MERCER CO.
Merchandise
$250,000
Finished Goods
$550,000
Cost of Goods Purchased
460,000
Cost of Goods Manufactured
688,000
Ending Inventory:
Merchandise
128,000
Finished Goods
350,000
213)
The Tacky Company manufactures staples. Costs for October were direct labor, $84,000; indirect
labor, $36,700; direct materials, $55,900; factory maintenance, $4,800; factory utilities, $3,200;
and insurance on plant and equipment, $700. What is Tacky Company’s factory overhead for
October?
214)
The Langston Company manufactures coats. Costs for February were as follows:
Direct materials
$19,650
ruary.
Direct labor
15,210
Factory insurance
950
Sales commissions
4,700
Corporate executive salaries
5,500
Factory supervisor salary
3,500
Indirect materials
1,920
Required: Calculate the total manufacturing cost for Feb
215)
Information for Maxim Manufacturing is presented below. Compute both the cost of goods
manufactured and the cost of goods sold for Maxim Manufacturing.
Beginning raw materials inventory
$36,800
Beginning work in process inventory
21,200
Direct labor
81,000
Beginning finished goods inventory
64,000
Total factory overhead
126,000
Raw materials purchased
21,500
Ending raw materials inventory
40,000
Ending work in process inventory
20,000
Ending finished goods inventory
46,000
216)
Information for Underwood Industries is presented below. Compute the cost of goods manufactured.
Beginning
Ending
Raw materials inventory
$26,800
30,100
Work in process inventory
41,200
39,000
Finished goods inventory
54,000
53,500
Raw materials purchased
93,500
Direct labor
61,000
Total factory overhead
117,300
173
217)
Information for Eastman Industries is presented below. Compute the cost of goods manufactured.
Beginning work in process inventory
21,200
Ending work in process inventory
20,000
Raw materials used in production
$46,800
Direct labor
81,000
Total factory overhead
106,000
218)
Use the following information to prepare the schedule of cost of goods manufactured for Graffstone
Company for the month ended June 30.
Work in Process inventory, May 31
$12,600
Work in Process inventory, June 30
16,500
Direct materials used during June
21,000
Direct labor used during June
31,000
Factory overhead:
Indirect material
6,400
Indirect labor
9,200
Factory rent
12,000
Factory depreciation
15,000
Factory utilities
18,400
219)
Duncan Crafts manufactures specialty key chains for tourist attractions. On January 1, the firm had
300 souvenir attraction disks used in the production of the chains that cost $3 each; and 600
completed key chains that cost $6 each. During the year Duncan Crafts purchased 1,500 souvenir
disks costing $3 each and produced 1,100 key chains. Compute the total cost of raw materials
inventory at December 31.