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111. The Plastechnics Company began operations several years ago. The company purchased
a building and, since only half of the space was needed for operations, the remaining space was
rented to another firm for rental revenue of $20,000 per year. The success of Plastechnics
Company’s product has resulted in the company needing more space. The renter’s lease will
expire next month and Plastechnics will not renew the lease in order to use the space to expand
operations and meet demand.
The company’s product requires direct materials that cost $25 per unit. The company employs a
production supervisor whose salary is $2,000 per month. Production line workers are paid $15 per
hour to manufacture and assemble the product. The company rents the equipment needed to
produce the product at a rental cost of $1,500 per month. Additional equipment will be needed as
production is expanded and the monthly rental charge for this equipment will be $900 per month.
The building is depreciated on a straight-line basis at $9,000 per year.
The company spends $40,000 per year to market the product. Shipping costs for each unit are $20
per unit. The cost of electricity and other utilities used for product is $2 per unit. The company
plans to liquidate several investments in order to expand production. These investments currently
earn a return of $8,000 per year.
Required:
Complete the answer sheet that follows by placing an “X” under each heading that identifies the
cost involved. The “X’s” can be placed under
more
than
one
heading
for a single cost, e.g., a cost
might be a variable cost, and an overhead cost.
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112. The following cost and inventory data were taken from the records of the Beca Company
for the year:
Costs incurred:
Required:
(a) Compute the cost of goods manufactured.
(b) Prepare a cost of goods sold statement.
113. The Matter Manufacturing Company provided you with the following information for the
fiscal year ended December 31.
Required:
(a) Compute the total manufacturing costs incurred during the year.
(b) Compute the total work-in-process during the year.
(c) Compute the cost of goods manufactured during the year.
(d) Compute the cost of goods sold during the year.
(e) Compute the total prime costs for the year.
(f) Compute the total conversion costs for the year.
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114. The cost accountant for the Larsen Manufacturing Company has provided you with the
following information for the month of July:
Required:
Compute the following
per
unit
items, assuming the company produced and sold 5,000 units at a
price of $210.00 per unit.
(a) Total variable cost
(b) Variable inventoriable cost
(c) Full absorption cost
(d) Full cost
(e) Contribution margin
(f) Gross margin
(g) Profit margin
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115. The cost accountant for the Larsen Manufacturing Company has provided you with the
following information for the month of July:
Required:
Assuming the company produced and sold 5,000 units, and there were no units in inventory on
July 1, prepare the following income statements for the month of July:
(a) Contribution margin income statement.
(b) Gross margin income statement.
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116. Schuh Enterprises manufactures baseballs and identified the following costs associated
with their manufacturing activity (V = Variable; F = Fixed). The following information is available
for the month of June when 25,000 baseballs were produced, but only 23,500 baseballs were sold.
Required:
Compute the following amounts for July, assuming 30,000 baseballs were produced and sold:
(Assume normal production ranges from 15,000 to 40,000 baseballs)
(a) Total manufacturing costs.
(b) Total conversion costs.
(c) Period costs per unit.
(d) Full costs per unit.
117. Each column below is independent and for a different company. Use the data given, which
refer to one year for each example, to find the unknown account balances.
118. The following data appeared in Hunter Company’s records on December 31:
On January 1 the Finished Goods Inventory account had a balance of $280,000, and the Work–in–
process Inventory account had a balance of $90,650. Sales revenue for the year was $6,687,500.
Required:
Prepare
a
cost
of
goods
sold
statement
and
an
income
statement
.
119. The information below has been taken from the cost records of Scottso Corp. for the past
year:
Required:
a. Calculate the cost of direct materials purchased during the year.
b. Calculate the direct labor costs charged to production during the year.
c. Calculate the cost of goods manufactured during the year.
d. Calculate the cost of goods sold for the year.
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120. Information from the records of the Garver Production Company for the month of January
is as follows:
Required:
a. Prepare a statement of cost of goods manufactured for the month of January.
b. Prepare an income statement for the month of January.
121. The information below has been taken from the cost records of Benno Corp. for the past
year:
Required:
a. Calculate the cost of direct materials purchased during the year.
b. Calculate the direct labor costs charged to production during the year.
c. Calculate the cost of goods manufactured during the year.
d. Calculate the cost of goods sold for the year.
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122. Information from the records of the Seiler Production Company for the month of July is as
follows:
Required:
a. Prepare a statement of cost of goods manufactured for the month of July.
b. Prepare an income statement for the month of July.
123. The Moundsview Company provided you with the following information for the fiscal year
ended December 31.
Required:
(a) Compute the total manufacturing costs incurred during the year.
(b) Compute the total work-in-process during the year.
(c) Compute the cost of goods manufactured during the year.
(d) Compute the cost of goods sold during the year.
(e) Compute the total prime costs for the year.
(f) Compute the total conversion costs for the year.