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2-159
149.
Razor Corporation produces and sells a single product at $40 per unit. During 2016, the
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company produced 200,000 units, 160,000 of which were sold during the year. All ending
inventory was in finished goods inventory; there was no inventory on hand at the beginning
of the year. The following data relate to the company's production process:
Direct materials
$550,000
Direct labor
400,000
Variable Manufacturing overhead
100,000
Fixed Manufacturing overhead
300,000
Variable marketing and administrative
160,000
Fixed marketing and administrative
110,000
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150.
Consider the following cost and production information for Barnard Steel Building
Company, Inc.
Part C-2472
Part D-1340
All other parts
Quantity
144
120
1140
Subtotal
Average/unit
Subtotal
Average/unit
Subtotal
Average/unit
Direct
costs
Materials
cost
$180,000
$1,250
$405,000
$3,375
$2,446,440
$2,146
Conversion
cost
72,000
500
129,000
1,075
974,700
855
Total
direct
costs
$252,000
$1,750
$534,000
$4,450
$3,421,140
$3,001
Indirect
costs
Indirect
production
cost
885,600
6,150
738,000
6,150
7,011,000
6,150
Indirect
operating
cost
723,600
5,025
603,000
5,025
5,728,480
5,025
Total
indirect
costs
$1,609,200
$11,175
$1,341,000
$11,175
$12,739,480
$11,175
Total costs
$1,861,200
$12,925
$1,875,000
$15,625
$16,160,620
$14,176
Additional information:
• Sales revenue: $20,000,000
• Beginning inventory: $1,150,000
• Sales of part D-1340: 80 units
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2-166
151.
Consider the following cost and production information for Darrell Building Components,
Inc.
Part C-1849
Part D-1251
All other parts
Quantity
72
60
570
Subtotal
Average
Per unit
Subtotal
Average
Per unit
Subtotal
Average
Per unit
Direct costs
Materials cost
$45,000
$625
$101,400
$1,690
$611,610
$1,073
Conversion
cost
18,000
250
32,400
540
243,960
428
Total direct
costs
$63,000
$875
$133,800
$2,230
$855,570
$1,501
Indirect costs
Indirect
manufacturing
cost
221,400
3,075
184,500
3,075
1,752,750
3,075
Indirect
operating cost
181,080
2,515
150,900
2,515
1,433,550
2,515
Total indirect
costs
$402,480
$5,590
$335,400
$5,590
$3,186,300
$5,590
Total costs
$465,480
$6,465
$469,200
$7,820
$4,041,870
$7,091
Additional information:
• Sales revenue: $5,200,000
• Beginning inventory: $275,000
• The only spending increase was for material cost due to increased production. All other
spending as shown above was unchanged.
• Sales of all parts are the same as the number of units produced.
Darrell Building Components, Inc. uses the absorption costing method.
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2-171
152.
Hurwitz Corporation had the following activities during 2016:
Raw Materials:
Inventory, Jan. 1, 2016
$200,000
Purchases of Raw Materials
318,000
Inventory, Dec. 31, 2016
210,000
Direct Manufacturing Labor
180,000
Utilities: Plant
50,000
Depreciation: Plant and Equipment
40,000
Indirect Materials
30,000
Indirect Labor
150,000
Other Manufacturing Overhead
60,000
Sales Revenues
1,250,000
Selling and Administrative Expenses
150,000
Income Tax Rate
30%
Work-in-process Inventory, Dec. 31,
2016
120,000
Work-in-process Inventory, Jan. 1,
2016
64,000
Finished Goods Inventory, Jan. 1, 2016
80,000
Finished Goods Inventory, Dec. 31,
2016
150,000
Required:
(a) Prepare a schedule of cost of goods manufactured for 2016.
(b) Prepare a schedule of cost of goods sold for 2016.
(c) Prepare an income statement for 2016.
(a)
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