165. The Butchart Company manufactures microwave ovens. Last year, the per-unit product cost was $56, the
per-unit prime cost was $34, and the per-unit conversion cost was $42. Cost of Goods Sold for the year was
$560,000 and the sale price per unit was $100. In addition, direct labor costs of $200,000 and selling and
administrative expenses of $240,000 were incurred.
Required:
1. Calculate how many units were sold last year
2. Compute the cost of direct materials used
3. Compute the cost of overhead
4. Compute the Gross margin for the year
5. Calculate Operating income
166. Tucker Company, a manufacturing firm, has supplied the following information from its accounting
records for the month of April.
Direct labor cost
$12,000
Purchases of raw materials
17,000
Factory insurance
4,000
Research and development
7,500
Factory property taxes
3,000
Sales commissions paid
4,500
Work in process, April 1
2,000
Work in process, April 30
2,800
Materials inventory, April 1
1,475
Materials Inventory, April 30
1,200
Finished Goods Inventory, April 1
2,250
Finished Goods Inventory, April 30
750
Required:
Prepare a Statement of Cost of Goods Manufactured
Tucker Company
Statement of Cost of Goods Manufactured
For the month ended April 30
Materials Inventory, April 1
$ 1,475
Materials purchased
17,000
Materials Available for Use
18,475
Materials Inventory, April 30
1,200
Materials used
$17,275
Direct Labor
12,000
Overhead
7,000
Total Manufacturing costs
36,275
Work in Process, April 1
2,000
Work in Process, April 30
<2,800>
Cost of Goods Manufactured
$35,475
167. In June, Olympic Company purchased materials costing $38,000, and incurred direct labor cost of $42,000.
Overhead totaled $27,000 for the month. Information on inventories was as follows.
June 1
June 30
Materials
$3,000
$2,700
Work in Process
1,000
1,275
Finished Goods
2,500
1,775
Required:
1. Calculate the cost of direct materials used during June.
2. Calculate the total manufacturing cost for June.
3. Calculate the Cost of Goods Manufactured for June.
4. Calculate Cost of Goods Sold for June.
Materials, 6/1
$3,000
Purchases
38,000
Materials, 6/30
<2,700>
Materials used
$38,300
($38,300 + $42,000 + $27,000) = $107,300
Total Manufacturing costs
$107,300
Work in process, 6/1
1,000
Work in process, 6/30
<1,275>
Cost of Goods Manufactured
$107,025
Cost of Goods Manufactured
$107,025
Finished Goods, 6/1
2,500
Finished Goods, 6/30
<1,775>
Cost of Goods Sold
$107,750
168. Templar Company, a manufacturing firm, has supplied the following information from its accounting
records for the month of November:
Factory supplies used
$18,000
Depreciation on factory building
17,000
Salary of company controller
6,000
Factory janitorial costs
5,000
Marketing and promotion
4,500
Direct labor cost
22,000
Purchases of raw materials
10,000
Finished Goods Inventory, Nov. 1
2,250
Finished Goods Inventory, Nov. 30
3,750
Work in Process Inventory, Nov. 1
4,200
Work in Process Inventory, Nov. 30
2,750
Materials Inventory, Nov. 1
3,500
Materials Inventory, Nov. 30
5,100
Required:
1. Prepare a Statement of Cost of Goods Manufactured
2. Prepare a Statement of Cost of Goods Sold
Materials Inventory, Nov. 1
$ 3,500
Purchases of materials
10,000
Materials Inventory, Nov. 30
<5,100>
Materials used
$ 8,400
Direct Labor
22,000
Overhead
40,000
Total manufacturing costs
70,400
Work in Process Inventory, Nov. 1
4,200
Work in Process Inventory, Nov. 30
<2,750>
Cost of Goods Manufactured
$71,850
Cost of Goods Manufactured
$71,850
Finished Goods Inventory, Nov. 1
2,250
Finished Goods Inventory, Nov. 30
<3,750>
Cost of Goods Sold
$70,350
169. Fidalgo Company makes stereos. During the year, Fidalgo manufactured and sold 75,000 stereos at a sales
price of $575 per unit. Fidalgo’s per-unit product cost was $540 and selling and administrative expenses totaled
$2,000,000.
Required:
1. Compute the total sales revenue
2. Compute the gross margin
3. Compute the operating income
170. Baleen Company supplied the following data at the end of the current year:
Sales commissions
$12,000
Sales revenue
120,000
Research and development
17,000
Finished Goods Inventory, Jan. 1
7,500
Work in Process Inventory, Jan 1
9,000
Finished Goods Inventory, Dec. 31
6,000
Work in Process Inventory, Dec. 31
11,000
Cost of Goods Manufactured
52,000
Required:
Prepare an Income Statement for Baleen Company.
Sales Revenue
$120,000
Cost of Goods Sold*
53,500
Gross Margin
66,500
Less:
Selling Expense
12,000
Administrative Expense
17,000
Operating Income
$ 37,500
75,000 ´ $575 = $43,125,000
Sales Revenue
$43,125,000
Cost of Goods Sold
(75,000 ´ $540)
40,500,000
Gross Margin
2,625,000
Gross Margin
$2,625,000
Sell. and Admin.
2,000,000
Operating Income
625,000
171. Macon Company supplied the following data and information on inventories at the end of the current year.
January 1
December 31
Materials
$ 21,000
$ 23,500
Work in Process
17,500
8,500
Finished Goods
26,000
27,000
Direct Labor
$ 40,000
Selling Expenses
31,000
Sales Revenue
400,000
Administrative Expenses
14,500
Purchases of raw materials
62,000
Factory Supervision
50,000
Factory supplies used
25,000
Required:
Prepare an Income Statement of Macon Company for the current year
Macon Company
Income Statement
For the year ended December 31, 20xx
Sales Revenue
$ 400,000
Cost of Goods Sold*
182,500
Gross Margin
217,500
Less:
Selling Expenses
31,000
Administrative Expenses
14,500
Operating Income
$ 172,000
*Cost of Goods Manufactured**
$ 183,500
Finished Goods Inventory, Jan. 1
26,000
Finished Goods Inventory, Dec. 31
<27,000>
Cost of Goods Sold
182,500
**Purchases of raw materials
$62,000
Materials Inventory, 1/1
21,000
Materials Inventory, 12/31
<23,500>
Materials used
59,500
Direct Labor
40,000
Overhead ($50,000 + $25,000)
75,000
Total manufacturing costs
174,500
Work in Process Inventory, Jan. 1
17,500
Work in Process Inventory, Dec. 31
<8,500>
172. Bartlow Company has supplied the following information from its accounting records for the month of
May.
Direct labor cost
$ 11,500
Purchases of raw materials
20,000
Factory depreciation
7,500
Advertising
10,000
Factory property taxes
6,500
Materials Inventory, 5/1
1,250
Materials Inventory, 5/31
2,500
Work in Process Inventory, 5/1
?
Work in Process Inventory, 5/31
1,500
Cost of Goods Manufactured
45,850
Sales Revenue
?
Executive salary cost
25,000
Finished Goods Inventory, 5/1
5,500
Finished Goods Inventory, 5/31
4,250
Operating Income
67,900
Gross Margin
?
Required:
Solve for the missing amounts (?)
Materials Inventory, 5/1
$ 1,250
Purchases of materials
20,000
Materials Inventory, 5/31
<2,500>
Materials used
$ 18,750
Direct labor
11,500
Overhead (7,500 + 6,500)
14,000
Total Manufacturing costs
44,250
Work in Process, 5/1
3,100
Work in Process, 5/31
<1,500>
Cost of Goods Manufactured
$ 45,850
Sales Revenue
Cost of Goods Sold*
47,100
Gross Margin
102,900
Less:
Selling Expense
10,000
Administrative Expense
25,000
*Cost of Goods Manufactured
$ 45,850
Finished Goods Inventory, 5/1
5,500
Finished Goods Inventory, 5/31
<4,250>
Cost of Goods Sold
$ 47,100
173. See the following separate cases.
Case #1
Case #2
Sales
$ 1,000
$ 1,300
Cost of Goods Manufactured
A
500
Finished Goods Inventory (beginning balance)
100
D
Finished Goods Inventory (ending balance)
150
200
Cost of Goods Sold
B
600
Gross Margin
300
E
Selling Expenses
C
75
Administrative Expenses
50
40
Operating Income
200
F
Required:
Solve for the missing amounts (A,B,C,D,E,F)
Case #1
Case #2
Sales
$ 1,000
$ 1,300
Cost of Goods Manufactured
750
500
Finished Goods Inventory (beginning balance)
100
300
Finished Goods Inventory (ending balance)
<150>
<200>
Cost of Goods Sold
700
600
Gross Margin
300
700
Selling Expenses
50
75
Administrative Expenses
50
40
Operating Income
200
585
174. See the following separate cases.
Case #1
Case #2
Purchase of materials
$ 5,000
C
Materials Inventory (beginning balance)
A
220
Materials Inventory (ending balance)
1,000
350
Direct Labor
7,000
4,250
Factory supervision
1,500
1,100
Factory supplies
1,250
900
Total Manufacturing costs
14,500
D
Work in Process Inventory (beginning balance)
1,200
1,230
Work in Process Inventory (ending balance)
B
650
Cost of Goods Manufactured
14,600
10,200
Solve for the missing amounts (A,B,C,D)
Case #1
Case #2
Purchases of materials
$ 5,000
$ 3,500
Materials Inventory (beginning balance)
750
220
Materials Inventory (ending balance)
<1,000>
<350>
Materials used
4,750
3,370
Direct Labor
7,000
4,250
Overhead
2,750
2,000
Total Manufacturing Costs
14,500
9,620
Work in Process Inventory, (beginning balance)
1,200
1,230
Work in Process Inventory, (ending balance)
<1,100>
<650>
Cost of Goods Manufactured
$14,600
$10,200
175. Rancor Company’s accountant prepared the following Income Statement for the month of August.
Rancor Company
Income Statement
For the month of August
Sales Revenue
$ 912,200
Cost of Goods Sold
601,920
Gross Margin
310,080
Less:
Selling Expense
164,160
Administrative Expense
63,840
Operating Income
$ 82,080
Required:
1. Calculate the Sales revenue percent
2. Calculate the Cost of Goods Sold percent
3. Calculate the Gross Margin percent
4. Calculate the Selling Expense percent
5. Calculate the Administrative Expense percent
6. Calculate the Operating Income percent
176. Extrema Company supplied the following data at the end of the current year.
Finished Goods Inventory, Jan 1.
$ 12,000
Finished Goods Inventory, Dec. 31
7,500
Cost of Goods Manufactured
152,380
Sales Revenue
212,000
Sales commissions
19,080
Research and development costs
15,900
Required:
1. Calculate the Cost of Goods Sold percent
2. Calculate the Gross Margin percent
3. Calculate the Selling Expense percent
4. Calculate the Administrative Expense percent
5. Calculate the Operating Income percent
Cost of Goods Manufactured
$ 152,380
Finished Goods Inventory, 1/1
12,000
Finished Goods Inventory, 12/31
<7,500>
Cost of Goods Sold
156,880
Sales Revenue
$212,000
Cost of Goods Sold
156,880
Gross Margin
55,120
Less:
Selling Expense
19,080
Administrative Expense
15,900
Operating Income
$ 20,140
177. Rizzuto Company supplied the following information for the month of January.
Cost of Goods Sold percent
62%
Selling Expense percent
6%
Administrative expense
13%
Required: Reconstruct Rizzuto’s Income Statement for January assuming that their total sales revenue for the month equaled $500,000.
178. Cashman Company supplied the following information for the month of December.
Operating Income percent
10.5%
Gross Margin percent
30%
Required: Solve for the following amounts assuming that Cashman Company’s Operating Income in December was $44,100.
1. Sales Revenue
2. Cost of Good Sold
3. Total Selling and Administrative expenses
1.
Sales Revenue = $44,100/ .105 = 420,000
Cost of Goods sold = 420,000 ´ .70 = $294,000
3.
Gross Margin (420,000 ´ .30)
126,000
Less: Selling and Administrative Exp.
81,900
Operating Income
44,100
Sales Revenue
$ 500,000
Cost of Goods Sold (500,000 ´ 62%)
310,000
Gross Margin (500,000 ´ 38%)
190,000
Less:
Selling Expense (500,000 ´ 6%)
30,000
Administrative Expense (500,000 ´ 13%)
65,000
Operating Income
95.000
179. Wapato Company produces a product with the following per unit costs.
Direct materials
$17
Direct labor
11
Overhead
12
Last year, Wapato produced and sold 3,000 units at a sales price of $80 each. Total selling and administrative expenses were $25,000.
Required: Solve for the following
1. Total Cost of Goods Sold for last year
2. Operating Income for last year
3. Total Gross Margin for last year
4. Prime cost per unit
1.
(17 + 11 + 12) ´ 3,000 = $120,000
2. & 3.
Sales Revenue (3,000 ´ 80)
$240,000
Cost of Goods Sold
120,000
Gross Margin
120,000
Less:
Selling and Administrative expenses
25,000
Operating Income
$ 95,000
4.
17 + 11 = $28
180. Tesco Company showed the following costs for last month.
Direct Materials
$ 40,000
Direct Labor
35,000
Overhead
52,000
Selling Expense
17,000
Administrative Expense
12,000
Last month, Tesco produced and sold 20,000 units at a sales price per unit of $18.
Assume no beginning or ending inventory balances for Work in Process and Finished Goods Inventory.
Required: Solve for the following amounts.
1. Total product cost for last month
2. Unit product cost for last month
3. Total period costs
4. Gross Margin for last month
5. Operating Income for last month
181. What is the difference between a period cost and a product cost?
182. Describe the purpose of the three inventory accounts used by a manufacturer.
40,000 + 35,000 + 52,000 = $127,000
127,000/20,000 = $6.35
17,000 + 12,000 = $29,000
4 & 5.
Sales Revenue (20,000 ´ $18)
360,000
Cost of Goods Sold
127,000
Gross Margin
233,000
Less:
Administrative Expense
12,000
Operating Income
$204,000
183. What is the difference between total manufacturing costs and cost of goods manufactured?
184. List and describe the three categories of manufacturing costs.
185. Explain the difference between an inventoriable cost and a non-inventoriable cost.