198. Arcadia Company manufactures recreational vehicles and incurred the following costs during the current
year.
Required: Classify each cost using the table format given below:
Product Cost
Period Cost
Direct
Materials
Direct
Labor
Overhead
Selling
Expense
Administrative
Expense
1.
Wages of general office personnel
2.
Cost of tires
3.
Factory supervisor’s salary
4.
Conference for marketing personnel
5.
Factory security guards
6.
Research and development
7.
Assembly line workers
8.
Company receptionist
9.
Advertising cost
10.
Cost of shipping vehicles to customers
Product Cost
Period Cost
1.
Wages of general office personnel
X
2.
Cost of tires
X
3.
Factory supervisor’s salary
X
4.
Conference for marketing personnel
X
5.
Factory security guards
X
6.
Research and development
X
7.
Assembly line workers
X
8.
Company receptionist
X
9.
Advertising cost
X
10.
Cost of shipping vehicles to customers
X
199. The Bayou Company makes crab pots. During the current month, direct materials costing $126,000 were
put into production. Direct labor of $78,000 was incurred and overhead equaled $84,000. Selling and
administrative expenses totaled $66,000 for the month and the company manufactured 3,000 crab pots. Assume
there was no beginning inventory and that 2,800 crab pots were sold.
Required:
Compute the per-unit product cost
Compute the per-unit prime cost
Compute the per-unit conversion cost
What is cost of goods sold for the month?
What is the cost of ending finished goods for the month?
200. Ross Company makes handbags. Last month direct materials (leather, thread, zippers, decorative accents)
costing $76,000 were put into production. Ross had 30 workers, each worked 160 hours this month and each
are paid $12 per hour. Overhead equaled $80,000 for the period. Ross Company produced 40,000 handbags as
of the end of the month.
Required: Calculate the total product cost for the month and calculate the cost of one handbag that was
produced.
A.
($126,000 + $78,000 + $84,000)/3,000 = $96
B.
($126,000 + $78,000)/3,000 = $68
C.
($78,000 + $84,000)/3,000 = $54
($96 ´ 2,800) = $268,800
E.
($96 ´ 200) = $19,200
201. Room With A View Company manufactures curtains. Last week, direct materials costing $42,000 were
put into production. Direct labor of $22,000 was incurred and overhead totaled $50,000. By the end of the
week, the company had produced 12,000 curtains.
Required:
1. Calculate the total prime cost for the week.
2. Calculate the per-unit prime cost.
3. Calculate the total conversion cost for the week.
4. Calculate the per-unit conversion cost.
202. 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 of April
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
203. In June, Olympic Company purchased materials costing $38,000, and incurred direct labors 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:
Calculate the cost of direct materials used during June.
Calculate the total manufacturing cost for June.
Calculate the cost of goods manufactured for June.
Calculate cost of goods sold for June.
A.
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
C.
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
D.
Cost of goods manufactured
$107,025
Finished goods, 6/1
2,500
Finished goods, 6/30
(1,775)
Cost of goods sold
$107,750
204. 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:
Prepare a Statement of Cost of Goods Manufactured
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
205. 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:
Compute the total sales revenue.
Compute the gross margin.
Compute the operating income.
Compute the operating income if 75,000 stereos were produced and 69,000 were sold.
A.
75,000 ´ $575 = $43,125,000
B.
Sales revenue
$43,125,000
Cost of goods sold
(75,000 ´ $540)
40,500,000
Gross margin
2,625,000
C.
Gross margin
$ 2,625,000
Selling and admin. expenses
2,000,000
Operating income
625,000
Sales revenue
$39,675,000
Cost of goods sold
(69,000 ´ $540)
37,260,000
Gross margin
2,415,000
Selling and admin. expenses
2,000,000
Operating income
415,000
206. 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
*Cost of goods manufactured
$ 52,000
Finished goods inventory, Jan. 1
7,500
Finished goods inventory, Dec. 31
(6,000)
207. Macon Company supplied the following data and information on inventories at the end of the current year.
January 1, 2011
December 31, 2011
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, 2011
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)
Cost of goods manufactured
$183,500
208. 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
$150,000
Cost of goods sold*
47,100
Gross margin
102,900
Less:
Selling expense
10,000
Administrative expense
25,000
Operating income
$ 67,900
*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
209. 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)
210. 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
Required: 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)
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
211. 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
310,280
Less:
Selling expense
164,160
Administrative expense
63,840
Operating income
$ 82,280
Required:
Calculate the sales revenue percent.
Calculate the cost of goods sold percent.
Calculate the gross margin percent.
Calculate the selling expense percent.
Calculate the administrative expense percent.
Calculate the operating income percent.
A.
912,000/912,000 = 100%
B.
601,920/912,000 = 66%
C.
310,280/912,000 = 34%
D.
164,160/912,000 = 18%
E.
63,840/912,000 = 7%
82,280/912,000 = 9%