135. Williams Company reports production costs for 2015 as follows:
Direct materials used
$345,000
Direct labor incurred
250,000
Factory overhead incurred
400,000
Operating expenses
175,000
Williams Company’s period costs for 2015 amount to:
136. Williams Company reports production costs for 2015 as follows:
Direct materials used
$345,000
Direct labor incurred
250,000
Factory overhead incurred
400,000
Operating expenses
175,000
Williams Company’s product costs for 2015 amount to:
137. Costs which are reported on the income statement as part of cost of goods sold are referred to as:
138. Costs on the income statement for both a merchandiser and a manufacturer would include:
139. Cost of goods sold for a manufacturer equals cost of goods manufactured plus:
140. Cost of goods manufactured is equal to:
141. Finished goods inventory is reported on the:
142. Beginning work in process is equal to:
143. All of the following would be reported on the balance sheet as a current asset except:
144. Reedy Company reports the following information for 2012:
Cost of goods manufactured
$68,250
Direct materials used
27,000
Direct labor incurred
25,000
Work in process inventory, January 1, 2012
11,000
Factory overhead is 75% of the cost of direct labor. Work in process inventory on December 31, 2012, is:
145. At the beginning of 2011, the Gilbert Company’s work in process inventory account had a balance of
$30,000. During 2011, $68,000 of direct materials were used in production, and $66,000 of direct labor costs
were incurred. Factory overhead in 2011 amounted to $90,000. Cost of goods manufactured is $230,000 in
2011. The balance in work in process inventory on December 31, 2011, is:
146. A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and $114,000 in factory
overhead costs during the period. If beginning and ending work in process inventories were $28,000 and
$32,000 respectively, the cost of goods manufactured was:
147. Cost of goods manufactured during 2011 is $240, work in process inventory on December 31, 2011, is
$50. Work in process inventory during 2011 decreased by 60%. Total manufacturing costs incurred during
2011 amount to:
148. Work in process inventory on December 31, 2011, is $44,000. Work in process inventory increased by
60% during 2011. Cost of goods manufactured for 2011 amounts to $275,000. What are the total manufacturing
costs incurred in 2011?
149. Work in process inventory on December 31, 2011, is $42,000. Work in process inventory decreased by
40% during 2011. Total manufacturing costs incurred in 2011 amount to $260,000. What is cost of goods
manufactured?
150. Work in process inventory increased by $20,000 during 2011. Cost of goods manufactured was
$180,000. Total manufacturing costs incurred in 2011 are:
151. The cost of goods sold for Heedy manufacturing in 2011 was $233,000. The January 1, 2011, finished
goods inventory balance was $31,600, and the December 31, 2011, finished goods inventory balance was
$24,200. Cost of goods manufactured during the period was:
152. The Sharpe Company reports the following information for 2015:
Sales
$76,500
Direct materials used
7,300
Depreciation on factory equipment
4,700
Indirect labor
5,900
Direct labor
10,500
Factory rent
4,200
Factory utilities
1,200
Sales salaries expense
15,600
Office salaries expense
8,900
Indirect materials
1,200
Determine product costs for 2015.
153. The Sharpe Company reports the following information for 2015:
Sales
$76,500
Direct materials used
7,300
Depreciation on factory equipment
4,700
Indirect labor
5,900
Direct labor
10,500
Factory rent
4,200
Factory utilities
1,200
Sales salaries expense
15,600
Office salaries expense
8,900
Indirect materials
1,200
Determine period costs for 2015.
154. The aspects of the management process are listed below. Match each phase to the appropriate description.
_____ Planning
_____ Directing
_____ Controlling
_____ Improving
_____ Decision making
a) Used by managers for continuous improvement
b) Managers must decide how to respond to unfavorable performances
c) Used by management to develop the organization’s objectives and goals
d) Monitoring the operating results of implemented plans and comparing actual results
e) Managers run their day to day activities
155. Identify the following costs as (a) direct materials, (b) direct labor, or (c) factory overhead for a cake
manufacturer.
1. _____ Frosting
2. _____ Depreciation on oven
3. _____ Wages of bakers
4. _____ Sprinkles for topping
156. Identify the following costs as (a) prime cost, (b) conversion cost, (c) or both for a cake factory.
1. _____ Frosting
2. _____ Wages of the baker
3. _____ Sprinkles for the topping (considered an indirect material)
4. _____ Depreciation on oven
157. Identify the following costs as a (a) product cost or (b) period cost for a cake factory.
1. _____ Frosting
2. _____ Baker’s wages
3. _____ Advertising fees
4. _____ Transportation out
158. The Zoe Corporation has the following information for the month March. Determine the (a) cost of goods
manufactured, and (b) cost of goods sold.
Cost of materials placed in production
$69,000
Direct labor
27,000
Factory overhead
34,000
Work in process, March 1
15,000
Work in process, March 31
19,500
Finished goods inventory, March 1
25,000
Finished goods inventory, March 31
23,000
Work in process inventory, March 1
$15,000
Cost of materials placed in production
$69,000
Direct labor
27,000
Factory overhead
34,000
Total manufacturing costs added
130,000
Total manufacturing costs
145,000
Less: Work in process inventory, March 31
19,500
Cost of goods manufactured
125,500
Finished goods inventory, March 1
$25,000
Cost of goods manufactured
125,500
Cost of finished goods available for sale
150,500
Less: Finished good inventory, March 31
23,000
Cost of goods sold
127,500
159. Sienna Company has the following information for January.
Cost of materials placed in production
$20,000
Direct labor
15,000
Factory overhead
24,000
Work in process inventory, January 1
2,900
Work in process inventory, January 31
3,500
Show your calculations to find the cost of goods manufactured.
160. Magnus Industries has the following data:
Beginning Raw Materials Inventory
$75,000
Materials purchased
$40,000
Ending Raw Materials Inventory
$60,000
161. Watson Company has the following data:
Work in Process, Beginning
$18,000
Work in Process, Ending
$25,000
Direct Labor costs incurred
$5,000
Cost of Goods Manufactured
$9,000
Factory Overhead
$7,000
Work in process inventory, January 1
$2,900
Cost of materials placed in production
$20,000
Direct labor
15,000
Factory overhead
24,000
Total manufacturing costs incurred
59,000
Total manufacturing costs
61,900
Less: Work in process inventory, January 31
3,500
Cost of goods manufactured
$58,400
162. Laramie Technologies had the following data:
Cost of Materials Used $50,000
Direct Labor costs $56,000
Factory Overhead $28,000
Work in Process, beg. $45,000
Work in Process, end. $32,000
163. Keeton Company had the following data:
Cost of Materials Used $60,000
Direct Labor costs $58,000
Factory Overhead $33,000
Work in Process, beg. $29,000
Work in Process, end. $18,000
Finished Goods,beg. $32,000
Finished Goods, end. $18,000
164. The Zoe Corporation has the following information for the month of March. Prepare a (a) schedule of cost
of goods manufactured, (b) an income statement for the month ended March 31, and (c) prepare only the
inventory section of the balance sheet.
Purchases
$92,000
Materials inventory, March 1
6,000
Materials inventory, March 31
8,000
Direct labor
25,000
Factory overhead
37,000
Work in process, March 1
22,000
Work in process, March 31
23,500
Finished goods inventory, March 1
21,000
Finished goods inventory, March 31
30,000
Sales
257,000
Sales and administrative expenses
79,000
Zoe Corporation
Statement of Cost of Goods Manufactured
For Month Ended March 31, 20xx
Work in process inventory March 1
$22,000
Direct Materials:
Materials inventory, March 1
$6,000
Purchases
92,000
Cost of materials for use
98,000
Less materials inventory, March 31
8,000
Cost of materials placed in production
90,000
Direct Labor
25,000
Factory overhead
37,000
Total manufacturing costs added
152,000
Total manufacturing costs
174,000
Less work in process inventory, March 31
23,500
Cost of goods manufactured
$150,500
Zoe Corporation
Income Statement
For Month Ended March 31, 20xx
Sales
$257,000
Cost of goods sold:
Finished goods inventory, March 1
$21,000
Cost of goods manufactured
150,500
Cost of finished goods available for sales
171,500
Less finished goods inventory, March 31
30,000
Cost of goods sold
141,500
Gross Profit
115,500
165. The following data (in thousands of dollars) have been taken from the accounting records of Rayburn
Corporation for the current year.
Sales
$1,980
Selling expenses
280
Manufacturing overhead
460
Direct labor
400
Administrative expenses
300
Purchases of raw materials
240
Finished goods inventory, beginning
240
Finished goods inventory, ending
320
Raw materials inventory, beginning
80
Raw materials inventory, ending
140
Work in process inventory, beginning
140
Work in process inventory, ending
100
Required: (Present all reports and calculations in thousands of dollars)
(a) What was the cost of the raw materials used in production during the year?
(b) What was the cost of goods manufactured (finished) for the year?
(c) What was the cost of goods sold for the year?
(d) What was the net income for the year?
Raw materials inventory, beginning
$ 80
Purchases of raw materials
240
Less raw materials inventory, ending
(140)
Raw materials used in production
$180
Raw materials used in production
$ 180
Direct labor
400
Manufacturing overhead
460
Total manufacturing costs
1,040
Work in process inventory, beginning
140
1,180
Less: work in process inventory, ending
(100)
Cost of goods manufactured
$1,080
Finished goods inventory, beginning
$ 240
Cost of goods manufactured
1,080
Less finished goods inventory, ending
(320)
Cost of goods sold
$1,000
Sales
$1,980
Cost of goods sold
1,000
Gross profit
980
Selling expenses
280
(580)
166. Differentiate between:
a) direct materials versus indirect materials
b) direct labor versus indirect labor
167. Classify the following costs as direct, indirect, or neither:
a)
indirect labor incurred
b)
factory equipment depreciation
c)
indirect materials used
d)
office equipment depreciation
e)
direct materials used
f)
insurance expired on administrative facilities
g)
direct labor incurred
h)
administrative office salaries
i)
salespersons’ salaries
j)
utilities on factory building
k)
utilities on administrative facilities
168. Use the correct number to designate each item below:
1) direct materials
2) selling and administrative expense
3) factory overhead
4) direct labor
a)
rent expense on factory building
b)
sales supplies used
c)
factory supplies used
d)
indirect materials used
e)
wages of assembly line personnel
f)
cost of primary material used to make product
g)
depreciation on office equipment
h)
rent on office facilities
i)
insurance expired on factory equipment
j)
utilities incurred in the office
k)
advertising expense
169. The Sharpe Company reports the following information for 2012:
Sales
$76,500
Direct materials used
7,300
Depreciation on factory equipment
4,700
Indirect labor
5,900
Direct labor
10,500
Factory rent
4,200
Factory utilities
1,200
Sales salaries expense
15,600
Office salaries expense
8,900
Indirect materials
1,200
Compute:
a) product costs
b) period costs
170. Allen Company used $71,000 of direct materials and incurred $37,000 of direct labor costs during
2011. Indirect labor amounted to $2,700 while indirect materials used totaled $1,600. Other operating costs
pertaining to the factory included utilities of $3,100; maintenance of $4,500; supplies of $1,800; depreciation of
$7,900; and property taxes of $2,600. There was no beginning or ending finished goods inventory, but work in
process inventory began the year with a $5,500 balance and ended the year with a $7,500 balance.
Prepare a statement of cost of goods manufactured.
Beginning work in process
$ 5,500
Direct materials used
$71,000
Direct labor incurred
37,000
Factory overhead
Indirect labor
$2,700
Indirect materials
1,600
Utilities
3,100
Maintenance
4,500
Supplies
1,800
Depreciation
7,900
Property taxes
2,600
24,200
Total manufacturing costs incurred
132,200
Total manufacturing costs
137,700
Less ending work in process inventory
(7,500)
Cost of goods manufactured
$130,200
171. The following information is available for Carter Corporation for 2012:
1) Materials inventory decreased $4,000 during 2012.
2) Materials inventory on December 31, 2012, was 50% of materials inventory on January 1, 2012.
3) Beginning work in process inventory was $145,000.
4) Ending finished goods inventory was $65,000.
5) Purchases of direct materials were $154,700.
6) Direct materials used were 2.5 times the cost of direct labor.
7) Total manufacturing costs incurred were $246,400, 80% of cost of goods manufactured and $156,000 less
than cost of goods sold.
Compute:
a) finished goods inventory on January 1, 2012
b) work in process inventory on December 31, 2012
c) direct labor incurred
d) factory overhead incurred
e) direct materials used
f) materials inventory on January 1, 2012
g) materials inventory on December 31, 2012
Note to students: The answers are not necessarily calculated in alphabetical order.
172. Rosalba Manufacturing Company had the following account balance for 2012:
January 1
December 31
Accounts receivable
$27,000
$33,000
Materials inventory
22,500
6,000
Work in process inventory
70,200
48,000
Finished goods inventory
3,000
15,000
Collections on account were $625,000 in 2012.
Cost of goods sold was 68% of sales.
Direct materials purchased amounted to $90,000.
Factory overhead was 300% of the cost of direct labor.
Compute:
a) sales revenue (all sales were on account)
b) cost of goods sold
c) cost of goods manufactured
d) direct labor incurred
e) direct materials used
f) factory overhead incurred
173. Sineath Industries had a fire and some of its accounting records were destroyed. Available information is
presented below for the year ended December 31, 2011.
Materials inventory, December 31, 2011
$15,000
Direct materials purchased
28,000
Direct materials used
22,900
Cost of goods manufactured
135,000
Additional information is as follows:
Factory overhead is 150% of direct labor cost.
Finished goods inventory decreased by $18,000 during the year.
Work in process inventory increased by $12,000 during the year.
Calculate:
a) materials inventory, January 1, 2011
b) direct labor cost
c) factory overhead incurred
d) cost of goods sold
174. Classify the following costs as either a product cost or a period cost:
a)
direct materials used
b)
factory utilities
c)
salespersons’ commissions
d)
salary of plant manager
e)
indirect materials used
f)
depreciation on store equipment
g)
indirect labor incurred
h)
advertising expense
i)
direct labor incurred
j)
factory machinery repairs and maintenance
k)
_____________
depreciation on factory machinery
l)
plant insurance expired
175. Differentiate between financial and managerial accounting, addressing such issues as what reports are
generated, when, and for whom.
Managerial Accounting
Financial Accounting
Users
Internal managers
External investors, creditors, government
Reports
Detailed reports, not restricted by GAAP
Summary reports, restricted by GAAP
Timing
Future orientation
Past orientation