Exercise 14-12 (25 minutes)
Account
Balance
Sheet
Income
Statement
Schedule of
COGM
Overhead
Report
Accounts receivable…….……..…….……..
Computer supplies used in office……..
Beginning finished goods inventory...
Ending raw materials inventory…........
Factory maintenance wages................
Income taxes…….…….……..…………..……
Insurance on factory building.…..….....
Exercise 14-13 (25 minutes)
DELRAY MFG.
Schedule of Cost of Goods Manufactured
For Year Ended December 31, 2015
Direct materials
Raw materials inventory, December 31, 2014….................$ 37,000
Raw materials purchases …………………………………….….….. 175,600
Factory overhead
Factory computer supplies used………………………………….. 17,840
Indirect labor…………….………………………………….……………..47,000
Repairs—Factory equipment………………….……..………….…. 5,250
Rent cost of factory building……………………….………….…… 57,000
Total factory overhead costs ………….……….………….………. 127,090
Financial and Managerial Accounting, 6th Edition
Exercise 14-14 (20 minutes)
DELRAY MFG.
Income Statement
For Year Ended December 31, 2015
Sales……………..………………………………..…………………………….. $1,250,000
Cost of goods sold
Finished goods inventory, December 31, 2014….….……....$ 62,750
Operating expenses
Advertising expense………………………………………….………...94,000
General and administrative expenses….……….………….….. 129,300
Exercise 14-15 (25 minutes)
Beck Manufacturing
Schedule of Cost of Goods Manufactured
For Year Ended December 31, 2015
Direct materials……………….…………………………………..…..………….……..$ 46,500
Direct labor ……………….……………….………………..………….………….…….. 27,500
Factory overhead costs……………….……………….…………………………….. 55,000
Total manufacturing costs …………….………………….………….……………. 129,000
Beck Manufacturing
Partial Income Statement
For Year Ended December 31, 2015
Cost of goods sold
Finished goods inventory, December 31, 2014…………………….…….$ 16,000
Cost of goods manufactured…………….………………………….………….. 131,000
Financial and Managerial Accounting, 6th Edition
Exercise 14-16 (15 minutes)
Exercise 14-17 (10 minutes)
Financial and Managerial Accounting, 6th Edition
PROBLEM SET A
Problem 14-1A (45 minutes)
Part 1 Cost classification and amounts
Costs Variable Fixed Product Period
1. Plastic for casing—$17,000…………..…. $17,000 $17,000
2. Wages of assembly workers—$82,000.... 82,000 82,000
staff—$10,000…………..……………….. 10,000 10,000
7. Upper mgmt. salaries—$125,000………. 125,000 125,000
8. Annual flat fee paid for factory
maintenance service—$10,000…….. 10,000 10,000
Part 2
TrueBeat
Calculation of Manufacturing Cost per Drum Set
For Year Ended December 31, 2015
Item
Total cost
(at 1,000 units)
Per unit cost
(Total / 1,000)
Variable production costs
Plastic for casing………………..………….……. $ 17,000 $ 17
Fixed production costs
Property taxes on factory……………………… 5,000 5
Annual fee for maintenance service……….. 10,000 10
Problem 14-1A (continued)
Part 3
If 1,200 drum sets are produced, we would expect the cost of the plastic for
Part 4
If 1,200 drum sets are produced, we would expect the cost of the property
taxes to remain at $5,000 in total because it is a fixed cost. However, the
Financial and Managerial Accounting, 6th Edition
Problem 14-2A (30 minutes)
Costs Product
Cost
Dir.
Mtls.
Dir.
Labor
Over-
head
Period
Cost Selling
Gen. &
Admin
Advertising expense X X
Depr. expense-Office equip. X X
Factory utilities X X
Direct labor X X
Indirect labor X X
Misc. production costs X X
Office salaries expense X X
Problem 14-3A (75 minutes)
Part 1
LEONE COMPANY
Schedule of Cost of Goods Manufactured
For Year Ended December 31, 2015
Direct materials
Raw materials inventory, December 31, 2014..........$ 166,850
Factory overhead
Depreciation expense—Factory equipment….…...... 33,550
Factory supervision……………..……………..……………... 102,600
Factory supplies used…………………………………….….. 7,350
Factory utilities………….………………………………….……. 33,000
Work in process inventory, December 31, 2014………. 15,700
Total cost of work in process………….……………..………. 1,955,030
Less work in process inventory, December 31, 2015 19,380
Cost of goods manufactured……………….…….………….. $1,935,650
Financial and Managerial Accounting, 6th Edition