Chapter 18 – Managerial Accounting Concepts and Principles
Exercise 18-12 (25 minutes)
Account
Balance
Sheet
Income
Statement
Schedule of
COGM
Overhead
Report
Cash……….……………….………..…..….…....
Depreciation expense—Factory
building…………………………...…..…..…..
Depreciation expense—Office
building…………………………...…..…..…..
Insurance on factory building..….….....
Property taxes on factory building......
Raw materials purchases….…..….….....
Sales…..………..…………………………………
Exercise 18-13 (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
Direct materials used ……………………………………………..…… $169,900
18-1011
Education.
Chapter 18 – Managerial Accounting Concepts and Principles
Direct labor………………………………………………………………….… 225,000
Factory overhead
Rent cost of factory building……………….….…………………… 57,000
Total factory overhead costs ………………………………………. 127,090
Total manufacturing costs ………………………………………….…. 521,990
18-1012
Chapter 18 – Managerial Accounting Concepts and Principles
Exercise 18-14 (20 minutes)
DELRAY MFG.
Income Statement
For Year Ended December 31, 2015
Sales……………………………………………………………………….…….. $1,250,000
Cost of goods sold
Less finished goods inventory, December 31, 2015..…........ 67,300
Cost of goods sold………………………………………………………. 529,840
Gross profit……………………………………………………………………. 720,160
Exercise 18-15 (25 minutes)
Beck Manufacturing
Schedule of Cost of Goods Manufactured
For Year Ended December 31, 2015
Direct materials……………………………………………………….……………….… $ 46,500
Direct labor ……………………………………………………………………………….. 27,500
Less work in process, December 31, 2015…………………………………... 12,000
Cost of goods manufactured……………………………………..……………….. $131,000
18-1013
Education.
Chapter 18 – Managerial Accounting Concepts and Principles
Beck Manufacturing
Partial Income Statement
For Year Ended December 31, 2015
Cost of goods sold
Finished goods inventory, December 31, 2014………….…………….…$ 16,000
Cost of goods manufactured…………………………………..……………….. 131,000
Chapter 18 – Managerial Accounting Concepts and Principles
Direct materials used
in production
$502,500
Factory overhead
used in production
$750,000
Ending raw
materials inventory
$175,000
Beginning raw
materials inventory
$145,500
Raw materials available
for use in production
$677,500
Raw materials
purchases
$532,000
Production
Activity
Sales
Activity
Materials
Activity
Direct labor used
in production
$350,000
Ending work in
process inventory
$93,500
Total work in
process
$1,687,000
Beginning work in
process inventory
$84,500
Ending finished
goods inventory
$139,950
Finished goods sold
$1,600,300
Beginning finished
goods inventory
$146,750
Finished goods
available for sale
$1,740,250
Finished goods
manufactured
$1,593,500
18-1015
Chapter 18 – Managerial Accounting Concepts and Principles
Exercise 18-17 (10 minutes)
PROBLEM SET A
Problem 18-1A (45 minutes)
Part 1 Cost classification and amounts
Costs Variable Fixed Product Period
1. Plastic for casing—$17,000…………..…. $17,000 $17,000
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—$10,000…….. 10,000 10,000
Part 2
TrueBeat
Calculation of Manufacturing Cost per Drum Set
For Year Ended December 31, 2015
Item
Total cost
(at 1,000 units)
Per unit cost
(Total / 1,000)
Variable production costs
18-1016
Chapter 18 – Managerial Accounting Concepts and Principles
Total variable production costs 125,000 125
Fixed production costs
Property taxes on factory 5,000 5
18-1017
Chapter 18 – Managerial Accounting Concepts and Principles
Problem 18-1A (continued)
Part 3
If 1,200 drum sets are produced, we would expect the cost of the plastic for
Part 4
If 1,200 drum sets are produced, we would expect the cost of the property
cost will decrease as production increases.
Problem 18-2A (30 minutes)
Costs Product
Cost
Dir.
Mtls.
Dir.
Labo
r
Over-
head
Period
Cost Sellin
g
Gen. &
Admin
Advertising expense X X
Depr. expense-Office equip. X X
Depr. expense-Selling equip. X X
Depr. expense-Factory equip. X X
Factory supervision X X
18-1018
Chapter 18 – Managerial Accounting Concepts and Principles
Rent expense-Selling space X X
Problem 18-3A (75 minutes)
Part 1
LEONE COMPANY
Schedule of Cost of Goods Manufactured
For Year Ended December 31, 2015
Direct materials
Raw materials inventory, December 31, 2014..........$ 166,850
Raw materials purchases………………………….………… 925,000
Factory overhead
Depreciation expense—Factory equipment..…........ 33,550
Factory supervision………………………………..….………. 102,600
Factory supplies used………………………….…………….. 7,350
Factory utilities…………………………………………………… 33,000
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
18-1019
18-1020