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Title: Exercise 19-8
QA_Ori:
1. Raw Materials Inventory...................................................210,000
Cash........................................................................... 210,000
To record materials purchases.
Title: Exercise 19-9
QA_Ori:
1. Factory Payroll.................................................................345,000
Cash........................................................................... 345,000
To record factory payroll.
Title: Exercise 19-10
QA_Ori:
1. Factory Overhead.............................................................120,000
Other Accounts........................................................... 120,000
To record other factory overhead.
Computed as: 70% Predetermined overhead rate x
Direct labor of $265,000
QA_Edit:
Title: Exercise 19-11
QA_Ori:
Cost of Goods Sold..........................................................29,500
QA_Edit:
Title: Exercise 19-12
QA_Ori:
Factory Overhead 3,200
QA_Edit:
Title: Exercise 19-13
QA_Ori:
a. Raw Materials Inventory 90,000
b. Goods in Process Inventory 36,500
c. Factory Payroll 50,000
c.
Factory Overhead 12,000
d. Factory Overhead 11,475
e. Goods in Process Inventory 47,500
f. Finished Goods Inventory 56,800
g. Cost of Goods Sold 56,800
Accounts Receivable 82,000
h. Factory Overhead* 3,000
QA_Edit:
Title: Exercise 19-14
QA_Ori:
1. Predetermined overhead rate
2. & 3.
Overhead
4.
Dec. 31 Factory Overhead.............................................................10,500
Title: Exercise 19-15
QA_Ori:
1. Predetermined overhead rate
2. & 3.
Factory Overhead
4.
Dec. 31 Cost of Goods Sold..........................................................8,000
Title: Exercise 19-16
QA_Ori:
1. Overhead rate = Total overhead costs / Total direct labor costs
= $1,800,000 / $3,000,000 = 60%
2.
3.
Total cost of finished goods inventory........................................ $490,000
QA_Edit:
Title: Exercise 19-17
QA_Ori:
1. Overhead rate = Total estimated overhead cost_
Total estimated direct labor cost
2. Cost of the two ending inventories
Goods in Process Finished Goods
Cost
per Unit Units
Total
Cost
Cost
per Unit Units
Total Cost
Direct materials..............$10.00 5,000 $ 50,000 $12.00 12,000 $144,000
3.
Step 1
Cost of goods manufactured
Direct materials cost.............................................................................$ 535,000
Direct labor cost................................................................................... 290,000
Step 2
Cost of goods sold
Beginning finished goods.....................................................................$ 0
Title: Exercise 19-18
QA_Ori:
1. Estimated cost of the architectural job
Labor type
Estimated
hours Hourly rate Total cost
Architects............................................150 $300 $ 45,000
2. Frey should first determine an estimated selling price, based on its cost and
desired profit for this job.
This $293,125 price may or may not be its bid. It must consider past
a How accurate are its estimates of costs? If costs are understated, the bid
b How accurate is the estimate of the competition’s probable bidding range?
c Is it willing to meet the expected low bid of the competition? In the
There is no exact answer to these questions, but Frey must consider these
and other factors before it submits the bid.
QA_Edit:
Title: Exercise 19-19
QA_Ori:
(1)
Raw Materials Inventory...................................................3,108
* The amount of raw materials used in production is computed from the Raw Materials
Inventory account. Beginning balance plus purchases minus ending balance equals raw
materials used in production, or (in millions), €83 + €3,108 - €85 = €3,106.
(2)
The amount of materials purchased is almost equal to the amount of
QA_Edit:
