(2) Direct materials used:
Materials inventory, beginning of year 222,000$
(3) Payments of direct labor payrolls 1,189,000$
(4) Direct labor cost assigned to production 992,000$
(7) Cost of goods sold:
Beginning inventory of finished goods 238,000$
(8) Total inventory:
Materials inventory 126,000$
PROBLEM 16.5A
ANDITON MANUFACTURING (concluded)
b.
Work in process inventory, beginning of year 75,000$
Add: Manufacturing costs assigned to production:
Direct materials used [part a (2) ]2,506,000$
Direct labor 992,000
ANDITON MANUFACTURING CORP.
Schedule of the Cost of Finished Goods Manufactured
For the Year Ended December 31, 20__
35 Minutes, Strong PROBLEM 16.6A
KITCHEN GADGET CO.
a.
Work in process inventory, Jan. 1 3,000$
Add: Manufacturing costs assigned to production:
Direct materials used 333,600$
Direct labor assigned to production 180,000
d. Inventory at December 31:
Finished goods:
KITCHEN GADGET CO.
Schedule of the Cost of Finished Goods Manufactured—Dicer Ricer
For the Year Ended __
PROBLEM 16.6A
KITCHEN GADGET CO. (concluded)
e. Direct labor is a product cost, and therefore, it becomes “attached” to the products
manufactured. To the extent that units manufactured were sold in the same year, the
25 Minutes, Medium PROBLEM 16.7A
IDAHO PAPER COMPANY
a.
Work in process inventory, January 1 40,000$
Add: Manufacturing costs assigned to production:
Direct materials used (1) 335,000$
Direct labor 375,000
IDAHO PAPER CO.
Schedule of the Cost of Finished Goods Manufactured
For the Year Ended December 31, 20__
40 Minutes, Strong PROBLEM 16.8A
RAYMOND ENGINEERING CO.
a.
Manufacturing costs assigned to production:
Direct materials used (1) 135,000$
c.
Net sales 610,600$
Cost of goods sold:
Cost of finished goods manufactured (part a) 383,500$
RAYMOND ENGINEERING CO.
Income Statement
For the Year Ended December 31, 20__
RAYMOND ENGINEERING CO.
Schedule of the Cost of Finished Goods Manufactured
For the Year Ended December 31, 20__
PROBLEM 16.8A
RAYMOND ENGINEERING CO. (concluded)
d.
(
53,000
)
$
166,000
Evaluation of Raymond’s conclusions:
Raymond is in error about the $66.36 unit cost of production and the overall
unprofitability of the business. In concluding that the business sustained a net loss,
Net loss calculated by Raymond
Raymond has made three errors in computing the cost of production. First, he included
selling and administrative expenses in his calculations. These costs do not relate to the
Add: Product costs erroneously deducted as expense
SOLUTIONS TO PROBLEMS SET B
20 Minutes, Easy PROBLEM 16.1B
PINNING, INC.
a. Computations of amounts:
(1) Average per-unit manufacturing cost:
(2) Ending materials inventory:
Direct materials purchased 415,000$
Less: Direct materials used in production 385,000
Materials inventory, end of year 30,000$
(3) Cost of goods sold:
Number of units sold 90
PROBLEM 16.1B
PINNING, INC. (concluded)
b.
1,180,000$
Materials inventory 30,000$
(cost of goods sold) 720,000$
The disposition of the $1,180,000 in manufacturing costs “incurred” during the year is
summarized below:
Comments on deducting manufacturing costs from revenue:
No—the entire $1,180,000 in manufacturing costs is not deducted from the revenue of the
current year. Manufacturing costs are product costs, not period costs. Product costs are
Total manufacturing costs “incurred” during the year
Less: Amounts representing inventory at year-end:
15 Minutes, Easy PROBLEM 16.2B
RIVER QUEEN CORPORATION
a. Total manufacturing costs assigned to work in process:
Direct materials used 800,000$
Direct labor applied to production 1,000,000
Manufacturing overhead 2,000,000
c. Cost of goods sold:
Cost per completed boat 80,000$
Number of completed boats sold × 30
Cost of goods sold (30 units × $80,000 per unit) 2,400,000$
d. Gross profit on sales:
(2) Ending inventory of finished goods:
Cost of finished goods manufactured (b)3,200,000$