2-12 Introduction to Managerial Accounting, 6th edition
Problem 2-25B (continued)
Rent Expense
Cost of Goods Sold
(h)
17,000
(l)
530,000
Sales
(l)
1,100,000
3.
Mariya Company
Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning ……………….
$ 23,000
Add: Purchases of raw materials ……………………
145,000
Materials available for use …………………………...
168,000
Deduct: Raw materials inventory, ending ………..
27,000
Materials used in production …………………………
$141,000
Direct labor …………………………………………………
223,000
Manufacturing overhead applied to work in
process ……………………………………………………
197,400
Total manufacturing cost ……………………………….
561,400
Add: Work in process, beginning ……………………..
24,000
585,400
Deduct: Work in process, ending ……………………..
30,400
Cost of goods manufactured …………………………..
$555,000
4.
Cost of Goods Sold ……………………………………
3,400
Manufacturing Overhead………………………..
3,400
Schedule of cost of goods sold:
Finished goods inventory, beginning …………..
$ 34,000
Add: Cost of goods manufactured ………………
555,000
Cost of goods available for sale …………………
589,000
Deduct: Finished goods inventory, ending ……
59,000
Unadjusted cost of goods sold …………………..
530,000
Add: Underapplied overhead …………………….
3,400
Adjusted cost of goods sold ………………………
$533,400
2-14 Introduction to Managerial Accounting, 6th edition
Problem 2-25B (continued)
5.
Mariya Company
Income Statement
Sales ………………………………………………….
$1,100,000
Cost of goods sold …………………………………
533,400
Gross margin ……………………………………….
566,600
Selling and administrative expenses:
Salaries expense …………………………………
$143,000
Advertising expense …………………………….
128,000
Depreciation expense …………………………..
12,900
Rent expense …………………………………….
17,000
Miscellaneous expense …………………………
11,000
311,900
Net operating income …………………………….
$ 254,700
6.
Direct materials …………………………………………………….
$ 3,900
Direct labor (400 hours × $14 per hour) …………………….
5,600
Manufacturing overhead cost applied (140% × $3,900) …
5,460
Total manufacturing cost ………………………………………..
14,960
Add markup (65% × $14,960) …………………………………
9,724
Total billed price of Job 521 …………………………………….
$24,684
Problem 2-26B (30 minutes)
1. Preparation Department:
The estimated total manufacturing overhead cost in the Preparation
Estimated fixed manufacturing overhead ………………
$207,500
Estimated variable manufacturing overhead:
$3.00 per MH × 83,000 MHs …………………………...
249,000
Estimated total manufacturing overhead cost …………
$456,500
The predetermined overhead rate is computed as follows:
Estimated total manufacturing overhead ……
$456,500
÷ Estimated total machine-hours …………….
83,000
MHs
= Predetermined overhead rate ………………
$5.50
per MH
Estimated fixed manufacturing overhead ………………
$518,700
Estimated variable manufacturing overhead:
$5.00 per DLH × 57,000 DLHs ………………………….
285,000
Estimated total manufacturing overhead cost …………
$803,700
Estimated total manufacturing overhead ……
÷ Estimated total machine-hours …………….
DLHs
= Predetermined overhead rate ………………
per DLH
units
per unit
Preparation
Manufacturing overhead cost incurred …..
Manufacturing overhead cost applied:
Underapplied (or overapplied) overhead ..
$(35,900)
Problem 2-26B (continued)
2.
Preparation Department overhead applied:
360 machine-hours × $5.50 per machine-hour …..
$1,980
Fabrication Department overhead applied:
133 direct labor-hours × $14.10 per labor-hour ….
1,875
Total overhead cost ………………………………………..
$3,855
3. Total cost of Job 135:
Preparation
Fabrication
Total
Direct materials …………….
$ 940
$1,120
$2,060
Direct labor ………………….
690
970
1,660
Manufacturing overhead …
1,980
1,875
3,855
Total cost ……………………
$3,610
$3,965
$7,575
Problem 2-27B (45 minutes)
1.
a.
Raw Materials ………………………………….
164,000
Accounts Payable …………………………
164,000
b.
Work in Process …………………………..…..
127,000
Manufacturing Overhead ……………………
18,000
Raw Materials ……………………………..
145,000
c.
Work in Process …………………………..…..
94,000
Manufacturing Overhead ……………………
38,800
Sales Commissions Expense ……………….
25,000
Salaries Expense ………………………………
44,000
Salaries and Wages Payable …………..
201,800
d.
Manufacturing Overhead ……………………
13,900
Insurance Expense…………………………...
4,600
Prepaid Insurance ………………………..
18,500
e.
Manufacturing Overhead ……………………
16,000
Accounts Payable …………………………
16,000
f.
Advertising Expense ………………………….
11,000
Accounts Payable …………………………
11,000
g.
Manufacturing Overhead ……………………
16,000
Depreciation Expense ………………………..
4,000
Accumulated Depreciation ……………..
20,000
h.
Work in Process …………………………..…..
88,800
Manufacturing Overhead ……………….
88,800
Predetermined
overhead rate
=
Estimated total manufacturing overhead cost
Estimated amount of the allocation base
Predetermined
overhead rate
=
$108,000
=
$2.40 per MH
45,000 MHs
37,000 actual MHs × $2.40 per MH= $88,800 applied.
Bal.
(j)
287,000
(b)
(h)
(i)
288,000
(c)
38,800
(d)
13,900
(e)
(g)
Bal.
Bal.
13,900
(j)
287,000
Cost of Goods Sold ……………………………….
Manufacturing Overhead ……………………
Problem 2-27B (continued)
i.
Finished Goods …………………………….
288,000
Work in Process ……………………….
288,000
j.
Accounts Receivable ………………………
519,000
Sales ……………………………………..
519,000
Cost of Goods Sold ………………………..
287,000
Finished Goods ………………………..
287,000
2.
Raw Materials
Work in Process
Bal.
10,800
(b)
145,000
Bal.
4,800
(i)
288,000
(a)
164,000
(b)
127,000
(c)
94,000
(h)
88,800
Bal.
29,800
Bal.
26,600
Problem 2-27B (continued)
4.
Carpenter Cornices, Ltd.
Income Statement
For the Year Ended June 30
Sales ……………………………………………………..
$519,000
Cost of goods sold ($287,000 + $13,900) ………
300,900
Gross margin ……………………………………………
218,100
Selling and administrative expenses:
Sales commissions ………………………………….
$25,000
Administrative salaries ……………………………..
44,000
Insurance expense ………………………………….
4,600
Advertising expenses……………………………….
11,000
Depreciation expense ………………………………
4,000
88,600
Net operating income ………………………………..
$129,500
Bal.
(k)
250,000
Bal.
(f)
(j)
Bal.
76,000
Bal.
Bal.
510,000
Bal.
(e)
Bal.
233,000
(b)
(i)*
112,500
(m)
141,000
Bal.
(c)
(a)
82,000
(d)
(d)
14,000
(e)
(g)
(f)
(h)
(h)
17,800
Bal.
Bal.
86,800
Problem 2-28B (60 minutes)
1. and 2.
Cash
Accounts Receivable
Bal.
13,000
(c)
245,500
Bal.
45,000
(l)
415,000
(l)
415,000
(m)
141,000
(k)
530,000
Bal.
41,500
Bal.
160,000
Raw Materials
Work in Process
Bal.
38,000
(b)
93,000
Bal.
30,000
(j)
281,000
(a)
82,000
(b)
87,400
(c)
125,000
(i)
112,500
Bal.
27,000
Bal.
73,900
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Solutions Manual, Problems Set B 2-21
$125,000 actual direct labor cost × 0.90 = $112,500 applied.
2-22 Introduction to Managerial Accounting, 6th edition
Problem 2-28B (continued)
Retained Earnings
Capital Stock
Bal.
173,300
Bal.
230,000
Salaries Expense
Depreciation Expense
(c)
71,000
(e)
4,200
Insurance Expense
Shipping Expense
(f)
1,200
(g)
41,000
Cost of Goods Sold
Sales
(k)
250,000
(k)
530,000
3. Manufacturing overhead was overapplied by $3,400 for the year. The
Manufacturing Overhead …………………………
3,400
Cost of Goods Sold …………………………….
3,400
4.
Brinkerhoff, Inc.
Income Statement
For the Year Ended December 31
Sales ……………………………………………………
$530,000
Cost of goods sold ($250,000 – $3,400) ……….
246,600
Gross margin ………………………………………….
283,400
Selling and administrative expenses:
Salaries expense …………………………………..
$71,000
Depreciation expense …………………………….
4,200
Insurance expense ………………………………..
1,200
Shipping expense ………………………………….
41,000
117,400
Net operating income ………………………………
$166,000