DO IT! 1-3
FISHEL COMPANY
Cost of Goods Manufactured Schedule
For the Month Ended April 30
Work in process, April 1 ………………………….. $ 5,000
Direct materials ……………………………………….
Raw materials, April 1 …………………………. $ 10,000
Raw materials purchases …………………….. 98,000
DO IT! 1-4
1. f
2. a
SOLUTIONS TO EXERCISES
EXERCISE 1-1
users.
2. True.
3. False. Preparation of budgets is part of managerial accounting.
manufacturing companies.
5. True.
needed.
7. True.
8. True.
9. False. Financial accounting reports must comply with generally accepted
accounting principles.
EXERCISE 1-2
1. (b) Direct labor.*
2. (c) Manufacturing overhead.
3. (c) Manufacturing overhead.
4. (c) Manufacturing overhead.
*or sometimes (c), depending on the circumstances
EXERCISE 1-3
(a)
Materials used in product …… DM
Advertising expense ………….. Period
Depreciation on plant ………. MOH
Property taxes on plant ………… MOH
Property taxes on store ….. Period
Delivery expense ……………….. Period
Labor costs of assembly
line workers ……………………… DL
Sales commissions ……………. Period
Salaries paid to sales clerks … Period
Factory supplies used ……… MOH
as an expense when incurred.
EXERCISE 1-4
(a) Factory utilities …………………………………………………………….. $ 15,500
Depreciation on factory equipment ……………………………….. 12,650
Indirect factory labor …………………………………………………….. 48,900
Indirect materials ………………………………………………………….. 80,800
(b) Direct materials ……………………………………………………………. $137,600
(c) Depreciation on delivery trucks …………………………..………… $ 3,800
Sales salaries ………………………………………………………………. 46,400
EXERCISE 1-5
1.
2.
3.
4.
(a)
(c)
5.
6.
(b)*
(d)
7.
8.
(a)
(b)
9.
10.
(c)
(c)
*or sometimes (c), depending on the circumstances.
EXERCISE 1-6
1. (b)
2. (c)
3. (a)
4. (c)
EXERCISE 1-7
(a) Delivery service (product) costs:
Indirect materials
$ 5,400
Depreciation on delivery equipment
11,200
Dispatcher’s salary
5,000
Gas and oil for delivery trucks
2,200
Drivers’ salaries
16,000
Delivery equipment repairs
300
Total
$40,100
(b) Period costs:
Property taxes on office building
$ 870
CEO’s salary
12,000
Advertising
3,600
Office supplies
650
Office utilities
990
Repairs on office equipment
180
Total
$18,290
EXERCISE 1-8
(a) Work-in-process, 1/1 …………………………. $ 12,000
Direct materials used ………………………… $120,000
Direct labor ………………………………………. 110,000
Manufacturing overhead
Depreciation on plant ………………….. $60,000
(b) Finished goods, 1/1 …………………………... $ 60,000
Cost of goods manufactured …………….. 323,500
EXERCISE 1-9
Total raw materials available for use:
Direct materials used ………………………………………………. $190,000
Raw materials inventory (1/1):
Total raw materials available for use:
Direct materials used ………………………………………………. $190,000
Add: Raw materials inventory (12/31) ……………………… 22,500
Total cost of work in process:
Cost of goods manufactured ……………………………………. $530,000
EXERCISE 1-9 (Continued)
Total manufacturing costs:
Total cost of work in process …………………………... $611,000
Direct labor:
Total manufacturing costs ……………………………….. $401,000
EXERCISE 1-10
A + $57,000 + $46,500 = $195,650 $252,500 – $11,000 = F
A = $92,150 F = $241,500
$195,650 + B = $221,500 $130,000 + G + $102,000 = $253,700
B = $25,850 G = $21,700
Additional explanation to EXERCISE 1-10 solution:
Case A
(a) Total manufacturing costs ……………………………….. $195,650
EXERCISE 1-10 (Continued)
(b) Total cost of work in process …………………………... $221,500
(c) Total cost of work in process …………………………... $221,500
Case B
(d) Direct materials used ………………………………………. $ 68,400
(e) Total manufacturing costs ……………………………….. $236,000
(f) Total cost of work in process …………………………... $252,500
Case C
(g) Total manufacturing costs ……………………………….. $253,700
(h) Total cost of work in process …………………………... $337,000
(i) Total cost of work in process …………………………... $337,000
EXERCISE 1-11
(a) (a) $127,000 + $140,000 + $87,000 = $354,000
(b) $354,000 + $33,000 – $360,000 = $27,000
(c) $450,000 – ($200,000 + $132,000) = $118,000
(b) COLAW COMPANY
Cost of Goods Manufactured Schedule
For the Year Ended December 31, 2014
Work in process, January 1 …………………………. $ 33,000
Direct materials …………………………………………… $127,000
Direct labor …………………………..…………………….. 140,000
EXERCISE 1-12
(a) CEPEDA CORPORATION
Cost of Goods Manufactured Schedule
For the Month Ended June 30, 2014
Work in process, June 1……………………….. $ 3,000
Manufacturing overhead
Indirect labor ………………………………… $4,500
Factory manager’s salary ………………. 3,000
Total manufacturing overhead ….. 13,300
Total manufacturing costs ……………………. 73,300
(b) CEPEDA CORPORATION
Income Statement (Partial)
For the Month Ended June 30, 2014
Sales revenue ………………………………………………… $92,100
Cost of goods sold
Finished goods inventory, June 1 …………….. $ 5,000
Cost of goods manufactured [from (a)] ……….. 72,500
EXERCISE 1-13
(a)
MARKS CONSULTING
Schedule of Cost of Contract Services Provided
For the Month Ended August 31, 2014
Supplies used (direct materials) ……………………………..
$ 1,200
Salaries of professionals (direct labor) ……………………
15,600
Service overhead:
Utilities for contract operations ………………………….
$1,400
Contract equipment depreciation ……………………….
900
Insurance on contract operations ………………………
800
Janitorial services for professional offices ………….
400
Total overhead …………………………………………….
3,500
Cost of contract services provided …………………….
$20,300
the income statement under administrative expenses.
EXERCISE 1-14
(a) Work-in-process, 1/1 ………………………… $ 13,500
Direct materials
Materials inventory, 1/1 ………………. $ 21,000
Materials purchased …………………… 150,000