PROBLEM 1-5A (Continued)
(b) PHILLIPS COMPANY
Income Statement
For the Month Ended October 31, 2014
Sales revenue …………………………………………… $780,000
Cost of goods sold
Finished goods inventory, October 1 …… $ 30,000
Cost of goods manufactured……………….. 577,800
Operating expenses
Advertising expense …………………………... 90,000
Selling and administrative salaries ………. 75,000
Depreciation expense—sales
equipment ………………………………………. 45,000
**$12,000 X 25%
**$ 8,000 X 40%
1-32 Copyright © 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only)
PROBLEM 1-1B
(a)
Product Costs
Cost Item
Materials
Labor
Overhead
Costs
Maintenance costs on factory building
Factory manager’s salary
Advertising for helmets
Sales commissions
Depreciation on factory building
Rent on factory equipment
Insurance on factory building
Raw materials
Utility costs for factory
Supplies for general office
Wages for assembly line workers
Depreciation on office equipment
Miscellaneous materials
$25,000
000,000
$25,000
$54,000
000,000
$54,000
$ 1,500
5,500
700
6,000
3,000
800
2,000
$19,500
8,000
4,000
200
500
000,000
$12,700
(b) Total production costs
Direct materials $25,000
Direct labor 54,000
Manufacturing overhead 19,500
Total production cost $98,500
Production cost per motorcycle helmet = $98,500/1,000 = $98.50
PROBLEM 1-2B
Copyright © 2012 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 6/e, Solutions Manual (For Instructor Use Only) 1-33
(a)
Product Costs
Cost Item
Direct
Materials
Direct
Labor
Manufacturing
Overhead
Period
Costs
Raw materials (1)
Wages for workers (2)
Rent on equipment
Indirect materials (3)
Factory supervisor’s salary
Janitorial costs
Advertising
Depreciation on factory building (4)
Property taxes on factory building (5)
$57,500
000,000
$57,500
$75,000
000,000
$75,000
$ 1,300
7,500
3,500
1,400
700
800
$15,200
$8,000
00,000
$8,000
(1) $23 X 2,500 = 57,500.
(2) $15 X 2 X 2,500 = $75,000.
(3) $3 X 2,500 = $7,500.
(4) $8,400/12 = $700.
(5) $9,600/12 = $800.
(b) Total production costs
Direct materials $ 57,500
Direct labor 75,000
Manufacturing overhead 15,200
Total production cost $147,700
Production cost per racket = $147,700/2,500 = $59.08
PROBLEM 1-3B
(a) Case A
A = $6,300 + $3,000 + $6,000 = $15,300
$15,300 + $1,000 – B = $15,800
B = $15,300 + $1,000 – $15,800 = $500
Case B
G + $4,000 + $5,000 = $16,000
G = $16,000 – $4,000 – $5,000 = $7,000
J = $20,000 + $5,000 = $25,000
PROBLEM 1-3B (Continued)
(b) CASE A
Cost of Goods Manufactured Schedule
Work in process, beginning ………………………….. $ 1,000
Direct materials ……………………………………………. $ 6,300
Direct labor ………………………………………………….. 3,000
(c) CASE A
Income Statement
Sales revenue ……………………………………………… $22,500
Less: Sales discounts …………………………………. 1,500
Net sales ……………………………………………………… $21,000
Cost of goods sold
Finished goods inventory, beginning……… 2,500
CASE A
(Partial) Balance Sheet
Current assets
Cash ……………………………………………………… $ 3,000
Receivables (net) ……………………………………. 10,000
Inventories
PROBLEM 1-4B
(a) MOXIE COMPANY
Cost of Goods Manufactured Schedule
For the Year Ended December 31, 2014
Work in process inventory,
January 1 …………………………... $ 9,500
Direct materials
Raw materials inventory,
January 1 ……………………. $ 47,000
Raw materials
Manufacturing overhead
Plant manager’s salary ……. 60,000
Indirect labor ………………….. 18,100
Factory utilities ………………. 12,900
Factory machinery
depreciation ………………… 7,700
Factory insurance …………… 7,400
PROBLEM 1-4B (Continued)
(b) MOXIE COMPANY
(Partial) Income Statement
For the Year Ended December 31, 2014
Sales revenues
Sales revenue …………………………………….. $465,000
Less: Sales discounts………………………… 2,500
Net sales ……………………………………………. $462,500
Cost of goods sold
(c) MOXIE COMPANY
(Partial) Balance Sheet
December 31, 2014
Assets
Current assets
Cash ………………………………………………….. $ 18,000
Accounts receivable …………………………... 27,000
Inventories
PROBLEM 1-5B
(a) ORTIZ COMPANY
Cost of Goods Manufactured Schedule
For the Month Ended August 31, 2014
Work in process, August 1 ……………… $ 25,000
Direct materials
Raw materials inventory,
August 1 ……………………………… $ 19,500
Raw materials purchases ………… 220,000
Manufacturing overhead
Factory facility rent …………………. $ 60,000
Depreciation on factory
equipment …………………………... 35,000
Indirect labor ………………………….. 20,000
Factory utilities* ……………………… 6,000
PROBLEM 1-5B (Continued)
(b) ORTIZ COMPANY
Income Statement
For the Month Ended August 31, 2014
Sales revenue …………………………………………….. $675,000
Cost of goods sold
Finished goods inventory, August 1 ………. $ 40,000
Cost of goods manufactured…………………. 493,000
Cost of goods available for sale ……………. 533,000
BYP 1-1 DECISION-MAKING AT CURRENT DESIGNS
The answers to parts (a) and (b) may vary from student to student.
(a) What are the primary information needs of each manager?
components for each product.
Bill Johnson, Sales Manager, needs to know sales by territory and
product line.
Dave Thill, Kayak Plant Manager, needs to know all the costs of