4-38
Problem 4-30, continued
g.
Direct Materials
$ 75,000
Direct Labor (300 DLH × $14.50/DLH)
4,350
Manufacturing Overhead ($75,000 × 70%)
52,500
Total Cost of Job 3827
$131,850
Markup ($131,850 × 80%)
105,480
Sales Price
$237,330
h.
Predetermined overhead rate =
MH 50,000
$1,050,000
=
$21/Machine hour
materials.
Chapter 4 – Product Costing for Manufacturing Companies
4-39
SOLUTIONS TO C&C CONTINUING CASE
Case 4-31
a. Using cost of pants:
$2.40 × POR =
$3.00
POR =
125%
b.
Direct materials
$191,591
Direct labor
74,208
Manufacturing overhead
92,760
($74,208 × 125%)
Total
$358,559
c.
13,500 pants × $9.87 =
$133,245
3,200 jerseys × $11.17 =
35,744
2,500 jackets × $77.12 =
192,800
Cost of goods manufactured
$361,789
d.
Work in Process
Bal.
5,565
DM
191,591
361,789
COGM
DL
74,208
MOH
92,760
2,335
e.
14,000 pants × $9.87 =
$138,180
3,100 jerseys × $11.17 =
34,627
2,500 jackets × $77.12 =
192,800
Cost of goods sold
$365,607
4-40
Case 4-31, continued
f.
14,000 pants × $12.00 =
$168,000
3,100 jerseys × $14.80 =
45,880
2,500 jackets × $125.00 =
312,500
Total sales revenue
526,380
Less cost of goods sold
365,607
Gross profit
$160,773
of the month.
month.
Chapter 4 – Product Costing for Manufacturing Companies
4-41
SOLUTIONS TO CASES
1992 CMA Exam Unofficial Solution)
a. The accounting adjustments contemplated by John Winslow are
Competence
accordance with technical standards.
Integrity
Winslow violated the integrity standard by engaging in an activity that
prejudices his ability to carry out his duties ethically, by not
Objectivity
By overstating the inventory and reclassifying certain costs, Winslow
b. As a result of Winslow’s actions, Healthful Foods, Inc. could face
Solutions for Davis & Davis, Managerial Accounting, 2nd ed.
4-42
Case 4-32, continued
resulting in nonmonetary reputational damage.
Winslow’s actions are delaying the recognition of expenses in cost of
Case 4-33
a. An important thing to remember in determining cost behavior is that
Variable Costs
Payment to Tom Hanks
Fixed Costs
Production Costs
expenses as the application base.
c. To answer this question, students should prepare a functional income
statement for the film as of December 31, 1994, using the revenue
and cost information provided in the case. The sources of the
Chapter 4 – Product Costing for Manufacturing Companies
4-43
Case 4-33, continued
1994.
Revenue $ 191.0
Less:
becomes variable production overhead. This is equal to 2.4% of
gross box office receipts. The actual amount of variable production
Case 4-33, continued
gross box office receipts before Roth and Groom can participate in
net profits. Based on the contribution format income statement