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E13.18.
a.
Total cost for 4,200 toy flutes produced:
Raw materials ……………………………………………………………
$490.00
E13.19.
a.
Absorption cost per sweater ………………………………………………
$11.60
Less: Fixed manufacturing overhead per sweater ($22,500 / 9,000)………
(2.50)
E13.20.
a.
Absorption cost per calculator ……………………………………………
$10.25
Less: Fixed manufacturing overhead per calculator ($29,450 / 9,500)……
(3.10)
P13.21.
a.
Total manufacturing cost = (Direct materials + Direct labor + Manufacturing overhead)
Direct materials ………………………………………………..
$3,500,000
Direct labor (160,000 hours * $20 per hour) …………………..
3,200,000
P13.22.
a.
Total manufacturing cost = (Direct materials + Direct labor + Manufacturing overhead)
Direct materials ……………….………………………………
$107,200
Direct labor (13,120 hours * $15 per hour)……………………
196,800
$20.00 per direct labor hour for assembly and inspection).
P13.22.
(continued)
Total manufacturing cost = (Direct materials + Direct labor + Manufacturing overhead)
= $107,200 + $196,800 + $393,600 = $697,600
Cost per unit produced = $697,600 / 3,200 units = $218.00 per unit
c.
The activity based costing approach is likely to provide better information for
manufacturing managers because overhead costs are applied based on the activities that
cause the incurrence of each cost. Even in this simplified situation, the advantages of an
ABC system are easy to see. At 50,000 units of production, budgeted labor hours are
200,000. Thus, direct labor is expected to be 4 hours per unit produced. In the month of
P13.23.
a.
Variable manufacturing costs:
Raw materials …………………………………………………………….
$ 62,100
Direct labor ……………………………………………………………….
16,500
Variable manufacturing overhead…………………………………………
11,250
b.
The fixed cost per rod is $7.19 - $5.99 = $1.20.
This can also be computed as: $18,000 / 15,000 = $1.20.
The total fixed cost associated with the 300 fishing rods in inventory is:
300 * $1.20 = $360.
P13.23.
(continued)
P13.24.
a.
Variable manufacturing costs:
Raw materials …………………………..………………………………
$275,200
Direct labor …………………………..…………………………………
454,400
Variable manufacturing overhead…….…………………………………
115,200
Total variable costs ……………..….…………………………………
$844,800
Fixed manufacturing overhead…….….…………………………………
108,800
Total manufacturing costs……….….…………………………………
$953,600
P13.25.
a.
Raw materials …………………………………………………………….
$ 33,100
Direct labor ……………………………………………………………….
65,200
Manufacturing overhead …………………………………………………
44,800
P13.25.
(continued)
d.
MARYVILLE, INC.
Absorption Income Statement
For the month of August
P13.26.
a.
Raw materials …………………………………………………………...
$ 61,464
Direct labor ……………………………………………………………..
37,752
Manufacturing overhead ……………………………………………….
32,760
Cost of goods manufactured …………………………………………….
$131,976
Cost per unit = $131,976 / 2,600 = $50.76
d.
GRANDSLAM, INC.
Absorption Income Statement
For the month of March
Sales ……………………………………………………………………
$138,040
Cost of goods sold………………………………………………………
(73,602)
Gross profit ………………………………..……………………………
$ 64,438
P13.27.
a.
Note: This problem does not require a formal statement of cost of goods manufactured;
the requirements can be solved using a "T" account approach.
Raw materials:
Inventory, Sept. 30 …………………………………………
$ 33,500
Purchases during October ………………………………….
123,900
Raw materials available for use ……………………………
157,400
b.
Finished goods, Sept. 30 ……………………………………
$ 47,200
Cost of goods manufactured…………………………………
640,800
P13.28.
a.
BUCK & COMPANY
Statement of Cost of Goods Manufactured
For the month of August
Raw materials:
Inventory, August 1 ………………………………………
$ 19,600
Purchases during August …………………………………
44,100
Cost per unit = $191,100 / 4,200 = $45.50
P13.28.
(continued)
b.
Finished goods, August 1 …………………………………………………
$ 41,800
Cost of goods manufactured ………………………………………………
191,100
c.
The difference between cost of goods manufactured and cost of goods sold is in the
finished goods inventory account on the balance sheet. Since fewer units were
d.
BUCK & COMPANY
Absorption Income Statement
For the month of August
Sales ………………………………………………………………………
$ 272,800
Cost of goods sold…………………………………………………………
(200,200)
Gross profit ……………………………..…………………………………
$ 72,600
C13.29.
Answer:
Firm A
Firm B
Firm C
Beginning raw materials inventory ………..
$ 17,000
$ 23,000
$ 42,000
+ Purchases of raw materials during the year..
85,000
96,000
226,000
= Raw materials available for use……………
102,000
119,000
268,000
- Ending raw materials inventory……………
12,000
18,000
51,000
C13.29.
(continued)
Firm A
Firm B
Firm C
Sales
$480,000
$410,000
$911,000
Less: Cost of goods sold:
Beginning finished goods inventory………….
30,000
37,000
61,000
+ Cost of goods manufactured………………….
360,000
266,000
700,000
Calculations:
Firm A
1) $90,000 + $12,000 = $102,000
2) $102,000 - $17,000 = $85,000
3) $370,000 - $90,000 - $130,000 - $100,000 = $50,000
7) $140,000 - $68,000 = $72,000
Firm B
1) $119,000 - $96,000 = $23,000
4) $270,000 - $101,000 - $34,000 - $60,000 = $75,000
6) $303,000 - $273,000 = $30,000
8) $137,000 - $32,000 = $105,000
Firm C
1) $42,000 + $226,000 = $268,000
2) $268,000 - $51,000 = $217,000
5) $697,000 - $217,000 - $318,000 - $72,000 = $90,000
7) $198,000 - $89,000 = $109,000
C13.30.
a.
Predetermined fixed manufacturing overhead application rate
= $312,000 / 96,000 machine hours = $3.25 per machine hour
b.
Graph of fixed manufacturing overhead relationships:
$'s
Fixed overhead assigned to production
at the rate of $3.25 per machine hour
The graph illustrates that fixed overhead costs are treated differently for planning
and control purposes than for product costing purposes. For planning purposes, fixed
c.
Graph of variable manufacturing overhead relationships:
$'s
Variable overhead expected and assigned
to production at the rate of $6.00 per
direct labor hour
