SOLUTIONS TO PROBLEMS: SET B
(a)
Product Costs
Cost Item
Direct
Materials
Direct
Labor
Manufacturing
Overhead
Maintenance costs on factory building
Factory manager’s salary
Advertising for helmets
Sales commissions
Depreciation on factory building
$ 1,500
5,500
700
(b) Total production costs
Direct materials $25,000
Direct labor 54,000
Miscellaneous materials
$75,000
(a)
Product Costs
Cost Item
Direct
Materials
Direct
Labor
Manufacturing
Overhead
Period
Costs
Raw materials (1)
Wages for workers (2)
$57,500
$75,000
(4) $8,400/12 = $700.
(5) $9,600/12 = $800.
(1) $23 X 2,500 = 57,500.
(2) $15 X 2 X 2,500 = $75,000.
(b) Total production costs
Direct materials $ 57,500
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
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
CASE A
(Partial) Balance Sheet
Current assets
Cash ……………………………………………………… $ 3,000
Accounts receivable (net) ……………………….. 10,000
Inventories
PROBLEM 1-4B
(a) MOXIE COMPANY
Cost of Goods Manufactured Schedule
For the Year Ended December 31, 2017
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
PROBLEM 1-4B (Continued)
(b) MOXIE COMPANY
(Partial) Income Statement
For the Year Ended December 31, 2017
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, 2017
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, 2017
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
PROBLEM 1-5B (Continued)
(b) ORTIZ COMPANY
Income Statement
For the Month Ended August 31, 2017
Sales revenue …………………………………………….. $675,000
Cost of goods sold
Finished goods inventory, August 1 ………. $ 40,000
Operating expenses
Advertising expense …………………………….. 75,000
Selling and administrative salaries ………… 70,000
Depreciation expense—sales