1065
Exercise 18-11 (concluded)
Manufacturing Business
PRECISION MANUFACTURING
Partial Income Statement
For Year Ended December 31, 2017
Cost of goods sold
Finished goods inventory, December 31, 2016………………..
$ 450,000
Cost of goods manufactured ………………………………………….
Goods available for sale ………………………………………………..
Less finished goods inventory, December 31, 2017 ………..
Beginning Inventory 450,000
Finished Goods Inventory
Computer supplies used in office …….
Cash ………………………………………………
✓
Direct labor …………………………………….
Ending work in process inventory ……
✓
Ending raw materials inventory ……….
✓
Factory maintenance wages …………….
Income taxes …………………………………..
Insurance on factory building ………….
Property taxes on factory building …..
Raw materials purchases ………………..
Sales ………………………………………………
Exercise 18-12 (25 minutes)
Account
Balance
Sheet
Schedule of
COGM
Accounts receivable ……………………….
✓
1067
Exercise 18-13 (25 minutes)
DELRAY MFG.
Schedule of Cost of Goods Manufactured
For Year Ended December 31, 2017
Direct materials
Raw materials inventory, December 31, 2016 ………………..
$ 37,000
Raw materials purchases …………………………………………….
175,600
Raw materials available for use …………………………………..
Direct materials used ………………………………………………….
Factory computer supplies used …………………………..
Indirect labor ……………………………………………………………….
Repairs—Factory equipment ………………………………………..
Rent cost of factory building ………………………………………..
57,000
Total factory overhead costs ……………………………………….
Total manufacturing costs ……………………………………………..
Total cost of work in process …………………………………………
Less work in process inventory, December 31, 2017 ………….
1068
Exercise 18-14 (20 minutes)
DELRAY MFG.
Income Statement
For Year Ended December 31, 2017
Sales ………………………………………………………………………………
$1,250,000
Cost of goods sold
Finished goods inventory, December 31, 2016………………
$ 62,750
Cost of goods manufactured ………………………………………..
Cost of goods available for sale ……………………………………
Less finished goods inventory, December 31, 2017 ………….
Cost of goods sold …………………………..………………………….
529,840
Gross profit ……………………………………………………………………
Operating expenses
Advertising expense …………………………………………………….
General and administrative expenses …………………………..
Total operating expenses …………………………………………….
223,300
1069
Exercise 18-15 (25 minutes)
Beck Manufacturing
Schedule of Cost of Goods Manufactured
For Year Ended December 31, 2017
Direct materials ………………………………………………………………………….
$ 46,500
Direct labor ……………………………………………………………………………….
27,500
Total manufacturing costs ……………………………………………………….
Add work in process, December 31, 2016 ……………………………………
Total cost of work in process ………………………………………………………
Beck Manufacturing
Partial Income Statement
For Year Ended December 31, 2017
Cost of goods sold
1070
Exercise 18-16 (15 minutes)
Factory overhead
Activity
Ending finished
Beginning finished
Finished goods
Raw materials
Production
Activity
Materials
Direct labor used
1071
Exercise 18–17 (10 minutes)
Exercise 18-18 (10 minutes)
1. Sales revenue
Profit
2. Coffee purchases from ethical growers
People
Planet
Planet
Profit
Planet
Planet
People
Exercise 18-19 (10 minutes)
1. Sales revenue
Profit
2. Women in management positions
People
Planet
People
Profit
People
7. Recycling efforts
Planet
Profit
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 18
1072
PROBLEM SET A
Problem 18-1A (45 minutes)
Part 1 Cost classification and amounts
Costs
Variable
Fixed
Product
Period
1.
Plastic for casing—$17,000 ………………
$17,000
$17,000
Part 2
TrueBeat
Calculation of Manufacturing Cost per Drum Set
For Year Ended December 31, 2017
Item
Total cost
(at 1,000 units)
Per unit cost
(Total / 1,000)
Variable production costs
Plastic for casing
$ 17,000
$ 17
Drum stands
Total variable production costs
Property taxes on factory
Machinery depreciation
Total fixed production costs
$180,000
$180
3.
Property taxes on factory—$5,000 …….
1073
Problem 18-1A (continued)
Part 3
Part 4
If 1,200 drum sets are produced, we would expect the cost of the property
1074
Problem 18-2A (30 minutes)
Costs
Product
Cost
Dir.
Mtls.
Dir.
Labor
Over-
head
Period
Cost
Selling
Gen. &
Admin
Advertising expense
X
X
Depr. expense-Office equip.
X
X
Depr. expense-Selling equip.
X
X
Depr. expense-Factory equip.
Factory supervision
Factory supplies used
Factory utilities
Direct labor
Indirect labor
Misc. production costs
Office salaries expense
X
X
Raw materials purchases
Rent expense-Office space
X
X
Rent expense-Selling space
X
X
Rent expense-Factory bldg.
Maint. expense-Factory equip.
Sales salaries expense
X
X
1075
Problem 18-3A (75 minutes)
Part 1
LEONE COMPANY
Schedule of Cost of Goods Manufactured
For Year Ended December 31, 2017
Direct materials
Raw materials inventory, December 31, 2016 ……….
$ 166,850
Raw materials purchases …………………………………….
Raw materials available for use …………………………..
Less raw materials inventory, December 31, 2017 …..
Direct materials used ………………………………………….
Direct labor ……………………………………………………………
Depreciation expense—Factory equipment ………….
Factory supervision …………………………………………….
Factory supplies used …………………………………………
Factory utilities …………………………………………………..
Indirect labor ………………………………………………………
Miscellaneous production costs ………………………….
Rent expense—Factory building ………………………….
Maintenance expense—Factory equipment ………….
Total factory overhead costs ……………………………….
Total manufacturing costs ……………………………………..
Total cost of work in process …………………………………
1076
Problem 18-3A (Continued)
Part 2
LEONE COMPANY
Income Statement
For Year Ended December 31, 2017
Sales …………………………..…………………………………………
$4,462,500
Cost of goods sold
Finished goods inventory, December 31, 2016………
Cost of goods manufactured …………………………..……
Goods available for sale ………………………………………
Less finished goods inventory, December 31, 2017 …….
Cost of goods sold ………………………………………………
Operating expenses
Selling expenses
Advertising expense …………………………………………..
28,750
Depreciation expense—Selling equipment ………….
Rent expense—Selling space …………………………..
26,100
Sales salaries expense ……………………………………….
Total selling expenses ……………………………………….
General and administrative expenses
Depreciation expense—Office equipment ……………
Office salaries expense …………………………..………….
63,000
Rent expense—Office space ………………………………
Total general and administrative expenses …………
Total operating expenses …………………………………….
Income taxes expense ……………………………………………
1077
Problem 18-3A (Continued)
Part 3
Raw
Materials
Finished
Goods
Cost of raw materials used ……………………………………………..
$909,850
Cost of goods sold ……………………………………………………….
Beginning inventory ……………………………………………………….
$166,850
Discussion: The inventory turnover ratio for the raw materials inventory is
significantly lower than the turnover ratio for finished goods.
1078
Problem 18-4A (40 minutes)
Part 1
Units and dollar amounts of raw materials inventory in heels
Units
Cost per
Unit
Dollars
Beginning inventory, December 31, 2016 1,200 $8 $9,600
Part 2 Analysis Component
Topics of discussion for this memorandum include:
Problem 18-5A (40 minutes)
Part 1
MERCHANDISING BUSINESS
MUSIC WORLD RETAIL
Partial Income Statement
For Year Ended December 31, 2017
Cost of goods sold
Merchandise inventory, December 31, 2016 …………………………..
Merchandise purchases ……………………………………………………….
Goods available for sale ……………………………………………………….
Less merchandise inventory, December 31, 2017 …………………..
MANUFACTURING BUSINESS
WAVE–BOARD MFG.
Partial Income Statement
For Year Ended December 31, 2017
Cost of goods sold
Finished goods inventory, December 31, 2016……………………….
$ 500,000
Cost of goods manufactured …………………………………………………
Goods available for sale ……………………………………………………….
Less finished goods inventory, December 31, 2017 ……………….
Part 2
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
The answers will vary but should include:
• The Merchandise Inventory account on December 31 for Music World and
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 18
1080
PROBLEM SET B
Problem 18-1B (45 minutes)
Part 1 Cost classification and amounts
Cost by Behavior
Cost by Function
Costs
Variable
Fixed
Product
Period
1.
Plastic for BDs—$1,500 ………………….
$ 1,500
$ 1,500
3.
Cost of factory rent—$6,750 ……………
1081
Problem 18-1B (continued)
Part 2
Maxwell
Calculation of Manufacturing Cost per BD
For Year Ended December 31, 2017
Item
Total cost
(at 15,000 units)
Per unit cost *
Variable production costs
Plastic for BDs
$ 1,500
$ 0.10
Wages of assembly workers
Labeling
Total variable production costs
Cost of factory rent
Machinery depreciation
Total fixed production costs
Part 3
If 10,000 BDs are produced, we would expect the cost of the plastic for the BDs to