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Weygandt, Accounting Principles, 12e,
Chapter Nineteen
Solutions to Challenge Exercises
Solution
CE 19-1
(a) Option A:
(a) Direct materials used = $175,575 – 46,500 – 47,000 = $82,075
(b) Work in process 1/1/17 = $197,075 – 175,575 = $21,500
(c) Work in process 12/31/17 = $197,075 – 162,844 = $34,231
Option B:
(b) Option A results in the lowest cost of goods manufactured by using moderately priced
materials and reasonable labor and manufacturing overhead charges. However, the
materials’ supplier does not guarantee that the materials will always be available in the
quantities needed by Banta Company. This could result in slowdowns in production and
missed deadlines nullifying any savings.
CE 19-2
Part a:
Williams Co.
Cost of Goods Manufacturing Schedule
For Month Ending September 30, 2017
Work in Process 9/1/17 $7,500
Direct Materials
Raw Materials Inventory 9/1/177 $12,000
Add: Raw Materials purchases 62,500
Total Raw materials available for use 74,500
Part b:
Williams Co.
Balance Sheet Presentation (partial)
September 30, 2017
Inventories:
CE 19-2 (cont.)
Part c:
Williams Co.
Cost of Goods Manufacturing Schedule
For Month Ending September 30, 2017
Work in Process 9/1/17 $7,500
Direct Materials
Raw Materials Inventory 9/1/17 $12,000
Less: Raw materials inventory 9/30/17 11,300
Direct Materials Used $63,200
Direct Labor 30,600
Manufacturing Overhead
Indirect Labor 3,900
Factory Insurance 8,000
Total Overhead 28,750
Total Manufacturing Overhead 122,550
Direct labor = 51,000 x 60% = 30,600
Indirect labor = 6,500 x 60% = 3,900
