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SOLUTIONS TO PROBLEMS: SET B
(a)
Product Costs
Cost Item
Direct
Materials
Direct
Labor
Manufacturing
Overhead
Period
Costs
Maintenance costs on factory building
Factory manager’s salary
Advertising for helmets
Sales commissions
Depreciation on factory building
Rent on factory equipment
$ 1,500
5,500
700
6,000
8,000
4,000
(b) Total production costs
Direct materials $25,000
Direct labor 54,000
PROBLEM 19-1B
(a)
Product Costs
Cost Item
Direct
Materials
Direct
Labor
Manufacturing
Overhead
Period
Costs
Raw materials (1)
Wages for workers (2)
Rent on equipment
Indirect materials (3)
$57,500
$75,000
$ 1,300
7,500
(1) $23 X 2,500 = 57,500.
(2) $15 X 2 X 2,500 = $75,000.
(b) Total production costs
Direct materials $ 57,500
Direct labor 75,000
PROBLEM 19-3B
(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
$16,000 + H – $2,000 = $20,000
H = $20,000 + $2,000 – $16,000 = $6,000
PROBLEM 19-3B (Continued)
(b) CASE A
Cost of Goods Manufactured Schedule
Work in process, beginning ................................ $ 1,000
Direct materials .................................................... $ 6,300
Direct labor ........................................................... 3,000
Manufacturing overhead ..................................... 6,000
(c) CASE A
Income Statement
Sales revenue ...................................................... $22,500
Less: Sales discounts ........................................ 1,500
Net sales ............................................................... $21,000
Cost of goods sold
Finished goods inventory, beginning......... 2,500
CASE A
(Partial) Balance Sheet
Current assets
Cash ............................................................... $ 3,000
Accounts receivable (net) ............................. 10,000
PROBLEM 19-4B
(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
Direct materials used .......... $ 65,300
Direct labor .................................. 145,100
Manufacturing overhead
Plant manager’s salary ....... 60,000
Indirect labor ....................... 18,100
Factory utilities ................... 12,900
Factory machinery
Total manufacturing costs ......... 323,400
Total cost of work in process .... 332,900
Less: Work in process,
PROBLEM 19-4B (Continued)
(b) MOXIE COMPANY
(Partial) Income Statement
For the Year Ended December 31, 2017
Sales
Sales revenue ............................................ $465,000
Less: Sales discounts.............................. 2,500
Net sales .................................................... $462,500
Cost of goods sold
Finished goods inventory,
(c) MOXIE COMPANY
(Partial) Balance Sheet
December 31, 2017
Assets
Current assets
Cash ........................................................... $ 18,000
Accounts receivable ................................. 27,000
Inventories
PROBLEM 19-5B
(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
Total raw materials
Manufacturing overhead
Factory facility rent ...................... $ 60,000
Depreciation on factory
equipment ................................. 35,000
Indirect labor ................................ 20,000
Factory utilities* ........................... 6,000
PROBLEM 19-5B (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
Cost of goods manufactured...................... 493,000
Gross profit ......................................................... 194,000
Operating expenses
Advertising expense ................................... 75,000
Selling and administrative salaries ............ 70,000
Depreciation expense—sales
