25
Manufacturing
Accounting
ANSWERS TO DISCUSSION QUESTIONS AND
CRITICAL THINKING/ETHICAL CASE
2. Disagree. Direct labor includes the wages of personnel whose efforts directly change
4. Raw material inventory (Beg.)
+ Net purchases
− Raw material inventory (End.)
5. Receiving reports acknowledge receipt of all materials and supplies from vendors.
6. Lot tickets.
8.
9. Direct labor dollars; direct labor hours or machine hours. The amount of overhead to
10. The manufacturing worksheet has a statement of cost of goods manufactured
Other Overhead
Raw
Indirect
Direct
SOLUTIONS TO CONCEPT CHECKS
1. a. Raw Material
2.
Beginning raw materials inventory
$6,100
Add: Purchases of raw materials
Raw materials available for use
76,100
Less: Ending raw materials inventory
Raw materials used
3.
Raw materials inventory, June 1
$4,600
Add: Raw materials purchases
17,400
Raw materials available for use
Less: Raw materials inventory, June 30
Cost of raw materials used
Direct labor
Overhead
Total manufacturing costs
4.
Payroll Payable
4,300
c.
Payroll Payable
4,800
Depreciation Expense
Accounts
Dr.
Cr.
a.
Work-in-Process Inventory
5,000
Raw Materials Inventory
5,000
5.
a.
Dr. column of Statement of Cost of Goods
Manufactured and Dr. column of Trial Balance
b.
Cr. column of Income Statement and
Dr. column of Balance Sheet
c.
Dr. column of Income Statement and
Dr. column of Trial Balance
d.
Cr. column of Statement of Cost of Goods
Manufactured and Dr. column of Balance Sheet
SOLUTIONS TO SET A EXERCISES
25A–1.a. Raw Material
25A-2.
Beginning raw materials inventory
$68,000
Add: Purchases of raw materials
Raw materials available for use
Less: Ending raw materials inventory
25A-3.
Raw materials inventory, May 1
$9,600
Add: Raw materials purchases
76,000
Raw materials available for use
Less: Raw materials inventory, May 31
Cost of raw materials used
Direct labor
74,000
Overhead
79,000
25A–4.
May
a. Work-in-Process Inventory
77
0
0
0
00
Raw Materials Inventory
77
0
0
0
00
b. Work-in-Process Inventory
50
0
0
0
00
Payroll Payable
50
0
0
0
00
2
0
0
00
Supplies Inventory
2
0
0
00
17
5
0
0
00
9
0
0
00
Rent Expense
4
0
0
00
Depreciation Expense
5
0
0
00
0
0
0
00
25A-5.
a. Ending Balances
Debit Column
Credit Column
Raw Materials Inventory
Balance Sheet
Statement of Cost of Goods Manufactured
SOLUTIONS TO SET B EXERCISES
25B–1. a. Raw Material
25B-2.
Beginning raw materials inventory
$64,000
Add: Purchases of raw materials
Less: Ending raw materials inventory
25B-3.
Raw materials inventory, May 1
$8,800
Add: Raw materials purchases
68,000
Less: Raw materials inventory, May 31
10,000
Direct labor
88,000
Overhead
77,000
25B-4.
May
a. Work-in-Process Inventory
72
0
0
0
00
Raw Materials Inventory
72
0
0
0
00
b. Work-in-Process Inventory
60
0
0
0
00
Payroll Payable
60
0
0
0
00
7
4
0
0
00
Supplies Inventory
4
0
0
00
18
5
0
0
00
Payroll Payable
18
5
0
0
00
4
2
0
0
00
Rent Expense
3
4
0
0
00
Depreciation Expense
8
0
0
00
f. Work-in-Process Inventory
18
0
0
0
00
Manufacturing Overhead-Applied
18
0
0
0
00
g. Finished Goods Inventory
0
0
0
00
66
0
0
0
00
64
0
0
0
00
Sales
64
0
0
0
00
h. Cost of Goods Sold
39
0
0
0
00
Finished Goods Inventory
39
0
0
0
00
EXERCISES (CONTINUED)
25B-5.
a. Ending Balances
Debit Column
Credit Column
SOLUTIONS TO SET A PROBLEMS
PROBLEM 25A-1 WALDEN MANUFACTURING
STATEMENT OF COST OF GOODS MANUFACTURED
FOR THE MONTH ENDED APRIL 30, 201X
Direct Materials:
Raw Materials Inventory, 4/1/1X
$19
0
0
0
00
Plus: Net Purchases
140
0
0
0
00
Raw Materials Available for Sale
Less: Raw Materials Inventory, 4/30/1X
0
0
0
00
Raw Materials Used
Direct Labor
132
0
0
0
00
Manufacturing Overhead
5
0
0
00
8
0
0
00
7
0
0
00
9
0
0
00
4
0
0
00
4
0
0
00
0
0
0
00
5
0
0
00
PROBLEM 25A-2 ACE MANUFACTURING
GENERAL JOURNAL
Date
Account Titles and Description
PR
Dr.
Cr.
Nov.
a. Work-in-Process Inventory
84
0
0
0
00
Raw Materials Inventory
84
0
0
0
00
20
8
0
0
00
00
Electricity Expense
6
0
0
0
00
h. Cost of Goods Sold
0
0
0
00
0
0
0
00
PROBLEM 25A-3 FOREST CORPORATION
WORKSHEET
Account Titles
Trial Balance
Adjustments
Dr.
Cr.
Dr.
Cr.
Cash
6
1
5
0
00
Raw Materials Inventory
8
7
0
0
00
7
5
2
0
00
Finished Goods Inventory
5
5
0
00
Factory Supplies
3
2
4
0
00
Prepaid Factory Insurance
3
8
0
00
Desks
9
7
0
00
Machinery
2
4
0
00
Accum. Depreciation, Machinery
8
0
5
0
00
Accounts Payable
3
1
5
0
00
Common Stock−$10 Par
0
0
0
00
Sales
1
8
0
00
Raw Materials Purchases
36
9
0
0
00
Direct Labor
23
3
8
0
00
Indirect Labor
9
7
0
0
00
Machinery Repairs
6
8
0
00
Selling Expense
6
5
0
00
Administrative Expense
0
8
0
00
Factory Supplies Expense
1
2
2
0
00
Depreciation Expense, Machinery
3
1
4
0
00
Net Income
PROBLEM 25A-3 (CONCLUDED)
FOREST CORPORATION
WORKSHEET
Cost of Goods Manufactured
Income Statement
Balance Sheet
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
6
1
5
0
00
0
0
5
5
5
0
00
2
0
8
2
8
2
6
0
00
10
5
5
0
1
0
0
00
1
0
0
00
3
2
4
0
00
3
8
0
00
9
7
0
00
2
4
0
00
8
0
5
0
00
3
1
5
0
00
0
0
0
00
8
1
2
0
00
115
1
8
0
00
36
9
0
0
00
23
3
8
0
00
7
0
0
00
6
8
0
00
6
5
0
0
8
0
2
2
0
00
4
3
0
00
4
3
0
SOLUTIONS TO SET B PROBLEMS
PROBLEM 25B-1
MANNING MANUFACTURING
STATEMENT OF COST OF GOODS MANUFACTURED
FOR THE MONTH ENDED FEBRUARY 28, 201X
Raw Materials Inventory, 2/1/1X
$17
0
0
0
00
Plus: Net Purchases
134
0
0
0
00
Raw Materials Available for Use
0
0
0
00
Manufacturing Overhead
6
0
0
00
2
0
0
00
4
0
0
00
0
0
0
00
PROBLEM 25B-2
BISHOP MANUFACTURING
GENERAL JOURNAL
Date
Account Titles and Description
PR
Dr.
Cr.
Nov.
a. Work-in-Process Inventory
72
0
0
0
00
Raw Materials Inventory
72
0
0
0
00
b. Work-in-Process Inventory
0
0
0
00
Payroll Payable
0
0
0
00
6
0
0
00
Supplies Inventory
6
0
0
00
0
0
0
00
Payroll Payable
0
0
0
00
2
0
0
00
Rent Expense
6
0
0
00
Supervision Expense
6
0
0
00
Depreciation Expense
0
0
0
00
Electricity Expense
0
0
0
00
f. Work-in-Process Inventory
0
0
0
00
Manufacturing Overhead-Applied
0
0
0
00
g. Finished Goods Inventory
0
0
0
00
0
0
0
00
h. Cost of Goods Sold
0
0
0
00
Finished Goods Inventory
0
0
0
00
0
0
0
00
0
0
0
00
PROBLEM 25B-3
FOREST CORPORATION
WORKSHEET
Account Titles
Trial Balance
Adjustments
Dr.
Cr.
Dr.
Cr.
Cash
6
2
5
0
00
Raw Materials Inventory
9
0
0
0
00
7
4
8
0
00
Finished Goods Inventory
9
8
9
0
00
Factory Supplies
3
1
5
0
00
Prepaid Factory Insurance
3
7
0
00
Desks
9
2
0
00
Machinery
62
5
0
0
00
Accumulated Depreciation, Machinery
8
3
0
0
00
Accounts Payable
3
1
9
0
00
Common Stock−$10 Par
58
0
0
0
00
Retained Earnings
7
9
6
0
00
Sales
123
0
7
0
00
Raw Materials Purchases
39
4
0
0
00
Direct Labor
21
3
8
0
00
Indirect Labor
10
1
0
0
00
7
5
0
00
Selling Expense
14
7
6
0
00
Administrative Expense
10
0
8
0
00
Factory Supplies Expense
1
7
2
0
00
Depreciation Expense, Machinery
2
7
7
0
00
Net Income
PROBLEM 25B-3 (CONCLUDED)
FOREST CORPORATION
WORKSHEET
Cost of Goods Manufactured
Income Statement
Balance Sheet
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
6
2
5
0
00
9
0
0
0
00
11
5
9
0
00
11
5
9
0
00
7
4
8
0
00
8
3
4
0
00
8
3
4
0
00
8
9
0
2
0
0
00
10
2
0
0
00
3
1
5
0
00
9
2
0
00
62
5
0
0
00
3
0
0
00
1
9
0
00
0
0
0
00
9
6
0
00
123
0
7
0
00
39
4
0
0
00
21
3
8
0
00
10
1
0
0
00
7
5
0
00
7
6
0
0
8
0
1
7
2
0
00
72
6
7
0
00
6
7
0
FINANCIAL REPORT PROBLEM SOLUTION—Amazon’s Annual Report