1 CHAPTER SOLUTIONS
Part I
1.
2.
3.
4.
5.
6.
7.
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F
T
T
T
T
F
8.
9.
10.
11.
12.
13.
14.
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F
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T
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T
Part II
15.
16.
17.
18.
19.
20.
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1.
2.
3.
4.
5.
6.
7.
p
h
q
a
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d
t
8.
9.
10.
11.
12.
13.
14.
l
b
f
s
m
c
o
15.
16.
17.
18.
19.
20.
r
e
n
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k
g
Part III
1. (c)
When finished goods are shipped to the customer, Cost of Goods Sold is debited and
Finished Goods is credited.
2. (d)
Standard costs are predetermined costs for direct materials, direct labor, and fac tory
overhead that are established by using information accumulated from past experience
and from scientific research. Budgets should be based on standard costs.
3. (a)
Only manufacturing costs are inventoriable.
4. (d)
Process costing accumulates costs by production process or department. It is used when
units are not separately distinguishable from one another during one or more
manufacturing processes.
5. (b)
Cement production usually consists of manufacturing long runs of homogeneous
products for which process costing is used. The other three industries would utilize job
order costing.
6. (c)
Plant depreciation is a factory overhead cost because it is a manufacturing cost that
cannot be identified with specific jobs.
7. (b)
When items in Work in Process are completed and transferred to the finished goods
storeroom, Finished Goods is debited and Work in Process is credited.
8. (c)
The cost of goods sold is determined as follows:
Beginning finished goods inventory...........................................
Add cost of goods manufactured................................................
Goods available for sale..............................................................
Less ending finished goods inventory.........................................
Cost of goods sold.......................................................................
$25,000
500,000
$525,000
50,000
$475,000
Cost of goods sold ($475,000) plus gross profit ($150,000) equals sales of
$625,000.
S1
Solutions
Chapter One
9. (c) Beginning finished goods inventory............................................
$40,000
Cost of goods manufactured................................................................
Goods available for sale......................................................................
Less: Ending finished goods inventory ...............................................
Cost of goods sold...............................................................................
260,000
$300,000
32,000
$268,000
Sales.....................................................................................................
Cost of goods sold...............................................................................
Gross The profit..........................................................................................
$323,000
268,000
$55,000
Note: beginning and ending inventories of work in process have no significance in this
calculation because they would have been used in determining the cost of goods
manufactured, which was given.
10. (c)
Answers (a), (b), and (d) are all uses of unit costs.
Part IV
Indirect
Materials
Indirect
Labor
Other Indirect
Manufacturing
Costs
1.
2.
3.
Selling and
Administrative
Expenses
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
S2
Chapter One
Solutions
Part V
Debit
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Credit
d
j
j
g, f
e
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f, g, h
f, h
l
f
f, h
g
a
m, b
j
d
i
d
o
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k
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l
j
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n, a
P art VI
Carroll Company
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 2011
Direct materials:
Inventory, January 1......................................................................
Purchases.......................................................................................
Total cost of available materials ....................................................
Less inventory, December 31....................................................
Cost of materials used...................................................................
Less indirect materials used......................................................
Cost of direct materials used in production..................................
Direct labor.........................................................................................
Factory overhead:
Indirect materials...........................................................................
Indirect labor..................................................................................
Other factory overhead..................................................................
Total factory overhead...................................................................
Total manufacturing cost....................................................................
Add work-in-process inventory, January 1...................................
Total...........................................................................................
Less work-in-process inventory, December 31............................
Cost of goods manufactured..............................................................
$15,000
22,000
$37,000
10,000
$27,000
3,000
$3,000
8,000
7,500
$24,000
30,000
18,500
$72,500
25,000
$97,500
30,000
$67,500
S3