Chapter 3 - Accounting 2020 Final Exam Review Chapter 3...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Accounting 2020 Final Exam Review Chapter 3 Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows 40. (LO 4 – Cost of goods manufactured) The cost of goods manufactured is $185,000 as shown below: Beginning inventory of work in process $20,000 Plus: Raw materials used in production 90,000 ** Plus: Direct labor 30,000 Plus: Manufacturing overhead 60,000 Subtotal $200,000 Less: Ending Work-in-process (15,000) Cost of goods manufactured $185,000 ** Calculation of raw materials used in production: Beginning inventory of raw materials $30,000 Plus: Raw materials purchased 80,000 Raw material available for use $110,000 Less: Ending inventory of raw materials ( 20,000) Raw materials used in production $90,000 41. (LO 4 – Cost of goods sold) The manufacturing cost per unit is $2.38 calculated as follows: [(24,000+22,000+6,000+7,500)/25,000 units produced] = $2.38 Therefore, cost of goods sold is $57,120 (24,000 units sold x $2.38) 48. (LO 3, 4, and 5 – Cost of goods manufactured, cost of goods sold and impact on financial statements) A. The cost of goods manufactured is $305,000 as shown below: Beginning inventory of Work-in-process $ 20,000 Plus: Raw materials used in production 118,000 1 Plus: Direct labor 75,000 Plus: Manufacturing overhead 123,000 2 Less: Ending Work-in-process (31,000) Cost of goods manufactured $305,000 1 Raw Materials Used in Production Beginning inventory of raw materials $ 10,000 Plus: Raw Material purchased 125,000 Raw Material Available for use 135,000 Less: Ending inventory of raw materials 17,000 Raw Materials Used in Production $ 118,000 2 Manufacturing Overhead Indirect labor $ 40,000 Equipment maintenance 10,000 Factory insurance 12,000 Factory rent 30,000 Factory depreciation 20,000 Factory supplies 11,000 Total manufacturing overhead $ 123,000
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
B. The cost of goods sold is equal to $310,000 as calculated below: Cost of goods sold equals: Beginning Finished Goods Inventory $ 30,000 Plus: Cost of goods manufactured 305,000 Less: Ending Finished Goods Inventory (25,000 ) Cost of goods sold $310,000 C. Advertising, selling, and administrative expenses are period or non-manufacturing costs. Therefore, they are excluded from the calculations of cost of goods manufactured and cost of goods sold. D. If raw materials and work-in-process inventories had decreased during the year, then the financial statements would be different. A decrease in the raw materials inventory would mean that more materials had been used than previously calculated. More materials used means higher total manufacturing costs for the period and ultimately higher cost of goods sold. A decrease in work-in-process inventory would increase the cost of goods manufactured and cost of goods sold as well. Chapter 4
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/29/2008 for the course ACCT 2020 taught by Professor Lukawitz during the Spring '08 term at U. Memphis.

Page1 / 10

Chapter 3 - Accounting 2020 Final Exam Review Chapter 3...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online