# Practice Problem Set 01 with Solution.pdf - Solutions to...

• 14

This preview shows page 1 - 3 out of 14 pages.

Solutions to Problem Set 11Solutions to Practice Problem Set 1Exercise 1For each case below, find the missing amount:Case 1Case IICase IIIBeginning inventory of finished goods?\$18,000\$3,500Cost of goods manufactured during period\$104,750\$142,500Ending inventory of finished goods\$24,500\$12,000\$10,500Cost of goods sold\$101,250?\$152,000The general formula for solving all three cases is as follows:Beginninginventory offinished goods+Cost of goodsmanufacturedduring periodEndinginventory offinished goods=Cost-of-goods soldexpenseUsing this formula, we can find the missing amounts as follows:CaseIIIIIIBeginning inventory of finished goods..................\$21,000\$18,000\$ 3,500Add: Cost of goods manufactured.........................104,750142,500159,000Subtract: Ending inventory of finished goods.......24,50012,00010,500Cost of goods sold..................................................\$101,250\$148,500\$152,000?
Solutions to Problem Set 1Exercise 2Alhambra Aluminum Company, a manufacturer of recyclable soda cans, had the followinginventory balances at the beginning and end of 20X1.January 1, 20X1 (\$)December 31, 20X1 (\$)Raw material55,00075,000Work in process110,000125,000Finished Goods160,000155,000During 20X1, the company purchased \$240,000 of raw material and spent \$420,000 for directlabor. Manufacturing overhead costs were as follows:\$Indirect material12,000Indirect labor22,000Depreciation on plant and equipment110,000Utilities23,000Other35,000Sales revenue was \$1,210,000 for the year. Selling and administrative expenses for the yearamounted to \$105,000. The firm’s tax rate is 35%Required (use the following tables to prepare full schedules if they help you):2.1 What is the cost of goods manufactured?2.2 What is the cost of goods sold?2.3 What is the net income reported by the company?2.1ALHAMBRAALUMINUMCOMPANYSCHEDULE OFCOST OFGOODSMANUFACTUREDFOR THEYEARENDEDDECEMBER31,20Direct material:Raw-material inventory, January 1...........................................\$55,000Add: Purchases of raw material................................................240,000Raw material available for use..................................................\$295,000Deduct: Raw-material inventory, December 31.......................75,000Raw material used.....................................................................\$220,000Direct labor.....................................................................................420,000Manufacturing overhead:Indirect material........................................................................\$ 12,000Indirect labor.............................................................................22,000Depreciation on plant and equipment.......................................110,000Utilities......................................................................................23,000Other.........................................................................................35,000X1
2

Course Hero member to access this document

Course Hero member to access this document

End of preview. Want to read all 14 pages?

Course Hero member to access this document

Term
Winter
Professor
N/A
Tags
production supervisor, Alhambra Aluminum Company