BasicConceptsCH2 - Basic Cost Management Concepts Chapter Two Cornerstone Exercise 2.1 Pietro Frozen Foods Inc produces frozen pizzas For next year

BasicConceptsCH2 - Basic Cost Management Concepts Chapter...

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Basic Cost Management Concepts: Chapter Two Cornerstone Exercise 2.1Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,000 units will be produced, with the following total cost:ITEMS$Direct Materials120,000Direct Labor60,000Variable Overhead25,000Fixed Overhead220,0001) Calculate the prime cost per unit: 2) Calculate the conversion cost per unit: 3) Calculate total Variable Cost per unit: 4) Calculate the total product (manufacturing) cost per unit:
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Cornerstone Exercise 2.2 1) Pietro Frozen Foods Inc. Statement of Cost of Goods Manufactured For the Coming Year $ $ Direct Materials Beginning Inventory 5,600 Add: Purchases 119,30 0 Materials Available 124,90 0 Less: Ending Inventory 4,900 Direct Materials used in Production 120,000 Direct Labor 60,000 Manufacturing Factory Overhead ( $25,000 + $220,000) 245,000 Total Manufacturing Costs Added 425,000 Add: Beginning Work in Process 12,500 Less: Ending Work in Process 14,600 Cost of Goods Manufactured 422,900 2) Cornerstone Exercise 2.3 ITEMS DIRECTION OF CHANGE AMOUNT $ Direct Materials used Decrease 2,000 Total Manufacturing Goods Decrease 2,000 Cost of Goods Manufactured Decrease 2,000
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1) 2) If beginning Inventory of finished goods decreased by $5000, the cost of goods sold would decrease by the same amount.
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