Managerial.docx

Managerial.docx - Sales Direct materials Direct labor Case...

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Case A Case B Case C Case D Sales \$85,000 \$72,000 (b) \$110,000 \$95,000 (b) Direct materials 15,000 21,000 65,000 (f) 21,000 Direct labor 5,000 11,000 (c) 20,000 9,000 (c) Total direct costs 20,000 (a) 32,000 85,000 (e) 30,000 Conversion cost 13,000 (b) 26,000 30,000 (g) 58,000 (g) Manufacturing overhead 8,000 15,000 (d) 10,000 49,000 (f) Current manufacturing costs 28,000 (c) 47,000 (e) 95,000 79,000 Work in process, beginning 7,000 10,000 19,000 (d) 21,000 Work in process, ending 5,000 25,000 (f) 21,000 18,000 (e) Cost of goods manufactured 30,000 (d) 32,000 93,000 (c) 82,000 Finished goods inventory, beginning 9,000 8,000 7,000 12,000 Finished goods inventory, ending 6,000 5,000 (g) 8,000 14,000 (d) Cost of goods sold 33,000 (e) 35,000 92,000 (b) 80,000 Gross profit 52,000 (f) 37,000 (a) 18,000 15,000 Selling and administrative expenses 20,000 15,000 6,000 (a) 9,000 (a) Net income 32,000 (g) 22,000 12,000 6,000 A. This is direct materials plus direct labor. B. The first equation here is: direct costs plus conversion cost plus manufacturing overhead equals current manufacturing cost. But, since you do not have conversion costs you have to solve for current manufacturing costs first. Beginning work in process inventory was 7000 and ending work in process inventory was 5000, therefore, of the Costs of goods manufactured total 2000 came from the decrease in inventory. But, you do not know the cost of goods manufactured.

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