CPAPrepChapter2 - CHAPTER 2 AN INTRODUCTION TO COST TERMS...

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CHAPTER 2 AN INTRODUCTION TO COST TERMS AND PURPOSES 2-31 (30–40 min.) Cost of goods manufactured. 1. Canseco Company Schedule of Cost of Goods Manufactured Year Ended December 31, 2009 (in thousands) Direct materials: Beginning inventory, January 1, 2009 $ 22,000 Purchases of direct materials 75,000 Cost of direct materials available for use 97,000 Ending inventory, December 31, 2009 26,000 Direct materials used $ 71,000 Direct manufacturing labor 25,000 Indirect manufacturing costs: Indirect manufacturing labor 15,000 Plant insurance 9,000 11,000 Repairs and maintenance—plant 4,000 Total indirect manufacturing costs 39,000 Manufacturing costs incurred during 2009 135,000 Add beginning work-in-process inventory, January 1, 2009 21,000 Total manufacturing costs to account for 156,000 Deduct ending work-in-process inventory, December 31, 2009 20,000 Cost of goods manufactured (to Income Statement) $136,000 2. Canseco Company Income Statement Year Ended December 31, 2009 (in thousands) Revenues $300,000 Cost of goods sold: Beginning finished goods, January 1, 2009 $ 18,000 Cost of goods manufactured 136,000 Cost of goods available for sale 154,000 Ending finished goods, December 31, 2009 23,000 Cost of goods sold 131,000 Gross margin 169,000 Operating costs: Marketing, distribution, and customer-service costs 93,000 General and administrative costs 29,000 Total operating costs 122,000 Operating income $ 47,000 1
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2-32 (25–30 min.) Income statement and schedule of cost of goods manufactured. Howell Corporation Income Statement for the Year Ended December 31, 2009 (in millions) Revenues $950 Cost of goods sold: Beginning finished goods, Jan. 1, 2009 $ 70 Cost of goods manufactured (below) 645 Cost of goods available for sale 715 Ending finished goods, Dec. 31, 2009 55 660 Gross margin 290 Marketing, distribution, and customer-service costs 240 Operating income $ 50 Howell Corporation Schedule of Cost of Goods Manufactured for the Year Ended December 31, 2009 (in millions) Direct materials costs: Beginning inventory, Jan. 1, 2009 $ 15 Purchases of direct materials
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This note was uploaded on 08/11/2009 for the course ACCT 612 taught by Professor Jamesswanson during the Spring '09 term at Univ. of Massachusetts Med. School.

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CPAPrepChapter2 - CHAPTER 2 AN INTRODUCTION TO COST TERMS...

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