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ch01 - SOLUTIONS TO EXERCISESSET B EXERCISE 1-1B(a Factory...

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SOLUTIONS TO EXERCISES—SET B EXERCISE 1-1B (a) Factory utilities .......................................................................... $ 16,500 Depreciation on factory equipment ........................................ 12,650 Indirect factory labor ................................................................ 48,900 Indirect materials ...................................................................... 80,800 Factory manager’s salary ......................................................... 13,000 Property taxes on factory building ......................................... 2,500 Factory repairs .......................................................................... 2,000 Manufacturing overhead .......................................................... $176,350 (b) Direct materials ......................................................................... $137,600 Direct labor ................................................................................ 79,100 Manufacturing overhead .......................................................... 176,350 Product costs ............................................................................ $393,050 (c) Depreciation on delivery trucks .............................................. $ 8,800 Sales salaries ............................................................................ 46,400 Repairs to office equipment .................................................... 1,300 Advertising ................................................................................ 18,000 Office supplies used ................................................................. 5,640 Period costs ............................................................................... $ 80,140 EXERCISE 1-2B (a) Delivery service (product) costs: Indirect materials ............................................................ $ 8,400 Depreciation on delivery equipment ............................. 11,200 Dispatcher’s salary ......................................................... 5,000 Gas and oil for delivery trucks ...................................... 2,200 Drivers’ salaries .............................................................. 15,000 Delivery equipment repairs ............................................ 300 Total ......................................................................... $42,100 (b) Period costs: Property taxes on office building .................................. $ 2,870 CEO’s salary .................................................................... 12,000 Advertising ....................................................................... 1,600 Office supplies ................................................................ 650 Office utilities ................................................................... 990 Repairs on office equipment .......................................... 680 Total ......................................................................... $18,790 © 2008 For Instructor Use Only 1-1
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EXERCISE 1-3B (a) Work-in-process, 1/1 ................................. $ 10,000 Direct materials used ................................ $120,000 Direct labor ................................................ 110,000 Manufacturing overhead Depreciation on plant ........................ $60,000 Factory supplies used ....................... 23,000 Property taxes on plant ..................... 19,000 Total manufacturing overhead ................ 102,000 Total manufacturing costs ....................... 332,000 Total cost of work-in-process .................. 342,000 Less: Ending work-in-process ................. 15,500 Cost of goods manufactured ................... $326,500 (b) Finished goods, 1/1 ................................... $ 60,000 Cost of goods manufactured .................. 326,500 Cost of goods available for sale .............. 386,500 Finished goods, 12/31 .............................. 50,600 Cost of goods sold .................................... $335,900 EXERCISE 1-4B Total raw materials available for use: Direct materials used .......................................................... $190,000 Add: Raw materials inventory (12/31) ............................... 17,500 Total raw materials available for use ................................ $207,500 Raw materials inventory (1/1): Direct materials used .......................................................... $190,000 Add: Raw materials inventory (12/31) ............................... 17,500 Less: Raw materials purchases ........................................ (168,000 ) Raw materials inventory (1/1) ............................................ $ 39,500 Total cost of work in process: Cost of goods manufactured ............................................. $550,000 Add: Work in process (12/31) ............................................ 81,000 Total cost of work in process ............................................ $631,000 © 2008 For Instructor Use Only 1-2
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EXERCISE 1-4B (Continued) Total manufacturing costs: Total cost of work in process ................................................ $631,000 Less: Work in process (1/1) ................................................... (210,000 ) Total manufacturing costs ..................................................... $421,000 Direct labor: Total manufacturing costs ..................................................... $421,000 Less: Total overhead .............................................................. (122,000 ) Direct materials used ................................................... (190,000 ) Direct labor .............................................................................. $109,000 EXERCISE 1-5B A + $57,000 + $46,500 = $175,650 $252,500 – $11,000 = F A = $72,150 F = $241,500 $175,650 + B = $221,500 $130,000 + G + $102,000 = $273,700 B = $45,850 G = $41,700 $221,500 – C = $180,275 $273,700 + H = $337,000 C = $41,225 H = $63,300 $68,400 + $86,000 + $81,600 = D $337,000 – $90,000 = I D = $236,000 I = $247,000 $236,000 + $16,500 = E E = $252,500 Additional explanation to EXERCISE 1-5B solution: Case A (a) Total manufacturing costs ..................................................... $175,650 Less: Manufacturing overhead .............................................. (46,500) Direct labor .................................................................... (57,000 ) © 2008 For Instructor Use Only 1-3
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Direct materials used .............................................................. $ 72,150 © 2008 For Instructor Use Only 1-4
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EXERCISE 1-5B (Continued) (b) Total cost of work in process ................................................. $221,500 Less: Total manufacturing costs ........................................... 175,650 Work in process (1/1/08) ......................................................... $ 45,850 (c) Total cost of work in process ................................................. $221,500 Less: Cost of goods manufactured ....................................... 180,275 Work in process (12/31/08) ..................................................... $ 41,225 Case B (d) Direct materials used .............................................................. $ 68,400 Direct labor ............................................................................... 86,000 Manufacturing overhead ......................................................... 81,600 Total manufacturing costs ..................................................... $236,000 (e) Total manufacturing costs ..................................................... $236,000 Work in process (1/1/08) ......................................................... 16,500 Total cost of work in process ................................................. $252,500 (f) Total cost of work in process ................................................. $252,500 Less: Work in process (12/31/08) ........................................... 11,000 Cost of goods manufactured ................................................. $241,500 Case C (g) Total manufacturing costs ..................................................... $273,700 Less: Manufacturing overhead .............................................. (102,000) Direct materials used ................................................... (130,000 ) Direct labor .............................................................................. $ 41,700 (h) Total cost of work in process ................................................ $337,000
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