case7 - CASE 7 ARMSTRONG HELMET COMPANY 1 Direct Materials...

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© 2008 For Instructor Use Only Case 7-1 CASE 7 ARMSTRONG HELMET COMPANY 1. Product Costs Direct Direct Manufacturing Period Item Materials Labor Overhead Costs Administrative salaries $15,500 Advertising for helmets 11,000 Depreciation on factory building $ 1,500 Depreciation on office equipment 800 Insurance on factory building 1,500 Miscellaneous expenses— factory 1,000 Office supplies expense 300 Professional fees 500 Property taxes on factory building 400 Raw materials used $70,000 Rent on production equipment 6,000 Research and development 10,000 Sales commissions 40,000 Utility costs—factory 900 Wages—factory $70,000 Totals $70,000 $70,000 $11,300 $78,100
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© 2008 For Instructor Use Only Case 7-2 CASE 7 (Continued) 2. Variable Fixed Total Item Costs Costs Costs Administrative salaries . ........................... $15,500 $15,500 Advertising for helmets . .......................... 11,000 11,000 Depreciation on factory building . ........ 1,500 1,500 Depreciation on office equipment . ...... 800 800 Insurance on factory building . .............. 1,500 1,500 Miscellaneous expenses—factory . ..... $ 1,000 1,000 Office supplies expense . ......................... 300 300 Professional fees. ....................................... 500 500 Property taxes on factory building . .... 400 400 Raw materials used . .................................. 70,000 70,000 Rent on production equipment. ............ 6,000 6,000 Research and development . .................. 10,000 10,000 Sales commissions. ................................... 40,000 40,000 Utility costs—factory . ............................... 900 900 Wages—factory. .......................................... 70,000 70,000 Totals. .............................................................. $181,000 $48,400 $229,400
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© 2008 For Instructor Use Only Case 7-3 CASE 7 (Continued) 3. ARMSTRONG HELMET COMPANY Cost of Goods Manufactured Schedule For the Month Ended December 31, 2008 Work in process, December 1 . ............. $ -0- Direct materials Raw materials inventory . ................ $ 0 (Dec. 1) Raw materials purchased. .............. 70,000 Less: Raw materials inventory (Dec. 31) . ................................... 0 Direct materials used. .............................. $70,000 Direct labor . ................................................ 70,000 Manufacturing overhead Rent on production equipment. ....... $ 6,000 Insurance on factory building. ...... 1,500 Depreciation on factory building. ........................................... 1,500 Utility costs—factory. ....................... 900 Property taxes on factory building. ........................................... 400 Miscellaneous expenses— factory. ............................................. 1,000
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case7 - CASE 7 ARMSTRONG HELMET COMPANY 1 Direct Materials...

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