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ACCT 2300 _chapter 2 in class

# ACCT 2300 _chapter 2 in class - Exercise 2-19 Calculations...

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Exercise 2-19 Calculations Advertising expense 100,000 Selling Direct labor costs 90,000 Direct labor Purchases of raw materials 132,000 Direct mat. Rent, factory building 80,000 Manfact. O/H Indirect labor 56,300 Manfact. O/H Sales commissions 35,000 Selling Utilities, factory 9,000 Manfact. O/H Maintenance, factory equipment 24,000 Manfact. O/H Supplies, factory 700 Manfact. O/H Depreciation, office equipment 8,000 Administrative Depreciation, factory equipment 40,000 Manfact. O/H Inventories: BOY EOY Raw materials \$8,000 \$10,000 Work in Progress \$5,000 \$20,000 Finished Goods \$70,000 \$25,000 Direct Materials: Beginning Raw Materials Inventory \$8,000 Add: Purchases of raw materials 132,000 Raw materials available for use \$140,000 Less: Ending raw materials inventory 10,000 Raw materials used in production \$130,000 Total Direct Materials: 90,000 manufac. Manufacturing Overhead: costs Rent, factory building 80,000 include Indirect labor 56,300 all DL, Utilities, factory 9,000 DM and Maintenance, factory equipment 24,000 MOH. Supplies, factory 700 Depreciation, factory equipment 40,000 Total manufacturing overhead costs 210,000 Total manufacturing costs \$430,000 Add: Beginning Work In Progress inv. 5,000 \$435,000 Less: Ending WIP Inventory 20,000 Cost of Goods Manufactured \$415,000 The cost of goods Sold section would be: Beginning Finished Goods Inventory 70,000 Add: Cost of Goods Manufactured 415,000 Cost of Goods available for sale 485,000

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Less: Ending Finished Goods Inventory 25,000 Cost of Goods Sold 460,000
Sales Less: COGS Gross Profit Less: Selling and Administrative Expenses Selling Expenses Advertising Expense \$100,000 Sales Commissions 35,000 Total Selling Expenses \$135,000 Administrative Expense Depreciation on Office Equip 8,000 Total Selling and Admin Expenses Net Income:

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\$1,350,000 460,000 \$890,000 \$143,000 \$747,000

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Problem 2 -21 calculations Advertising expense 215,000 Insurance, factory equipment 8,000 Depreciation, sales equipment 40,000 Rent factory building 90,000 Utilities, factory 52,000 Sales commissions 35,000 Cleaning supplies, factory 6,000 Depreciation, factory equipment 110,000 Selling and administrative salaries 85,000 Maintenance, factory 74,000 Direct labor ? Purchases of raw materials 260,000 Inventories: BOY EOY Raw materials \$50,000 \$40,000 Work in Progress ? \$33,000 Finished Goods \$30,000 ? Valenko Company Schedule of Cost of Goods Manufactured Direct Materials: Beginning Raw materials inventory \$50,000 Add: Purchases of raw materials 260,000 Raw materials available for use \$310,000 Less: Ending Raw materials inventory 40,000 \$65,000 Raw materials used in production \$270,000 Direct Labor 65,000 * Manufacturing Overhead: Insurance, factory 8,000 Rent, factory building 90,000 Utilities, factory 52,000 Cleaning supplies, factory 6,000 Depreciation, factory equipment 110,000 Maintenance, factory 74,000 Total overhead costs 340,000 Total manufacturing costs 675,000 given Beginning Work in Progress Inventory 48,000 ** 723,000 Less: Ending Work in Progress Inventory 33,000 Cost of Goods Manufactured 690,000 * To calculate Direct Labor: Raw Materials used in production + Direct Labor + Total Overhead Costs = Tota manufacturing costs

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therefore: \$675,000 (total manufacturing costs) - \$340,000 (total overhead costs) - \$270,000) (total raw materials used in production) = \$65,000.
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