Chapter 3 Questions

Chapter 3 Questions - Question 1 The following selected...

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Question 1 The following selected information was extracted from 2005 accounting records of Pine Tree Product: Seventy-five percent of the company’s building was devoted to production activities; the remaining 25% was used for selling and administrative function. Inventory data: Inventory activities 1/1/2005 12/31/2005 Raw materials Work-in-process Finished goods $ 15,800 35,700 111,100 18,200 62,100 97,900 The January 1 and December 31 finished goods inventory consisted of 1,350 units and 1,190 units, respectively. Required: 1- Calculate Pine Tree’s manufacturing overhead for the year. 2- Calculate Pine Tree’s cost of goods manufactured. 3- Compute the company’s cost of goods sold . 4- Determine net income for 2005, assuming a 30% income tax rate. 5- Determine the number of completed units manufactured during the year. Activities Amount Raw material purchases Direct Labor Indirect Labor Selling and administrative salaries Building depreciation Other selling and administrative expenses Other factory costs Sales revenue ( 130 per unit) 175,000 254,000 109,000 133,000 80,000 195,000 344,000 1495,000
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Question 2 Alexandria Aluminum Company, a manufacturer of recyclable soda Cans, had the following inventory balances at the beginning and end of 2005. Inventory classification January 1,2005 December31,2005 Raw material Work in process Finished goods $ 60,000 120,000 150,000 70,000 115,000 165,000 During 2005, the company purchased $ 250,000of raw material and spent $400,000 on direct labor. Manufacturing overhead costs were as follow: Indirect material $ 10,000 Indirect labor 25,000 Depreciation on plant and equipment 100,000 Utilities 25,000 Other 30,000 Sales revenue was $ 1,105,000 for the year. Selling and administrative expenses For the year amounted to $ 110,000. The firm’s tax rate is 40%. Required: 1- Prepare a schedule of cost goods manufactured. 2- Prepare a schedule of cost of goods sold. 3- Prepare an income statement. Question 3 The following data refer to San Fernando Fashion Company for the year 2005: Activities Amount Sales revenue Work in process inventory, $ 950,000 30,000
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Work in process inventory, January 1 Selling & administrative expenses Income tax expenses Purchases of raw material Raw material inventory, December 31 Raw material inventory, January 1 Direct labor Utilities on the factory Depreciation plant and equipment Finished goods inventory, December 31 Finished goods inventory, January 1 Indirect material Indirect labor Other manufacturing overhead 40,000 150,000 90,000 180,000 25,000 40,000 200,000 40,000 60,000 50,000 20,000 10,000 15,000 80,000 Required: 1- Prepare San Fernando Fashions’ schedule of cost of goods Manufactured for the year. 2-
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Chapter 3 Questions - Question 1 The following selected...

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