Seminar 09 Week 10 - 0902

Seminar 09 Week 10 - 0902 - S OLUTIONS TO SELF STUDY...

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Unformatted text preview: S OLUTIONS TO SELF STUDY QUESTIONS 1 (a) Disagree. Management accounting is a field of accounting that provides and financial information for managers and other internal users. economic (b) Pat is incorrect. Management accounting applies to all types of businesses – service, merchandising and manufacturing. 5 Product costs or inventoriable costs are costs that are a necessary and integral part of producing the finished product. Period costs are costs that are identified with a specific time period rather than with a saleable product. These costs relate to non-manufacturing costs and, therefore, are not inventoriable costs. 7 Harn Manufacturing Direct Material Costing Raw materials opening inventory Raw materials purchases Total raw materials available for use Raw materials closing inventory Direct materials used 32,000 200,000 232,000 29,000 203,000 B rief Exercise 13.1 Financial Accounting Management Accounting Main users Type of reports External users Classified financial statements Frequency of reports Quarterly, six monthly and annually General purpose information for all users Internal users Internal reports, with detailed information required As the need arises Purpose of reports Content of reports Verification process Generally accepted accounting principles. Annual audit by registered company auditor Page 2 of 8 Special purpose information for a particular user for a specific decision. Relevance to the decision to be made. No independent audit. E xercise 13.12 a) Lanier Manufacturing Ltd Raw materials inventory (1/1): Direct materials used Add: Raw materials inventory 31/12 Less: Raw materials purchases Raw materials inventory Total cost of work in process: Cost of goods manufactured Add: Work in process 31/12 Total cost of work in process 135,500 6,500 (132,000) 10,000 560,000 87,000 647,000 Total manufacturing costs: Total cost of work in process Less: Work in process (1/1) Total manufacturing costs 647,000 (200,000) 447,000 Direct labour: Total manufacturing costs Less: Total overhead Direct materials used Direct labour 447,000 (127,000) (135,500) 184,500 Page 3 of 8 P roblem Set A 13.5 a) Hawkinson Ltd Cost of Goods Manufactured Schedule for the month ended 31 August 2009 Work in process inventory, 1/8 25,000 Direct materials: Raw materials inventory, 1/8 Raw materials purchased Total raw materials available for use Less: Raw materials inventory, 31/8 Direct materials used 18,000 200,000 218,000 (33,000) 185,000 Direct labour 150,000 Manufacturing overhead: Factory rent Depreciation on equipment Indirect labour Factor power (10,000 x .7) Factory insurance (5,000 x .8) Total manufacturing overhead 60,000 40,000 20,000 7,000 4,000 131,000 Total manufacturing costs 466,000 Total cost of work in process Less: Work in process, 31/8 491,000 (21,000) Cost of goods manufactured 470,000 Page 4 of 8 b) Hawkinson Ltd Income statement for the month ended 31 August 2009 Sales (net) 670,000 Cost of goods sold: Finished goods inventory, 1/8 Cost of goods manufactured Cost of goods available for sale Less: Finished goods inventory, 31/8 Cost of goods sold: 40,000 470,000 510,000 62,000 448,000 Gross profit 222,000 Operating expenses Advertising expenses Selling and administrative expenses Depreciation expense Power expense ($10,000 x .3) Insurance expense ($5,000 x .2) Total operating expenses Profit 80,000 70,000 55,000 3,000 1,000 209,000 13,000 Page 5 of 8 P roblem Set B 13.6 a) Case 1 a) Direct materials used Direct labour Manufacturing overhead Total manufacturing costs 8,000 6,000 5,000 19,000 b) Total manufacturing cost Plus: Beginning work in process Less: Cost of goods manufactured Ending work in process inventory 19,000 1,000 (16,500) 3,500 c) Goods available for sale Less: Cost of goods manufactured Beginning finished goods inventory 18,000 (16,500) 1,500 d) Goods available for sale Less: Ending finished goods inventory Cost of goods sold 18,000 (3,000) 15,000 e) Sales Less: Sales discounts Cost of goods sold Gross profit 24,500 (2,500) (15,000) 7,000 f) Gross profit Less: Operating expenses Profit 7,000 (2,500) 4,500 Case 2 g) Total manufacturing costs Less: Direct labour Manufacturing overhead Direct materials used 21,000 (8,000) (4,000) 9,000 h) (Cost of goods manufactured Ending work in process inventory Less: Total manufacturing costs Beginning work in process inventory Page 6 of 8 22,000 3,000 (21,000) 4,000 i) Sales? Need to solve (k) first. Gross profit Cost of goods sold Sales discounts Sales 7,000 23,000 1,400 31,400 j) Beginning finished goods inventory Cost of goods manufactured Goods available for sale 3,500 22,000 25,500 k) Goods available for sale Less: Ending finished goods inventory Cost of goods sold 25,500 (2,500) 23,000 l) Gross profit Less: Profit Operating expenses 7,000 (2,800) 4,200 b) Condensed Cost of Goods Manufactured Schedule Work in process, beginning 1,000 Direct materials Direct labour Manufacturing overhead Total manufacturing costs 8,000 6,000 5,000 19,000 Total cost of work in process Less: Work in process, ending 20,000 (3,500) Cost of goods manufactured 16,500 Page 7 of 8 c) Income statement Sales Less: Sales discounts Net sales 24,500 (2,500) 22,000 Cost of goods sold: Finished goods inventory, beginning Cost of goods manufactured Cost of goods available for sale Finished goods inventory, ending Cost of goods sold 1,500 16,500 18,000 3,000 15,000 Gross profit Operating expenses 7,000 2,500 Profit 4,500 Partial Balance Sheet Current assets: Cash Receivables Inventories: Finished goods Work in process Raw materials Prepaid expenses 4,000 15,000 3,000 2,500 600 Total current assets 7,100 400 26,500 Page 8 of 8 ...
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This note was uploaded on 04/14/2010 for the course ACCT 1002 taught by Professor Angela during the Three '10 term at University of Sydney.

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