Chapter_1 Presentation Solutions 2009

Chapter_1 Presentation Solutions 2009 - Chapter #1...

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Chapter #1 Presentation Solutions Brief Exercise 1-4  Mannerman Fabrication Schedule of Cost of Goods Manufactured Direct materials: Beginning raw materials inventory. ........ $ 55,000  Add: Purchases of raw materials. ..........   440,000     Raw materials available for use. ............ 495,000 Deduct: Ending raw materials inventory       65,000     Raw materials used in production. ......... $  430,000  Direct labor. .............................................. 215,000  Manufacturing overhead. ..........................         380,000       Total manufacturing costs. ........................ 1,025,000  Add: Beginning work in process inventory         190,000       1,215,000  Deduct: Ending work in process inventory         220,00     0 Cost of goods manufactured. .................... $        995,000     Brief Exercise 1-5 Cost Behavior Cost Variable Fixed 1. Small glass plates used for lab tests in a  X Acc 208 Presentations Chapter #1 Presentation Solutions 1
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hospital. .................................................... 2. Straight-line depreciation of a building. ....... X 3. Top-management salaries. .......................... X 4. Electrical costs of running machines. .......... X 5. Advertising of products and services*. ........ X 6. Batteries used in manufacturing trucks. ...... X 7. Commissions to salespersons. .................... X 8. Insurance on a dentist’s office. .................... X 9. Leather used in manufacturing footballs. .... X 10. Rent on a medical center. ........................... X * This particular item may cause some debate. Hopefully, advertising results in more demand for  products and services by customers. If so, advertising costs should be correlated with the amount of  products and services provided. However, note the direction of causality. Advertising causes an 
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Chapter_1 Presentation Solutions 2009 - Chapter #1...

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