Solutions -- Week 2

Solutions -- Week 2 - WEEK CLS DATES[M-W 2 DATES[T-Th GNB...

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GNB Problem Solutions – Week-by-Week page 1 of 8 WEEK 2 GNB ASSIGNED PROBLEM SOLUTIONS BUAD 250B – FALL 2009 CLS DATES [M-W] DATES [T-Th] TOPICS READINGS ASSIGNMENTS [TO BE COMPLETED BY DATE ASSIGNED] 3 Aug 31 Sep 1 Cost Terms & Concepts Ch. 2 PR: 2-13, 18 In-class: 2-17 4 Sep 2 Sep 3 Product Costs Job-Order Costing Ch. 2 Ch. 3 PR: 2-20, 21 In-class: 2-23 & 26 Intro: Ch. 3 Problem 2-13 Note to the Instructor: There may be some exceptions to the answers below. The purpose of this problem is to get the student to start thinking about cost behavior and cost purposes; try to avoid lengthy discussions about how a particular cost is classified. Variable or Selling Administrative Manufacturing (Product) Cost Cost Item Fixed Cost Cost Direct Indirect 1. Property taxes, factory . .................................. F X 2. Boxes used for packaging detergent produced by the company . ......................... V X 3. Salespersons’ commissions . .......................... V X 4. Supervisor’s salary, factory . ........................... F X 5. Depreciation, executive autos . ....................... F X 6. Wages of workers assembling computers . .... V X 7. Insurance, finished goods warehouses . ......... F X 8. Lubricants for production equipment . ............. V X 9. Advertising costs . ........................................... F X 10. Microchips used in producing calculators . ..... V X 11. Shipping costs on merchandise sold . ............. V X 12. Magazine subscriptions, factory lunchroom . .. F X 13. Thread in a garment factory . .......................... V X 14. Billing costs . ................................................... V X* 15. Executive life insurance . ................................ F X 16. Ink used in textbook production . .................... V X 17. Fringe benefits, assembly-line workers . ......... V X** 18. Yarn used in sweater production . ................... V X 19. Wages of receptionist, executive offices . ....... F X * Could be administrative cost. ** Could be indirect cost.
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GNB Problem Solutions – Week-by-Week page 2 of 8 Problem 2-18 1. Meriwell Company Schedule of Cost of Goods Manufactured Direct materials: Raw materials inventory, beginning . ............................... $ 9,000 Add: Purchases of raw materials . ................................... 125,000 Raw materials available for use . ..................................... 134,000 Deduct: Raw materials inventory, ending . ...................... 6,000 Raw materials used in production . .................................. $128,000 Direct labor . ........................................................................ 70,000 Manufacturing overhead . .................................................... 105,000 Total manufacturing costs . ................................................. 303,000 Add: Work in process inventory, beginning . ....................... 17,00 0 320,000 Deduct: Work in process inventory, ending . ....................... 30,000 Cost of goods manufactured . ............................................. $290,000
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Solutions -- Week 2 - WEEK CLS DATES[M-W 2 DATES[T-Th GNB...

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