Week_4_Homework_Answers

Week_4_Homework_Answers - Exercise 18-1 (10 minutes)...

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Exercise 18-1 (10 minutes) Primary Information Source Business Decision Managerial Financial 1. Determine amount of dividends to pay stockholders. X X 2. Evaluate a purchasing department’s performance. .... X 3. Report financial performance to board of directors. .. X X 4. Estimate product cost for new line of shoes. .............. X 5. Plan the budget for next quarter. .................................. X 6. Measure profitability of all individual stores. .............. X X 7. Prepare financial reports according to GAAP. ............ X 8. Determine location and size for a new plant. ............... X Exercise 18-5 (10 minutes) 1. (a), (b), and (c) 2. (a) and (b) 3. (d)
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Exercise 18-6 (20 minutes) Product Cost Period Cost Direct Cost Indirect Cost Prime Conversion 1. Amortization of patents on factory machine ..................... X X 2. Payroll taxes for production supervisor ............................. X X 3. Accident insurance on factory workers * .................... X X X X 4. Depreciation—Factory bldg ... X X 5. State and federal income tax . X 6. Wages to assembly workers ** X X X 7. Direct materials used ............ X X 8. Office supplies used .............. X 9. Bad debts expense ................ X 10. Small tools used ................... X X 11. Factory utilities ..................... X X 12. Advertising ........................... X * There are certain costs that can be classified as direct for one company and indirect for another. The specific classification depends on the materiality and cost benefit of tracking. For example, some companies track employee benefits for direct and indirect workers. Yet, some manufacturing companies will simply classify all employee benefits as indirect and overhead. ** Direct labor is a prime and conversion cost because this labor force is in direct contact with the product in the conversion process.
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Exercise 18-11 (30 minutes) Jahmed Company Kabiro Company 1. C OST O F G OODS M ANUFACTURED Direct materials Beginning raw materials inventory. ............ $ 9,500 $ 13,000 Raw materials purchases. ............................ 24,000 47,000 Raw materials available for use. .................. 33,500 60,000 Less ending raw materials inventory. ......... 10,500 9,400 Direct materials used. ................................... 23,000 50,600 Direct labor. ...................................................... 22,000 44,000 Factory overhead Rental cost on factory equipment. .............. 33,000 27,000 Factory utilities. ............................................. 13,000 17,000 Factory supplies used. ................................. 10,600 10,000 Indirect labor. ................................................ 3,250 9,660 Repairs—Factory equipment. ...................... 6,780 3,500 Total factory overhead. ................................. 66,630 67,160 Total manufacturing costs. ............................. 111,630 161,760 Beginning goods in process inventory. ........ 21,000
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This note was uploaded on 11/15/2010 for the course AC 202 taught by Professor Nancyeverett during the Fall '09 term at Park.

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Week_4_Homework_Answers - Exercise 18-1 (10 minutes)...

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