Exam_1_08

Exam_1_08 - Management 122 Winter 2008 Danny S. Litt EXAM 1...

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Unformatted text preview: Management 122 Winter 2008 Danny S. Litt EXAM 1 Solutions NAME: ________________ I agree to have my grade posted by Student ID Number. ___________________ (Signature) PROBLEM POINTS SCORE 1 15 2 10 3 30 4 30 5 30 6 30 7 20 8 15 9 20 TOTAL 200 M ANAGEMENT 122 N AME : __________________________ Page | 1 Problem 1 The following data pertain to Graham Company's operations in May: May 1 May 31 Work in process inventory ............. $7,000 $12,000 Raw materials inventory ................ $15,000 ? Finished goods inventory ............... ? $20,000 Other data: Raw materials used ........................ $40,000 Sales $200,000 Cost of goods manufactured .......... $135,000 Manufacturing overhead cost ......... $60,000 Raw materials purchases ................ $30,000 Gross Margin ................................. $60,000 Requirements Determine the following: Ending materials inventory $5,000 Beginning finished goods inventory $25,000 Direct labor cost for May $40,000 Beginning raw materials inventory ................ $15,000 Add: Raw materials purchases....................... 30,000 Raw materials available for use ..................... 45,000 Deduct: Ending raw materials inventory ....... 5,000 * Raw materials used ........................................ $40,000 *Calculate this item by working backwards, as shown: Raw materials used = Raw materials available Ending raw materials inventory $40,000 = $45,000 Ending raw materials inventory Ending raw materials inventory = $5,000 Sales Cost of goods sold = Gross margin Cost of goods sold = Sales Gross margin Cost of goods sold = $200,000 $60,000 Cost of goods sold = $140,000 Next, solve backwards for beginning finished goods inventory: Beginning raw materials inventory ...................... $ 25,000 * Add: Cost of goods manufactured ........................ 135,000 Cost of goods available for sale ........................... 160,000 * Deduct: Ending finished goods inventory ............ 20,000 Cost of goods sold ................................................ $140,000 * These items must be calculated by working backwards upward through the statements. M ANAGEMENT 122 N AME : __________________________ Page | 2 Graham Company Schedule of Cost of Goods Manufactured Direct materials .................................................................. $40,000 Direct labor ........................................................................ 40,000* Manufacturing overhead .................................................... 60,000 Total manufacturing costs.................................................. 140,000* Add: Work in process, beginning ...................................... 7,000 147,000* Deduct: Work in process, ending....................................... 12,000 Cost of goods manufactured .............................................. $135,000 * These items must be calculated by working backwards upward through the statements. M ANAGEMENT 122 N AME : __________________________...
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Exam_1_08 - Management 122 Winter 2008 Danny S. Litt EXAM 1...

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