Examples Chapter 3

Examples Chapter 3 - purchased $100,000 of materials How...

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Example 1 Cam Company manufactures quilts. In its first month of operations, it began and completed 200 quilts. The following production information has been provided. Direct Material cost per unit 5 Indirect Labor costs 100 Indirect Material costs 50 Marketing expenses 250 Cost per direct labor hour 10 Factory rent 1000 Administration expenses 500 Direct labor per unit 2hrs 1) Calculate direct labor cost for one quilt $20 2) Calculated total overhead costs for the first month of production $1,150 3) Calculate the total product costs $6,150 4) How are marketing and administrative expenses categorized? Non-Manufacturing Costs 5) Calculate Cost of goods sold if 150 quilts sold during the month. $4,612.50= 150* 30.75= 6150/200--- Income Statement Ending Inventory: 50 Items* 30.75—Balance Sheet
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Example 2 Collier Company started the month with $50,000 in raw materials. At the end of the month the balance in raw materials was $25,000 and during the month the company
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Unformatted text preview: purchased $100,000 of materials. How much raw material was used during the month? 50,000+100,000-25,000= $125,000 Example 3 Direct materials used $50,000 Direct labor 30,000 Factory rent 10,000 Equipment depreciation 9,000 Marketing expense 25,000 Salesperson commissions 15,000 Administrative salaries 60,000 Shipping charges 3,000 Number of units produced 10,000 Number of units Sold 24,000 1. Calculate the Cost of Goods Sold 50,000+30,000+19000= 99,000/10,000= 9.9 for each sold 9.9*5000= $49,500 COGS Example 4 Cambell Company produced 40,000 units in March at a total cost of $240,000. The company sold 30,000 units for $10 each. The company spent $50,000 on administrative and selling expenses. Fill in the partial income statement below. Sales 300,000 Less: Cost of goods sold 180,000 Gross Profit 120,000 Less: Selling and administrative expenses 50,000 Net income 70,000...
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Examples Chapter 3 - purchased $100,000 of materials How...

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