Exam 1 problems.docx - *Inventory If the beginning balance for May of the materials inventory account was $27,500 the ending balance for May is $28,750

Exam 1 problems.docx - *Inventory If the beginning balance...

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*Inventory If the beginning balance for May of the materials inventory account was $27,500, the ending balance for May is $28,750, and $128,900 of materials were used during the month, the materials purchased during the month cost 130,150 ( Beg – Used- Ending = Amt Purchased ) Answer D is correct . Purchases equals usage adjusted for the inventory change. Hence, purchases equals $130,150 ($128,900 used – $27,500 BI + $28,750 E *Cost of Goods Manufactured and COGS The following information was taken from last year’s accounting records of a manufacturing company. Inventory January 1 December 31 Raw materials $38,000 $ 45,000 Work-in-process 21,000 10,000 Finished goods 78,000 107,000 Other information Direct labor $236,000 Shipping costs on outgoing orders 6,500 Factory rent 59,000 Factory depreciation 18,700 Advertising expense 24,900 Net purchases of raw materials 115,000 Corporate administrative salaries 178,000 Material handling costs 35,800 On the basis of this information, the company’s cost of goods manufactured and cost of goods sold are D. $468,500 and $439,500, respectively. Answer D is correct . This solution requires a series of computations. Beginning raw materials $ 38,00 0 Add: Net purchases raw materials $115,00 0 Materials available $153,00 0 Less: Ending materials (45,000) Materials used in production $108,00 0 Direct labor 236,000 Manufacturing overhead Factory rent $59,00
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0 Factory depreciation 18,700 Material handling costs + 35,800 Total Manufacturing overhead = 113,500 Total manufacturing costs $457,50 0 Add: Beginning work-in- process 21,000 Less: Ending work-in-process (10,000) Costs of Goods Manufactured $468,5 00 Add: Beginning finished goods 78,000 Less: Ending finished goods (107,000 ) Cost of Goods Sold $439,5 00 An entity had the following opening and closing inventory balances during the current year: 1/1 12/31 Finished goods $ 90,000 $260,000 Raw materials 105,000 130,000 Work-in-progress 220,000 175,000 The following transactions and events occurred during the current year: $300,000 of raw materials were purchased, of which $20,000 were returned because of defects. $600,000 of direct labor costs were incurred. $750,000 of production overhead costs were incurred. The cost of goods sold for the current year ended December 31 would be - 1,480,000 Beginning Raw Materials $105,000 Purchases during the period 300,000 (Returns) (Ending direct materials inventory) (130,000) (20,000)
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= Direct materials used in production $255,000 Direct labor costs 600,000 Manufacturing overhead costs (fixed + variable) 750,000 = Total manufacturing costs $1,605,000 Beginning work-in-process inventory 220,000 (Ending work-in-process inventory) (175,000) = Cost of goods manufactured $1,650,000 Beginning finished goods inventory 90,000 (Ending finished goods inventory) (260,000) = Cost of goods sold $1,480,000 A company incurred $200,000 of manufacturing cost during the month, with a beginning finished goods inventory of $20,000 and an ending finished goods inventory of $15,000. Assuming no work-in-process inventories, the company’s cost of goods sold was - 205,000 *Stmt of cash flow Below are the balances for the following accounts on the balance sheet of a company as of the end of Year 20X2 and Year 20X1.
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