Chapter 2 Solutions

Chapter 2 Solutions - 2-26 2-45 2-46 2-52 EXERCISE 2-26 1...

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2-26, 2-45, 2-46, 2-52 EXERCISE 2-26 1. Hours worked ..................................................................................................... 40 Wage rate ............................................................................................................ × $ 16 Total compensation ........................................................................................... $640 2. Classification: Direct labor (36 hours × $16) ...................................................................... $576 Overhead (idle time: 4 hours × $16) ........................................................... 64 Total compensation ...................................................................................... $640 PROBLEM 2-45 Case A Case B Case C Sales ............................................................................... $1,600,000* $1,500,000* $240,000 Beginning inventory, raw material ............................... 120,000* 60,000 7,500 Ending inventory, raw material ..................................... 180,000 30,000* 15,000 Purchases of raw material ............................................. 200,000 255,000 35,000* Direct material used ....................................................... 140,000 285,000 27,500* Direct labor ..................................................................... 400,000* 300,000 62,500 Manufacturing overhead ............................................... 500,000 450,000* 80,000 Total manufacturing costs ............................................ 1,040,000 1,035,000 170,000 Beginning inventory, work in process ......................... 70,000 60,000 7,500* Ending inventory, work in process ............................... 60,000* 105,000 2,500 Cost of goods manufactured ........................................ 1,050,000 990,000* 175,000 Beginning inventory, finished goods ........................... 100,000 120,000 10,000* Cost of goods available for sale ................................... 1,150,000* 1,110,000* 185,000 Ending inventory, finished goods ................................ 60,000* 120,000* 12,500 Cost of goods sold ........................................................ 1,090,000 990,000 172,500* Gross margin ................................................................. 510,000 510,000 67,500* Selling and administrative expenses ........................... 210,000* 225,000 22,500* Income before taxes ...................................................... 300,000 285,000* 45,000 Income tax expense ....................................................... 80,000 135,000 17,500* Net income ..................................................................... 220,000* 150,000* 27,500 *Amount missing in problem.
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PROBLEM 2-46 1. Fixed manufacturing overhead per unit: $1,200,000 ÷ 24,000 units produced = $50 Average unit manufacturing cost: Direct material…………………….
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