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Demo WP Ch1 - Demonstration Problems for Chapter 1...

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Demonstration Problems for Chapter 1 Demonstration Problem 1-1 Identifying Product Costs Eiffel Manufacturing Company makes small replicas of major landmarks that it sells to souvenir shops. The company was started on January 1, 2010 when it acquired $60,000 cash from the issue of common stock. During 2010 the company purchased and used raw materials that cost $16,000 cash. It paid wages to workers who made the replicas $22,000 cash. Finally, manufacturing overhead costs, including rental fees paid for facilities and equipment, amounted to $12,000 cash. The company started and completed the production of 1,000 replicas during 2010. Required a. Determine the amount of expense Eiffel incurred in 2010 assuming none of the replicas were sold in 2010. b. Record the accounting events associated with making the 1,000 replicas in a financial statements model like the one shown below. The event pertaining to the issue of common stock is recorded in the model as an example.
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