# B c d a cost accting hw 1 for march total 70000 30000

• Homework Help
• 17
• 95% (21) 20 out of 21 people found this document helpful

This preview shows page 6 - 11 out of 17 pages.

B C D A
Cost Accting- HW 1 for March total \$70,000 (\$30,000 + \$40,000). 13. Jackson Products Schedule of Cost of Goods Manufactured For the Year Ended December 31 (in thousands) Direct materials: Beginning inventory \$17,000 Purchases of direct materials 70,000 Cost of direct materials available for use \$87,000 Ending inventory (9,000) Direct materials used \$ 78,000 Direct manufacturing labor 9,000
Cost Accting- HW 1 Indirect manufacturing costs: Indirect manufacturing labor \$ 8,000 Supplies 1,000 Heat, light, and power 4,000 Depreciation -- plant building 2,000 Depreciation -- plant equipment 3,000 Miscellaneous 2,000 20,000 Manufacturing costs incurred during the period \$107,000 Add beginning work-in-process inventory 11,000
Cost Accting- HW 1 Total manufacturing costs to account for \$118,000 Deduct ending work-in-process inventory (7,000) Cost of goods manufactured (to Income Statement) \$111,000 What are Jackson’s direct manufacturing costs for the year? .
14. Johnson Co., distributor of candles, has reported the following budget assumptions for Year 1: No change in candles inventory level; cash disbursement to candle manufacturer, \$300,000; target accounts payable ending balance for Year 1 is 150% of accounts payable beginning balance; and sales price is set at a markup of 20% of candle purchase price. The candle manufacturer is Johnson’s only vendor, and all purchases are made on credit. The accounts payable has a balance of \$100,000 at the beginning of Year 1. What is the budgeted gross margin for Year 1? A B C
Cost Accting- HW 1 \$70,000 Answer D is correct . The budgeted payment to the vendor is \$300,000. Of this amount, \$100,000 is to settle the beginning balance of accounts payable. Accordingly, the inventory purchases for Year 1 equal \$350,000 [(\$300,000 cash paid – \$100,000 beginning accounts payable) + (\$100,000 × 150%) ending accounts payable]. The cost of goods sold for a retailer equals purchases adjusted for the change in inventory. Given the budget assumptions, purchases is also the cost of goods sold because beginning and ending inventory are the same. Sales are therefore \$420,000 (\$350,000 purchases × 120%), and the budgeted gross margin is \$70,000 (\$420,000 sales – \$350,000 COGS). 15. Indirect labor is a Period cost. Prime cost. Conversion cost. Answer C is correct Conversion costs include direct labor and factory overhead. Because indirect labor is a component of factory overhead, indirect labor is a conversion cost. .