Chapter 02 and 04 Extra Problems

ACCT-611
Chapters 2 & 4 Extra Problems Cost of Goods Manufactured and Cost of Goods Sold
To be submitted to instructor in a timely manner 1. ZHENG Manufacturing had the following data for the period just ended: Work in process, Dec. 31 25,000 Finished goods, Jan. 1 60,000 Finished goods, Dec. 31 40,000 Direct materials used 120,000 Direct labor 220,000 Administration 68,000 Sales 800,000 Administrative expense 44,000 Other factory overhead 93,000 Indirect materials 19,000 Indirect labor 33,000 Required: Calculate ZHENG s COGM and cost of goods sold (COGS).
2.
Hampton Company had the following inventory balances at the beginning and end of the year: January 1 $ 50,000 130,000 280,000 December 31 $ 35,000 170,000 255,000
Raw material Work in process Finished goods
During the year, the company purchased $100,000 of raw material and spent $340,000 on direct labor. Other data: Manufacturing overhead incurred, $450,000; sales, $1,560,000; selling and administrative expenses, $90,000; income tax rate, 30%. Required: Calculate: A. Cost of goods manufactured. B. Cost of goods sold. 3. CHAMPION Manufacturing Company uses a normal costing system. The activity base for all overhead costs is direct labor hours. All goods which were produced during the period were completed and sold during the period. Costs of manufacturing and non-manufacturing for the current period are: Estimated $200,000 1,000 $500,000 $128,000 $125,000 3,000 $130,000 $200,000 $100,000 $140,000 Actual 250,000 1,800 500,000 240,000 120,000 5,000 135,000 110,000 350,000 121,000
Fixed selling expenses Number of units produced Administrative expenses Direct labor Direct materials Direct labor hours Indirect labor Indirect materials Other factory overhead Variable selling expenses
ACCT-611
To be submitted to instructor in a timely manner
Required: a) b) c) d)
4.
Calculate POR, Calculate Applied Manufacturing overhead (MOH), Calculate the cost of 1 unit of the product (cost/unit), Calculate Over/underapplied MOH
Flow of Costs, Missing Values The Morton Company recorded the following transactions for February 20x1: Materials $100,000 18,000 A Work in Process $ 8,000 20,000 90,000 B Finished Goods $ E 30,000
Purchases Beginning inventory Ending inventory Direct materials used Direct labor Manufacturing overhead (includes indirect materials used of $10,000) Transferred to finished goods Cost of goods sold
115,000 C D
Sales were $560,000, with sales prices determined by adding a 40% markup to the firms manufacturing cost. The total cost of direct materials used, direct labor, and manufacturing overhead during the month was $285,000. Required: Calculate the missing values.
5.
Fixed and Variable Cost Behavior Mighty Muffler, Inc., operates an automobile service facility. The table below shows the cost incurred during a month when 600 mufflers were replaced. Number of Muffler Replacements 500 600 700 Total costs: Fixed costs Variable costs Total costs Cost per muffler replacement: Fixed cost Variable cost Total cost per muffler replacement A B E $ 8,400 6,000 $14,400 C D F
G J M
H K N
I L O
Required: Fill in the missing amounts, labeled A through O, in the table.
ACCT-611
To be submitted to instructor in a timely manner 6.. Schedule of Cost of Goods Manufactured Woodland Canning Company incurred the following costs during the year: Direct material used Direct labor Manufacturing overhead $185,000 60,000 126,000
The firm's predetermined overhead rate is 210% of direct labor cost. The January 1 inventory balances were as follows: Raw-material inventory Work-in-process inventory Finished-goods inventory $ 12,500 19,500 21,000
Each of these inventory balances was 10% higher at the end of the year. Required: A. Determine the overapplied or underapplied overhead for the year. B. Prepare a schedule of cost of goods manufactured for the year. C. What was cost of goods sold for the year?
7.
Project Costing in Service Industry Norton & Associates is an interior decorating firm in Miami. The following costs were incurred in the firm's project to redecorate the mayor's offices: Direct material Direct professional labor $ 12,500 24,000
The firm's budget for the year included the following estimates: Budgeted overhead Budgeted direct professional labor $400,000 250,000
Overhead is applied to contracts by using a predetermined overhead rate that is based on direct professional labor cost. Actual professional labor during the year was $260,000 and actual overhead was $389,000. Required: A. Determine the total cost to redecorate the mayor's offices. B. Calculate the under- or overapplied overhead for the year. Be sure to label your answer.
ACCT-611
To be submitted to instructor in a timely manner 8. DAVIS, Inc., which uses a job-costing system, is a labor-intensive firm, with many skilled craftspeople on the payroll. Job no. 789 was the only job in process on January 1, having costs of $30,000 as of that date. Direct materials used and direct labor incurred during January were: Job no. 789 Job no. 790 Job no. 791 $2,000 9,000 14,000 $6,000 10,000 8,000
Job no. 791 was the only job in production (in process) as of January 31. The firm uses normal costing to measure costs. Required: a) Assume that the company decided to use direct labor cost as its cost driver (allocation base). If the budgeted amount of direct labor cost and manufacturing overhead are estimated to be $200,000 and $600,000, respectively, what is the firm's predetermined overhead rate (POR)? b) Compute the cost of work-in-process inventory as of January 31. c) Compute the cost of jobs completed or COGM during January.

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ACCT-611

Raw material Work in process Finished goods

Required: Fill in the missing amounts, labeled A through O, in the table.

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