Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 2, Problem 38P
The following selected information was extracted from the 20x1 accounting records of Lone Oak Products:
*Seventy-five percent of the company’s building was devoted to production activities; the remaining 25 percent was used for selling and administrative functions.
Inventory data:
*The January 1 and December 31 finished-goods inventory consisted of 1,350 units and 1,190 units, respectively.
Required:
- 1. Calculate Lone Oak’s manufacturing overhead for the year.
- 2. Calculate Lone Oak’s cost of goods manufactured.
- 3. Compute the company’s cost of goods sold.
- 4. Determine net income for 20x1, assuming a 30% income tax rate.
- 5. Determine the number of completed units manufactured during the year.
- 6. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following data change: indirect labor is $115,000 and other
factory costs amount to $516,000.
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The following selected information was extracted from the 20x1 accounting records of Lone Oak Products:
Raw material purchases
Direct labor
Indirect labor
Selling and administrative salaries
Building depreciation*
Other selling and administrative expenses
Other factory costs
Sales revenue ($130 per unit)
*Seventy-five percent of the company's building was devoted to production activities; the remaining 25 percent was used
for selling and administrative functions.
Inventory data:
January 1
$ 15,800
35,700
111,100
December 31
$ 18,200
62,100
97,900
Cost of goods sold
175,000
254,000
109,000
133,000
80,000
195,000
344,000
1,495,000
3. Compute the company's cost of goods sold.
$
Raw material
Work in process
Finished goods*
*The January 1 and December 31 finished-goods inventory consisted of 1,350 units and 1,190 units, respectively.
The following data are taken from the
general ledger and other records of
Du-sik Manufacturing on January 31,
the end of the first month of
operations in the current fiscal year:
Sales - 75,000; Materials inventory
(January 1) - 25,000; Work in process
inventory (January 1) - 24,000;
Finished goods inventory (January 1) -
32,000: Materials Purchased - 21,000:
Direct labor cost - 18,000; Factory
overhead (including 1,000 of indirect
materials used and 3,000 of indirect
labor cost) - 12,000; Selling and
Administrative expenses - 10,000;
Inventories at January 31: Materials -
22,000; Work in Process - 20,000;
Finished Goods - 30,000. What is the
amount of cost of goods
manufactured? *
Wyandotte Company provided the following information for the last calendar year:
Beginning inventory:Direct materials $25,900Work in process 44,700Ending inventory:Direct materials $18,000Work in process 22,700
During the year, direct materials purchases amounted to $256,900, direct labor cost was$176,000, and overhead cost was $308,400. There were 40,000 units produced.Required:1. Calculate the total cost of direct materials used in production.2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost.3. Of the unit manufacturing cost calculated in Requirement 2, $6.62 is direct materials and$7.71 is overhead. What is the prime cost per unit? Conversion cost per unit?
Chapter 2 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 2 - Distinguish between product costs and period...Ch. 2 - Why are product costs also called inventoriable...Ch. 2 - What is the most important difference between a...Ch. 2 - List several product costs incurred in the...Ch. 2 - Prob. 5RQCh. 2 - Why is the cost of idle time treated as...Ch. 2 - Explain why an overtime premium is included in...Ch. 2 - Prob. 8RQCh. 2 - Give examples to illustrate how the city of Tampa...Ch. 2 - Distinguish between fixed costs and variable...
Ch. 2 - How does the fixed cost per unit change as the...Ch. 2 - Prob. 12RQCh. 2 - Prob. 13RQCh. 2 - Would each of the following characteristics be a...Ch. 2 - List three direct costs of the food and beverage...Ch. 2 - List three costs that are likely to be...Ch. 2 - Which of the following costs are likely to be...Ch. 2 - Distinguish between out-of-pocket costs and...Ch. 2 - Define the terms sunk cost and differential cost.Ch. 2 - Distinguish between marginal and average costs.Ch. 2 - Prob. 21RQCh. 2 - Two years ago the manager of a large department...Ch. 2 - Indicate whether each of the following costs is a...Ch. 2 - For each case below, find the missing amount.Ch. 2 - A foundry employee worked a normal 40-hour shift,...Ch. 2 - A loom operator in a textiles factory earns 16 per...Ch. 2 - Consider the following costs that were incurred...Ch. 2 - Alexandria Aluminum Company, a manufacturer of...Ch. 2 - Prob. 30ECh. 2 - A hotel pays the phone company 100 per month plus...Ch. 2 - Prob. 32ECh. 2 - Orbital Communications, Inc. manufactures...Ch. 2 - The state Department of Education owns a computer...Ch. 2 - Prob. 35ECh. 2 - List the costs that would likely be included in...Ch. 2 - Consider the following cost items: 1. Salaries of...Ch. 2 - The following selected information was extracted...Ch. 2 - Prob. 39PCh. 2 - Mason Corporation began operations at the...Ch. 2 - Determine the missing amounts in each of the...Ch. 2 - The following cost data for the year just ended...Ch. 2 - The following data refer to San Fernando Fashions...Ch. 2 - Highlander Cutlery manufactures kitchen knives....Ch. 2 - Cape Cod Shirt Shop manufactures T-shirts and...Ch. 2 - Heartland Airways operates commuter flights in...Ch. 2 - San Diego Sheet Metal, Inc. incurs a variable cost...Ch. 2 - Hightide Upholstery Company manufactures a special...Ch. 2 - For each of the following costs, indicate whether...Ch. 2 - Indicate for each of the following costs whether...Ch. 2 - Water Technology, Inc. incurred the following...Ch. 2 - The following terms are used to describe various...Ch. 2 - Several costs incurred by Bayview Hotel and...Ch. 2 - Refer to Exhibit 23, and answer the following...Ch. 2 - Roberta Coy makes custom mooring covers for boats....Ch. 2 - The Department of Natural Resources is responsible...Ch. 2 - Prob. 57PCh. 2 - Prob. 58PCh. 2 - CompTech, Inc. manufactures printers for use with...Ch. 2 - You just started a summer internship with the...
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