Managerial Accounting
Managerial Accounting
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6. Given the following information for a retailer, compute the cost of goods sold.
Calculation of Cost of Goods Sold | ||||
Cost of goods sold: | ||||
Plus: | ||||
Less: | ||||
Cost of goods sold |
7. Erickson Industries is calculating its Cost of Goods Manufactured at year-end. Erickson’s
accounting records show the following: The Raw Materials Inventory account had a beginning balance of $ 12,000 and an ending balance of $ 20,000. During the year, the company purchased $ 62,000 of direct materials. Direct labor for the year totaled
$ 127,000, while manufacturing overhead amounted to $ 156 ,000. The Work in Process Inventory account had a beginning balance of $ 23,000 and an ending balance of $ 19,000. Assume that Raw Materials Inventory contains only direct materials. Compute the Cost of Goods Manufactured for the year. (Hint: The first step is to calculate the direct materials used during the year.)
Start by calculating the direct materials used during the year.
Erickson Industries | |
Calculation of Direct Materials Used | |
For Current Year | |
Erickson
Industries is calculating its Cost of Goods Manufactured at year-end.
Erickson’s
accounting records show the following: The Raw Materials Inventory account had a beginning balance of
$ 12 comma 000
and an ending balance of
$ 20 comma 000
.
During the year, the company purchased
$ 62 comma 000
of direct materials. Direct labor for the year totaled
$ 127 comma 000
,
while manufacturing overhead amounted to
$ 156 comma 000
.
The Work in Process Inventory account had a beginning balance of
$ 23 comma 000
and an ending balance of
$ 19 comma 000
.
Assume that Raw Materials Inventory contains only direct materials. Compute the Cost of Goods Manufactured for the year.
(Hint:
The first step is to calculate the direct materials used during the year.)
Start by calculating the direct materials used during the year.
Erickson Industries | |||
Calculation of Direct Materials Used | |||
For Current Year | |||
Plus: | |||
Less: | |||
Direct materials used |
Compute the Cost of Goods Manufactured for the year.
Erickson Industries |
||||
Calculation of Cost of Goods Manufactured | ||||
For Current Year | ||||
Plus: | Manufacturing costs incurred | |||
Less: | ||||
Cost of goods manufactured |
8. Suppose the smartphone manufacturer Orange Electronics provides the following information for its costs last month (in millions):
Requirements 1, 2 and 3. Classify each of these costs according to its place in the value chain. Within the production category, break the costs down further into three subcategories: Direct Materials, Direct Labor, and Manufacturing Overhead. Then calculate the total cost for each value chain category. (Enter amounts in millions. If a box is not used in the table, leave the box empty; do not enter a zero.)
Orange Electronics | ||||||||
Value Chain Cost Classification | ||||||||
Production | ||||||||
Cost | R and D | Design | Direct Materials | Direct Labor | Manufacturing Overhead | Marketing | Distribution | Customer Service |
Delivery expense | ||||||||
Salaries of salespeople |
||||||||
Chipset |
||||||||
Exterior case for phone |
||||||||
Assembly-line workers’ |
||||||||
wages | ||||||||
Technical support hotline |
||||||||
Depreciation on plant |
||||||||
and equipment | ||||||||
Rearrange production |
||||||||
process | ||||||||
1-800 (toll-free) line for |
||||||||
customer orders | ||||||||
Scientists’ salaries |
||||||||
Total costs |
Production | ||||||||
Cost | R and D | Design | Direct Materials | Direct Labor | Manufacturing Overhead | Marketing | Distribution | Customer Service |
Requirement 4. How much are the total product costs?
First determine the formula, then calculate the total product costs. (Enter amounts in millions.)
______________________ + __________________ + = Total product cost
___________________ + _____________________ + ____________________ = __________________
Requirement 5. How much are the total prime costs?
First determine the formula, then calculate the total prime costs. (Enter amounts in millions.)
+ | = | Total prime cost | |||
+ | = |
Requirement 6. How much are the total conversion costs?
First determine the formula, then calculate the total conversion costs. (Enter amounts in millions.)
+ | = | Total conversion cost | |||
+ | = |
9. Compute the Cost of Goods Manufactured and Cost of Goods Sold for East Aquatic Company for the most recent year using the amounts described next. Assume that Raw Materials Inventory contains only direct materials.
Start the calculation for cost of goods manufactured by calculating the direct materials used.
East Aquatic Company | ||
Calculation of Direct Materials Used | ||
For Current Year | ||
Plus: | ||
Less: | ||
Direct materials used |
Calculate the cost of goods manufactured.
East Aquatic Company |
||||
Calculation of Cost of Goods Manufactured | ||||
For Current Year | ||||
Plus: | Manufacturing costs incurred | |||
Less: | ||||
Cost of goods manufactured |
Now calculate the cost of goods sold.
East Aquatic Company | ||||
Calculation of Cost of Goods Sold | ||||
For Current Year | ||||
Plus: | ||||
Less: | ||||
Cost of goods sold |
10. Harnum Manufacturing found the following information in its accounting records: $ 513,500 of direct materials used, $ 223,500
of direct labor, and $ 773,175 of manufacturing overhead. The Work in Process Inventory account had a beginning balance of $ 81,300 and an ending balance of $ 91,250. Compute the company’s Cost of Goods Manufactured.
Complete the following table to determine the cost of goods manufactured.
Harnum Manufacturing | ||
Calculation of Cost of Goods Manufactured | ||
For Current Year | ||
Plus: | Manufacturing costs incurred | |
Less: | ||