Managerial Accounting
Problem One Cost Concepts and Cost Flow (8 points)
The following information is from MM wooden bed Co. for September:
Wood used in production
Carpenters salary
Factory supervisors salary
Factory security guard and janitor salary
Sales persons salary
CEO and CFO salary
Advertisement expense
Depreciation of factory equipment
Factory utilities
Oil and lubricants for factory equipment, and other miscellaneous materials used in production
Wood inventory, Sept. 1
Work-in-process inventory, Sept. 1
Finished wooden beds, Sept. 1
Wood purchases
Cost of goods manufactured
Sales revenue
Gross margin
Net income
Assume there are no other expenses or costs in MM Co.
$95,000
$67,000
$15,000
$7,000
$12,000
$41,000
$44,000
$26,000
$16,500
$7,500
$25,000
$6,000
$101,000
$102,000
$233,000
$344,000
$127,000
$30,000
Required:
1.
2.
3.
4.
5.
6.
Compute the cost of goods sold in September.
Compute the balance in finished wooden beds inventory at September 30.
Compute the total manufacturing overhead.
What’s the amount of total manufacturing cost in September?
Compute the balance in work-in-process inventory at September 30.
Compute the balance in wood at September 30.
1
Problem Two Job-Order Costing (12 points)
Anthony’s Furniture Inc. (Anthony’s) manufactures furniture in Mississauga. Anthony’s uses job-order costing system and uses machine hours to allocate overhead costs. Estimated overhead for the year was $800,000 and estimated machine hours were 50,000 hours. Total machine hours used to the end of November were 45,000 hours. Total actual overhead to the end of November was $680,000. Raw materials inventory at the end of November was $400,000. Anthony’s uses a first in first out basis for inventory and calculating COGS. Direct labor is paid $20 per hour in
2013. A summary of Anthony’s finished goods inventory for the end of November (beginning of
December) is shown below:
Description
Chairs
Large tables
The following information is from MM wooden bed Co. for September:
Wood used in production
Carpenters salary
Factory supervisors salary
Factory security guard and janitor salary
Sales persons salary
CEO and CFO salary
Advertisement expense
Depreciation of factory equipment
Factory utilities
Oil and lubricants for factory equipment, and other miscellaneous materials used in production
Wood inventory, Sept. 1
Work-in-process inventory, Sept. 1
Finished wooden beds, Sept. 1
Wood purchases
Cost of goods manufactured
Sales revenue
Gross margin
Net income
Assume there are no other expenses or costs in MM Co.
$95,000
$67,000
$15,000
$7,000
$12,000
$41,000
$44,000
$26,000
$16,500
$7,500
$25,000
$6,000
$101,000
$102,000
$233,000
$344,000
$127,000
$30,000
Required:
1.
2.
3.
4.
5.
6.
Compute the cost of goods sold in September.
Compute the balance in finished wooden beds inventory at September 30.
Compute the total manufacturing overhead.
What’s the amount of total manufacturing cost in September?
Compute the balance in work-in-process inventory at September 30.
Compute the balance in wood at September 30.
1
Problem Two Job-Order Costing (12 points)
Anthony’s Furniture Inc. (Anthony’s) manufactures furniture in Mississauga. Anthony’s uses job-order costing system and uses machine hours to allocate overhead costs. Estimated overhead for the year was $800,000 and estimated machine hours were 50,000 hours. Total machine hours used to the end of November were 45,000 hours. Total actual overhead to the end of November was $680,000. Raw materials inventory at the end of November was $400,000. Anthony’s uses a first in first out basis for inventory and calculating COGS. Direct labor is paid $20 per hour in
2013. A summary of Anthony’s finished goods inventory for the end of November (beginning of
December) is shown below:
Description
Chairs
Large tables