| Solutions to Supplementary Exercise Ch. 1 and 2 | ||||||||||||
| 1. | Schedule of cost of goods manufactured (for the year ended 31/12) | |||||||||||
| Direct materials: | ||||||||||||
| Raw materials inv. 01/01 | $10,000 | |||||||||||
| Add: purchases of raw materials | 150,000 | |||||||||||
| Raw materials available for use | 160,000 | |||||||||||
| Deduct: raw materials inv. 31/12 | 20,000 | |||||||||||
| Raw materials used in production | $140,000 | |||||||||||
| Direct labor | $200,000 | |||||||||||
| Manufacturing overhead: | ||||||||||||
| Depreciation, factory | $60,000 | |||||||||||
| Indirect labor | 100,000 | |||||||||||
| Utilities, factory | 40,000 | |||||||||||
| Insurance, factory | 10,000 | |||||||||||
| Lubricants for machines | 15,000 | |||||||||||
| Total overhead costs | 225,000 | |||||||||||
| Total manufacturing costs | $565,000 | |||||||||||
| Add: work in process inv. 01/01 | 25,000 | |||||||||||
| $590,000 | ||||||||||||
| Deduct: work in process inv. 31/12 | 5,000 | |||||||||||
| Cost of goods manufactured | $585,000 | |||||||||||
| 2. | a. | |||||||||||
| Schedule of cost of goods manufactured (for the year ended 31/12) | ||||||||||||
| Direct materials | $1,200 | |||||||||||
| Direct labor | 1,500 | |||||||||||
| Manufacturing overhead: | ||||||||||||
| Indirect labor | $400 | |||||||||||
| Rent | 300 | |||||||||||
| Maintenance | 100 | |||||||||||
| Utilities | 200 | 1,000 | ||||||||||
| Total manufacturing costs | $3,700 | |||||||||||
| Add: beg. WIP | 800 | |||||||||||
| $4,500 | ||||||||||||
| Deduct: end. WIP | 600 | |||||||||||
| Cost of goods manufactured | $3,900 | |||||||||||
| b. | ||||||||||||
| Finished goods, beg. | $500 | |||||||||||
| Add: cost of goods manufactured | 3,900 | |||||||||||
| Goods available for sale | $4,400 | |||||||||||
| Finished goods, end. | 250 | |||||||||||
| Cost of goods sold | $4,150 | |||||||||||
| 3 | ||||||||||||
| Product Cost | ||||||||||||
| OC | SKC | VC | FC | DM | DL | MOH | SC | DC | ||||
| Facility rent | x | x | x | |||||||||
| Utilities | x | x | x | |||||||||
| Personal computer depreciation | x | x | x | |||||||||
| Equipment rent | x | x | x | |||||||||
| Material cost | x | x | x | |||||||||
| Labor cost | x | x | x | |||||||||
| Present Salary | x | x | ||||||||||
| Advertising | x | x | x | |||||||||