Managerial accounting solution

CHAPTER 1 SOLUTIONS TO EXERCISES—SET B EXERCISE 1-1B (a) Factory utilities..... utilities....... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. Depreciation on factory equipment.. equipment .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... Indirect Indir ect factory factor y labor ...... ......... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ..... .. Indirect Indir ect materials mater ials ...... ......... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... Factory Factor y manager’s manage r’s salary ...... ......... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ..... .. Property taxes on factory building .... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. Factory Factor y repairs repair s ...... ......... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ..... Manufacturing overhead .... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... ....

$ 15,600 12,650 48,900 80,800 13,000 2,500 2,000 $175,450

(b) Direct materials .... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. Direct Direc t labor ...... ......... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ..... .. Manufacturing overhead .... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... Product costs... costs ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... .....

$137,600 89,100 175,450 $402,150 $402,1 50

(c) Depreciation Depreciation on delivery delivery trucks.. trucks.... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. Sales salaries.. salaries .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. Repairs to office equipment..... equipment....... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. Advertising Advert ising ...... ......... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ..... .. Office Offic e supplies suppli es used... used ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... Period costs ...... ......... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...

$

8,800 46,400 2,300 18,000 5,640 $ 81,140

EXERCISE 1-2B (a) (a)

Deli Delive very ry ser servi vice ce (pr (prod oduc uct) t) cos costs ts:: Indirect materials .... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... Depr Deprec ecia iatio tion n on deliv deliver ery y equip equipme ment nt ................................... Dispatcher’s Dispatcher’s salary... salary..... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... Gas Gas and and oil oil for deli delive very ry truc trucks ks .............................................. Drivers’ Drivers’ salaries.. salaries.... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. Delivery Delivery equipment equipment repairs repairs .... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. Total .... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... ....

Copyright © 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, Managerial  Accounting, 5/e, Exercise B/Problem Set C

$ 8,400 11,20 11,200 0 7,000 2,200 2,200 15,000 300 $44,100

(For Instructor Use Only)

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EXERCISE 1-2B (Continued) (b)

Period costs: Property taxes on office building.......................................... CEO’s salary ................................................................................ Advertising ................................................................................... Office supplies ............................................................................ Office utilities............................................................................... Repairs on office equipment .................................................. Total......................................................................................

$ 2,870 22,000 1,600 650 990 680 $28,790

EXERCISE 1-3B (a) Work-in-process, 1/1..................................... Direct materials used.................................... Direct labor....................................................... Manufacturing overhead Depreciation on plant ........................... $60,000 Factory supplies used.......................... 25,000 Property taxes on plant ....................... 19,000 Total manufacturing overhead .................. Total manufacturing costs.......................... Total cost of work-in-process.................... Less: Ending work-in-process................... Cost of goods manufactured .....................

$ 10,000 $120,000 110,000

104,000

(b) Finished goods, 1/1 ....................................... Cost of goods manufactured .................... Cost of goods available for sale ............... Finished goods, 12/31 .................................. Cost of goods sold ........................................

334,000 344,000 14,000 $330,000 $ 60,500 330,000 390,500 50,600 $339,900

EXERCISE 1-4B Total raw materials available for use: Direct materials used.................................................................. Add: Raw materials inventory (12/31) ................................... Total raw materials available for use.....................................

$190,000 17,500 $207,500

Raw materials inventory (1/1): Direct materials used.................................................................. Add: Raw materials inventory (12/31) ................................... Less: Raw materials purchases .............................................. Raw materials inventory (1/1)...................................................

$190,000 17,500 165,000 $ 42,500

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Copyright © 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

EXERCISE 1-4B (Continued) Total cost of work in process: Cost of goods manufactured....................................................... Add: Work in process (12/31)..................................................... Total cost of work in process ......................................................

$550,000 80,000 $630,000

Total manufacturing costs: Total cost of work in process ....................................................... Less: Work in process (1/1) ......................................................... Total manufacturing costs.............................................................

$630,000 210,000 $420,000

Direct labor: Total manufacturing costs............................................................. Less: Total overhead...................................................................... Direct materials used ......................................................... Direct labor .........................................................................................

$420,000 119,000 190,000 $111,000

EXERCISE 1-5B A + $57,400 + $46,500 = $175,650 A = $71,750

$252,100 – $11,000 = F F = $241,100

$175,650 + B = $221,500 B = $45,850

$130,600 + G + $102,000 = $273,700 G = $41,100

$221,500 – C = $180,725 C = $40,775

$273,700 + H = $335,000 H = $61,300

$68,400 + $86,500 + $81,600 = D D = $236,500

$335,000 – $90,000 = I I = $245,000

$236,500 + $15,600 = E E = $252,100

Copyright © 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

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EXERCISE 1-5B (Continued) Additional explanation to EXERCISE 1-5B solution: Case A (a) Total manufacturing costs............................................................. Less: Manufacturing overhead..................................................... Direct labor.............................................................................. Direct materials used.......................................................................

$175,650 (46,500) (57,400) $ 71,750

(b) Total cost of work in process........................................................ Less: Total manufacturing costs................................................ Work in process (1/1/11) .................................................................

$221,500 175,650 $ 45,850

(c) Total cost of work in process........................................................ Less: Cost of goods manufactured ........................................... Work in process (12/31/11).............................................................

$221,500 180,725 $ 40,775

Case B (d) Direct materials used....................................................................... Direct labor .......................................................................................... Manufacturing overhead................................................................. Total manufacturing costs .............................................................

$ 68,400 86,500 81,600 $236,500

(e) Total manufacturing costs............................................................. Work in process (1/1/11) ................................................................. Total cost of work in process........................................................

$236,500 15,600 $252,100

(f)

$252,100 11,000 $241,100

Total cost of work in process........................................................ Less: Work in process (12/31/11) ............................................... Cost of goods manufactured ........................................................

Case C (g) Total manufacturing costs............................................................. Less: Manufacturing overhead.................................................... Direct materials used.......................................................... Direct labor ..........................................................................................

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Copyright © 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

$273,700 (102,000) (130,600) $ 41,100

(For Instructor Use Only)

EXERCISE 1-5B (Continued) (h) Total cost of work in process ....................................................... Less: Total manufacturing costs................................................ Work in process (1/1/11)..................................................................

$335,000 273,700 $ 61,300

(i)

$335,000 90,000 $245,000

Total cost of work in process ....................................................... Less: Work in process (12/31/11)............................................... Cost of goods manufactured........................................................

EXERCISE 1-6B (a) (a) $127,000 + $140,000 + $89,000 = $356,000 (b) $356,000 + $33,000 – $360,000 = $29,000 (c) $430,000 – ($200,000 + $123,000) = $107,000 (d) $40,000 + $470,000 – $430,000 = $80,000 (e) $257,000 – ($80,000 + $100,000) = $77,000 (f)

$257,000 + $60,000 – $80,000 = $237,000

(g) $308,000 – ($67,000 + $75,000) = $166,000 (h) $308,000 + $45,000 – $270,000 = $83,000 (b)

HEINTZ COMPANY Cost of Goods Manufactured Schedule For the Year Ended December 31, 2011 Work in process, January 1...................................... Direct materials ............................................................ Direct labor .................................................................... Manufacturing overhead ........................................... Total manufacturing costs............................... Total cost of work in process.................................. Less: Work in process inventory, December 31 .................................................... Cost of goods manufactured...................................

Copyright © 2010 John Wiley & Sons, Inc.

$ 33,000 $127,000 140,000 89,000

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

356,000 389,000 29,000 $360,000

(For Instructor Use Only)

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EXERCISE 1-7B (a)

TART CORPORATION Cost of Goods Manufactured Schedule For the Month Ended June 30, 2011 Work in process, June 1 .................................. Direct materials used........................................ Direct labor........................................................... Manufacturing overhead Indirect labor............................................... Factory manager’s salary....................... Indirect materials....................................... Maintenance, factory equipment.......... Depreciation, factory equipment.......... Factory utilities .......................................... Total manufacturing overhead....... Total manufacturing costs .............................. Total cost of work in process......................... Less: Work in process, June 30................... Cost of goods manufactured .........................

(b)

$ 3,000 $25,000 30,000 $4,500 5,000 2,200 1,800 1,400 400 70,300 73,300 2,800 $70,500

TART CORPORATION Income Statement (Partial) For the Month Ended June 30, 2011 Net sales............................................................................ Cost of goods sold Finished goods inventory, June 1................... Cost of goods manufactured [from (a)]............ Cost of goods available for sale....................... Finished goods inventory, June 30................. Cost of goods sold ...................................... Gross profit......................................................................

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15,300

Copyright © 2010 John Wiley & Sons, Inc.

$85,100 $ 5,000 70,500 75,500 9,500

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

66,000 $19,100

(For Instructor Use Only)

EXERCISE 1-8B (a) PARE, ASH, AND TOCY Schedule of Cost of Contract Services Provided For the Month Ended August 31, 2011 Supplies used (direct materials).......................................... $ 2,500 Salaries of professionals (direct labor) ............................. 15,600 Service overhead: Utilities for contract operations ..................................... $1,900 Contract equipment depreciation.................................. 900 Insurance on contract operations ................................. 800 Janitorial services for professional offices................ 300 Total overhead .............................................................. 3,900 Cost of contract services provided............................... $22,000 (b) The costs not included in the cost of contract services provided would all be classified as period costs. As such, they would be reported on the income statement under administrative expenses. EXERCISE 1-9B (a) Work-in-process, 1/1.................................... Direct materials Materials inventory, 1/1 ...................... $ 22,000 Materials purchased ............................ 170,000 Materials available for use ................ 192,000 Less: Materials inventory, 12/31..... 30,000 Direct materials used .................................. Direct labor ..................................................... Manufacturing overhead............................ Total manufacturing costs ........................ Total cost of work-in-process................... Less: Work-in-process, 12/31.................. Cost of goods manufactured.................... (b) Sales ................................................................. Cost of goods sold Finished goods, 1/1 ............................. Cost of goods manufactured .......... Cost of goods available for sale ..... Finished goods, 12/31 ........................ Cost of goods sold ....................... Gross profit..................................................... Copyright © 2010 John Wiley & Sons, Inc.

$ 18,500

$162,000 200,000 183,000 545,000 563,500 17,200 $546,300 $920,000 $ 27,000 546,300 573,300 31,000

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

542,300 $377,700 (For Instructor Use Only)

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EXERCISE 1-9B (Continued) (c) Current assets Inventories Finished goods........................................................ Work in process ..................................................... Raw materials ..........................................................

$31,000 17,200 30,000

$78,200

(d) In a merchandising company’s income statement, the only difference would be in the computation of cost of goods sold. Beginning and ending finished goods would be replaced by beginning and ending merchandise inventory, and cost of goods manufactured would be replaced by purchases. In a merchandising company’s balance sheet, there would be one inventory account (merchandise inventory) instead of three. EXERCISE 1-10B (a)

KURT MANUFACTURING Cost of Goods Manufactured Schedule For the Month Ended June 30, 2011 Work in process inventory, June 1 ................. $ 5,000 Direct materials Raw materials inventory, June 1............. $10,000 Raw materials purchases .......................... 64,000 Total raw materials available for use ........ 74,000 Less: Raw materials inventory, June 30..... 13,100 Direct materials used.................................. 60,900 Direct labor.............................................................. 57,000 Manufacturing overhead Indirect labor.................................................. $7,500 Factory insurance ........................................ 4,000 Machinery depreciation.............................. 5,000 Factory utilities ............................................. 3,100 Machinery repairs ........................................ 1,800 Miscellaneous factory costs..................... 1,500 Total manufacturing overhead........... 22,900 Total manufacturing costs ................................. 140,800 Total cost of work in process............................ 145,800 Less: Work in process inventory, June 30 ....... 13,000 Cost of goods manufactured ............................ $132,800

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Copyright © 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

EXERCISE 1-10B (Continued) (b)

KURT MANUFACTURING (Partial) Balance Sheet June 30, 2011 Current assets Inventories Finished goods.................................................. Work in process ................................................ Raw materials.....................................................

$ 6,000 13,000 13,100

$32,100

EXERCISE 1-11B (a) Raw Materials account: (5,000 – 4,650) X $8 = $2,800 Work in Process account: (4,600 X 10%) X $8 = $3,680 Finished Goods account: (4,600 X 90% X 25%) X $8 = $8,280 Cost of Goods Sold account: (4,600 X 90% X 75%) X $8 = $24,840 Selling Expenses account: 50 X $8 = $400 Proof of cost of head lamps allocated (5,000 X $8 = $40,000) Raw materials Work in process Finished goods Cost of goods sold Selling expenses   Total (b) To:

$ 2,800 3,680 8,280 24,840 400 $40,000

Chief Accountant

From:

Student

Subject:

Statement Presentation of Accounts

Two accounts will appear in the income statement. Cost of Goods Sold will be deducted from net sales in determining gross profit. Selling expenses will be shown under operating expenses and will be deducted from gross profit in determining net income. Sometimes, the calculation for Cost of Good Sold is shown on the income statement. In these cases, the balance in Finished Goods inventory would also be shown on the income statement. The other accounts associated with the head lamps are inventory accounts which contain end-of-period balances. Thus, they will be reported under inventories in the current assets section of the balance sheet in the following order: finished goods, work in process, and raw materials. Copyright © 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

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*EXERCISE 1-12B

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   0    0    8  ,    2    3    1

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Copyright © 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

SOLUTIONS TO PROBLEMS—SET C

PROBLEM 1-1C

   d   t   s   o  s    i   r   o   e    P   C

   0   0    0   0    0  ,    0  ,    8   5

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   )   a    (

   0    0   0   0    0    0   0   0    2    5   0  ,  ,    7    0   3    0   1    0   $

   0   0   0    0    0   0   0    0    7   0  ,   0  ,    8    6   3

   0   0    0   0    0  ,    8  ,    2   7    1    $

   0    0    0  ,    5    5    $    0    0    0  ,    0    2    $

   0   0    0   0    0  ,    0  ,    0   5    0   5    0   $    0   0    0   0    0  ,    0  ,    0   0    0   2    0   $

  g   n    i    d    l    i    t   s   u   r   n   g    b   e   e   n    i    k   y   g   r   m    d   r    l   p   n   o   i    i    t   i   o    t   u   e   w  u    d   c   y    l    b  n   c   e   q    i    i   e   r   a   s   u   y   f   m   f   l   s   y   a   t    f   i   n  e   l   m   r   e    b   a   o   l   e   i    t   a   e    t   p  y   r   o    I   n   r    i   c   o    l   o   s   m  s   c   u  r    t   a   l   y   i    t    f    l    t   c   r   b   f   e   s   ’   s    t   s   e   n  a   q   t   o   a   e   o  a   o   s   r   h  o   f   e   c    f   m  n  m    i    C   o  e   r   s   n  y   a   r   n   e   o   e   g    f   c   a   o  s   o  r    l   o   s   s   g    f   o  n  a   r   s   s   n  u   e   n   f   i   n   t   s   o  a   o  o   c   a   g  m   o  c   o   i   r   t    i    i   n  m   a   n    t    t   e   e   s   f   r   m  a   f   e   o   a    i    t   a   n   o  s   f   i   s   o   i   n  c   a   a   n  y   i   c   e   n   c   c   o  a    t   c   l    i    l   r   s   e    l   r   m    t   o  e   s   e   y   p  e   e   r   t   r    t   r   e    t   n   c    i   e   g   u    i   c   v   l   p  n   w   l   p   p   s    i   a   a   a   d  a   e   e   s   a   t   u   e   i   n    M    F   A   S   D   R   I    R   U   S   W    D   M

Copyright © 2010 John Wiley & Sons, Inc.

   0   0   0   0    0   0   0   0    0  ,    0  ,    8  ,    8  ,    0   5   7   2    2   5   1   9    $    $

   t    d  s   a   o   e   c    h   r   n   o   e   i   v   t   s   o  c   u    l   g   s    d   a    t   i   n  o    i   s   r   r   r   e   r   o   t   o   p   u   l   c   a   b   t   a   a   c   n  m    l   a   t   o    f    t    t   o    i    t   c   c   u   T   c   e   e   n   r   a   u  r   i    d   i    D   D   M   o   r   p    l   a    t   o    T    )    b    (

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

   0    8  .    2    9    $   =    0    0    0  ,    1    /    0    0    8  ,    2    9    $   =    t   e   m    l   e    h   e    l   c   y   c   r   o    t   o   m   r   e   p    t   s   o   c   n   o    i    t   c   u    d   o   r    P

(For Instructor Use Only)

1-11

PROBLEM 1-2C

   0    0    0  ,    6    $

   d   t   s   o  s    i   r   o   e    P   C   g   n    i   r   d   u  a    t   e   c   h   a   r    f   u  e   v   n    O   s   a    t   s   M   o    C    t    t   r   c   c   o   u   e   b   r   a    d   i   o   r    D   L    P

   0   0   0   0    0   0   0    0   0   0   0    0   0   0    5  ,   5  ,    5  ,    4  ,    8   6   3  ,    1   7   3   1    5    1    $    $

   0    0    0  ,    5    6    $

  s    0    t   l   a    0   c   i   r    0   e  ,   r   e    0    i    t    D  a    6    M   $

   )   a    (

1-12

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   0   0    0   0    0  ,   0  ,    0   5    0   6    0   $    0   0    0   0    0  ,   0  ,    0   0    0   6    0   $

   )    )   5    (    4    (   g   n   g   i   n   d    i    l    i    d    l   u    i    b   y   r   u   a    b  y    l   r   a   y   o   m    )   r   t   s   e   o  c    2    t   s    t    (    )    I   a    ’    3    t   (   r   c   f    t   s   a   n   s    )   r   n    f   s   o   e   l   e   s   o    1   o   a   i    k   s   n   m    C   (    i   v   r    t   r   s   o  s   s   o   i   p  r    l   e   e   o   n  e   a   w  u   t   x    i   g   o   c   a   r   r   q  a   p    i   u   l    i   n   t   t   e   e   m   s   o    t   f   a   t   a   i   y   s   i   a   n   t   y   i   r    t   c   c   s   r   o  e   o  o  r   e   r   m  e   t   e   r   e   r   t   t    i   g    i   w  a   n   d  c   n  v   p  p   a   e  n  a   a   d  e   o   r    R   W    R   I    F   J   A   D   P

Copyright © 2010 John Wiley & Sons, Inc.

   0   0   0   0    0   0   0   0    0  ,    0  ,   3  ,    3  ,    0   5   5   0    6   6   1   4    1    $    $

 .    0    0    0  ,  .   5    0   6  .    0   $   0    0  .  .  ,   =   0    5    0    0   0  ,    0    0    6   0   7   0    8    6    $   =   5    $  ,   =    $    0   2   =  =    0    0   2    2    5  ,   X   0    1    5    /    /    2   2  ,    0   1    0    X   X   2   0   0    4   3   X   6  ,   2  ,    2   1   3   9   7    $   $   $   $   $    )   )   )   )   )    1    (   2    (   3    (   4    (   5    (

   t    d  s   a   o   e   c    h   r   n   s   o   e   i    t    t   v   s   o   l   s   o  c   u   c   a   g   d    i   n  o   n  r   r   i   r   o   e    i   o  r   u   p    t   t    t   l   c   a   b   a  c   a   u  m    l   a   t    d   t   t   f   o   u   o   c   c    T   r   e   e  n   r   a   p  r   i    l    i   a   D   D   M    t   o    T    )    b    (

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

   2    1  .    6    5    $   =    0    0    5  ,    2    /    0    0    3  ,    0    4    1    $   =    t   e    k   c   a   r   r   e   p    t   s   o   c   n   o    i    t   c   u    d   o   r    P

(For Instructor Use Only)

PROBLEM 1-3C

(a) Case A A = $6,300 + $3,000 + $6,000 = $15,300 $15,300 + $1,000 – B = $14,600 B = $15,300 + $1,000 – $14,600 = $1,700 $14,600 + C = $18,300 C = $18,300 – $14,600 = $3,700 D = $18,300 – $1,500 = $16,800 E = ($22,500 – $1,500) – $16,800 = $4,200 F = $4,200 – $2,700 = $1,500 Case B G + $4,000 + $5,000 = $16,000 G = $16,000 – $4,000 – $5,000 = $7,000 $16,000 + H – $2,000 = $20,000 H = $20,000 + $2,000 – $16,000 = $6,000 (I – $1,200) – K = $6,000 (I – $1,200) – $21,500 = $6,000 I = $1,200 + $21,500 + $6,000 = $28,700 (Note: Item I can only be solved after item K is solved.) J = $20,000 + $4,000 = $24,000 K = $24,000 – $2,500 = $21,500 $6,000 – L = $2,200 L = $3,800

Copyright © 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

1-13

PROBLEM 1-3C (Continued) (b)

CASE A Cost of Goods Manufactured Schedule Work in process, beginning....................................... Direct materials.............................................................. Direct labor...................................................................... Manufacturing overhead............................................. Total manufacturing costs ................................ Total cost of work in process.................................... Less: Work in process, ending................................ Cost of goods manufactured ....................................

(c)

$ 1,000 $6,300 3,000 6,000 15,300 16,300 1,700 $14,600

CASE A Income Statement Sales .................................................................................. Less: Sales discounts ................................................ Net sales........................................................................... Cost of goods sold Finished goods inventory, beginning ........... Cost of goods manufactured............................ Cost of goods available for sale...................... Finished goods inventory, ending.................. Cost of goods sold ..................................... Gross profit ..................................................................... Operating expenses ..................................................... Net income.......................................................................

$22,500 1,500 $21,000 $ 3,700 14,600 18,300 1,500 16,800 4,200 2,700 $ 1,500

CASE A (Partial) Balance Sheet Current assets Cash.......................................................................... Receivables (net).................................................. Inventories Finished goods ............................................ Work in process........................................... Raw materials ............................................... Prepaid expenses................................................. Total current assets....................................

1-14

Copyright © 2010 John Wiley & Sons, Inc.

$ 3,000 10,000 $1,500 1,700 700

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

3,900 200 $17,100

(For Instructor Use Only)

PROBLEM 1-4C

(a)

JIMEY MANUFACTURING COMPANY Cost of Goods Manufactured Schedule For the Year Ended December 31, 2011 Work in process inventory, January 1 ....................................... Direct materials Raw materials inventory, January 1............................... Raw materials   purchases ............................. Total raw materials available for use ................ Less: Raw materials inventory, December 31................ Direct materials used............. Direct labor ........................................ Manufacturing overhead Plant manager’s salary ......... Indirect labor ............................ Factory utilities........................ Factory machinery depreciation ......................... Factory insurance................... Factory property taxes.......... Factory repairs......................... Total manufacturing   overhead....................... Total manufacturing costs............ Total cost of work in process ...... Less: Work in process, December 31 ........................ Cost of goods manufactured .......

Copyright © 2010 John Wiley & Sons, Inc.

$

9,500

$ 47,000 62,500 109,500 44,800 $ 64,700 145,100 40,000 18,100 12,900 7,700 7,400 6,900 800 93,800

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

303,600 313,100 7,500 $305,600

(For Instructor Use Only)

1-15

PROBLEM 1-4C (Continued) (b)

JIMEY MANUFACTURING COMPANY (Partial) Income Statement For the Year Ended December 31, 2011 Sales revenues Sales ..................................................................... Less: Sales discounts ................................... Net sales.............................................................. Cost of goods sold Finished goods inventory, January 1 ........................................................ Cost of goods manufactured (see schedule) ........................................................ Cost of goods available for sale.................. Finished goods inventory, December 31.................................................. Cost of goods sold ................................. Gross profit .................................................................

(c)

$465,000 2,500 $462,500 85,000 305,600 390,600 77,800 312,800 $149,700

JIMEY MANUFACTURING COMPANY (Partial) Balance Sheet December 31, 2011 Assets Current assets Cash...................................................................... Accounts receivable........................................ Inventories Finished goods ........................................ Work in process....................................... Raw materials ........................................... Total current assets.......................

1-16

Copyright © 2010 John Wiley & Sons, Inc.

$ 28,000 27,000 $77,800 7,500 44,800

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

130,100 $185,100

(For Instructor Use Only)

PROBLEM 1-5C

(a)

MAYO COMPANY Cost of Goods Manufactured Schedule For the Month Ended August 31, 2011 Work in process, August 1 ..................... Direct materials Raw materials inventory, August 1 .......................................... Raw materials purchases............... Total raw materials available for use ........................... Less: Raw materials inventory, August 31................................ Direct materials used....................... Direct labor .................................................. Manufacturing overhead Factory facility rent .......................... Depreciation on factory   equipment ....................................... Indirect labor ...................................... Factory utilities* ................................ Factory insurance**.......................... Total manufacturing overhead................................. Total manufacturing costs...................... Total cost of work in process ................ Less: Work in process, August 31 ........................................ Cost of goods manufactured .................

$ 20,000 $ 19,500 210,000 229,500 30,000 $199,500 160,000 $ 60,000 35,000 15,000 5,000 3,500 118,500 478,000 498,000 21,000 $477,000

*$10,000 X 50% **$5,000 X 70%

Copyright © 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

1-17

PROBLEM 1-5C (Continued) (b)

MAYO COMPANY Income Statement For the Month Ended August 31, 2011 Sales (net)...................................................................... Cost of goods sold Finished goods inventory, August 1 ........... Cost of goods manufactured.......................... Cost of goods available for sale.................... Less: Finished goods inventory, August 31................................................. Cost of goods sold ................................... Gross profit ................................................................... Operating expenses Advertising expense ......................................... Selling and administrative salaries .............. Depreciation expense—sales equipment ........................................................ Utilities expense*................................................ Insurance expense** ......................................... Total operating expenses ....................... Net loss...........................................................................

$675,000 $ 40,000 477,000 517,000 49,000 468,000 207,000 75,000 70,000 50,000 5,000 1,500 201,500 $ 5,500

*$10,000 X 50% **$5,000 X 30%

1-18

Copyright © 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)