ACC 110 Lecture Notes - Net Income, Consignee, Profit Margin

106 views26 pages

viridianzebra871

6 Oct 2012

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Income measurement and the objectives of financial reporting. E4-1: employee wages of employees actually making the candy would be a product cost because they can be attached to the production of candy. People indirectly associated with production of candy could be treated as a period cost: the advertising costs can be attached to the produce to evaluate the overall performance of the candy sensation. Sales commissions would be expensed when the revenue they pertained to was recognized. Ingredients are product costs since they can be easily allocated to specific products. e: conceptually these are product costs since they can be allocated to products. Utilities in a plant can be associated with the production of products. E4-3: recognize revenue when the contract is signed. [it"s assumed that the provision for warranty costs is included in this entry. A student could also prepare a separate entry to record the warranty provision (dr. warranty expense, cr.

Related Questions

A partial listing of costs incurred at Falkenberg Corporationduring October appears below:

Direct materials ........................... $195,000

Utilities, factory............................ $9,000

Sales commissions ...................... $75,000

Adminnistrative salaries .............. $113,000

Indirect labor ................................ $30,000

Advertising ................................... $119,000

Depreciation of production equipment...... $28,000

Direct labor ................................... $105,000

Depreciation of administrative equipment... $44,000

Required:

a. What is the total amount of product cost listed above? Showwork.

b. What is the total amount of period cost listed above? Showwork.

pinkmink286

You are the controller reviewing production costs for the year.One amount in the production reports continues to bother you âadvertising expenses. During the year, the company had institutedan expensive advertising campaign to sell some of its slower movingproducts. It is still too early to tell if the advertising campaignwas successful. There had been much internal debate over how toreport advertising cost. You believe that this cost should bereported as an expense of the current period. The Vice President ofFinance feels it should be reported as Prepaid Ad-vertising andreported as a current asset. The President argues that these costsshould be identified as part of manufacturing overhead and reportedas inventory cost until sold. The President noted that the companyis experiencing financial difficulty and expensing this amount inthe current period might jeopardize a planned bond offering. Also,reporting the advertising cost as inventory rather than prepaidadvertising, would result in less attention by the financialcommunity. What would you do?

sapphireguinea-pig649

Sweet Tooth Candy Company budgeted the following costs for anticipated production for August: Advertising expenses $241,440 Manufacturing supplies 13,230 Power and light 39,470 Sales commissions 269,940 Factory insurance 22,980 Production supervisor wages 116,080 Production control wages 30,180 Executive officer salaries 246,080 Materials management wages 33,190 Factory depreciation 18,810 Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.

amberprairie-dog239

ACC 110 Lecture Notes - Net Income, Consignee, Profit Margin

Document Summary

Get access

Related Documents

ACC 110 Chapter Notes - Chapter 4: Accounts Receivable, Profit Margin, Consignee

ACC 110 Chapter Notes - Chapter 4: Accounts Payable, Profit Margin, Current Liability

ACC 110 Chapter Notes - Chapter 7: Inventory Control, Accounts Payable, Cash Flow

Related Questions