ADMS 2510 Lecture Notes - Opportunity Cost, Variable Cost, Fixed Cost

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pearimpala756

30 May 2012

School

York University

Department

Administrative Studies

Course

ADMS 2510

Professor

John Parkinson

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ADMS 2510 Full Course Notes

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Direct materials: materials that are directly related to the final product. Direct labour: use of labourers in putting the materials together to form the final product. Manufacturing overhead: other expenses that are incurred to create the final product. Non- manufacturing overhead: selling and administrative costs: product cost: assets. Note that products that are used up are moved into the income statement as expense or remain as assets in the balance sheet: merchandiser: merchandize inventory ( incl. purchases) Manufacturer: inventory : includes raw materials, w. i. p. , and final product ( incl. Opening balance + addition = deduction + closing balance. Manufacturing cost: d. materials + d. labour + mfg. Note that raw materials, work in process and final products are interrelated where one closing balance becomes the opening balance for the other. Variable cost: cost goes up in direct proportion to the number of units produced. Fixed cost: cost doesn t change in relation to the number of units produced.

Related Questions

The Zoe Corporation has thefollowing information for the month of March. Prepare a schedule ofcost of goods manufactured.

Purchases	$92,000
Materials inventory, March 1	6,000
Materials inventory, March 31	8,000
Direct labor	25,000
Factory overhead	37,000
Work in process, March 1	22,000
Work in process, March 31	18,500
Finished goods inventory, March 1	21,000
Finished goods inventory, March 31	25,000
Sales	257,000
Sales and administrative expenses	79,000

ANS:

Zoe Corporation
Statement of Cost of Goods Manufactured Answer all in bold

Work in process inventory March 1
Direct Materials:
Materials inventory, March 1
Purchases
Cost of materials for use
Less materials inventory, March 31
Cost of materials placed inproduction
Direct Labor
Factory overhead
Total manufacturing costs added
Total manufacturing costs
Less work in process inventory, March 31
Cost of goods manufactured

coralgoldfish925

The following accounting events affected Nelson ManufacturingCompany during its first three years of operation. Assume that alltransactions are cash transactions.

Transactions for 2013

1.	Startedmanufacturing company by issuing common stock for $3,700.
2.	Purchased $1,290of direct raw materials.
3.	Used $770 ofdirect raw materials to produce inventory.
4.	Paid $400 ofdirect labor wages to employees to make inventory.
5.	Applied $340 ofmanufacturing overhead cost to Work in Process Inventory.
6.	Finished work oninventory that cost $940.
7.	Sold goods thatcost $670 for $1,150.
8.	Paid $380 forselling and administrative expenses.
9.	Actualmanufacturing overhead cost amounted to $220 for the year.

Transactions for 2014

1.	Acquiredadditional $1,100 of cash from common stock.
2.	Purchased $1,220of direct raw materials.
3.	Used $1,200 ofdirect raw materials to produce inventory.
4.	Paid $550 ofdirect labor wages to employees to make inventory.
5.	Applied $300 ofmanufacturing overhead cost to Work in Process Inventory.
6.	Finished work oninventory that cost $1,860.
7.	Sold goods thatcost $1,540 for $2,890.
8.	Paid $440 forselling and administrative expenses.
9.	Actualmanufacturing overhead cost amounted to $340 for the year.

Transactions for 2015

1.	Paid a cashdividend of $800.
2.	Purchased $1,430of direct raw materials.
3.	Used $1,150 ofdirect raw materials to produce inventory.
4.	Paid $370 ofdirect labor wages to employees to make inventory.
5.	Applied $310 ofmanufacturing overhead cost to work in process.
6.	Finished work oninventory that cost $2,040.
7.	Sold goods thatcost $2,290 for $3,580.
8.	Paid $690 forselling and administrative expenses.
9.	Annualmanufacturing overhead costs were $230 for the year.

a. prepare an income statement, and a balance sheet as of theclose of business on December 31, 2013, 2014 and 2015. (table mustbe fixed and adjusted for correctness)

NELSONMANUFACTURING COMPANY
FinancialStatements
	2013	2014	2015
Income Statements
Salesrevenue
Costof goods sold
Grossmargin	0	0	0
Selling and administrative expense
Netincome	$0	$0	$0

Balance Sheets
Assets
Cash
Raw materials inventory



Total Assets	$0	$0	$0
Equity
Common stock
Retained earnings

Total Equity	$0	$0	$0

blushprairie-dog167

EXERCISE 3-11 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-6] The following data from the just completed year are taken from the accounting records of Mason Company: Sales .................. Direct labor cost .......... Raw material purchases ....... Selling expenses ............ Administrative expenses ......... Manufacturing overhead applied to work in process ... Actual manufacturing overhead costs $524,000 $70,000 $118,000 $140,000 $63,000 $90,000 $80,000 ............ Beginning of Year Inventories End of Year Raw materials ... Work in process ...... Finished goods .... $7,000 $10,000 $20,000 $15,000 $5,000 $35,000 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in produc- tion were direct materials. 2. Prepare a schedule of cost of goods sold. 3. Prepare an income statement.

ADMS 2510 Lecture Notes - Opportunity Cost, Variable Cost, Fixed Cost

ADMS 2510 Full Course Notes

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