ACC-1A Lecture Notes - Lecture 19: Cost Driver, Management Accounting, Income Statement

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lemonwater-buffalo623

11 Sep 2020

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Cost of goods manufactured represents the total cost of goods completed during the period. Prior to completion of good, manufacturing costs are debited into work-in-progress inventory separately: When a good is completed, cogm is debited into finished goods inventory, credited from wip. Thus, cogm = opening wip + total manufacturing costs closing wip (what goes into fg inv. Recall total manufacturing costs = dm + dl + oh. Direct materials used = beginning raw materials + purchases of raw materials closing raw materials. Recall total manufacturing costs = direct materials used + direct labour + manufacturing overhead. So, a statement of cost of goods manufactured has the following structure: Direct materials: beginning + purchases = (materials available) ending = direct materials used. Add beginning wip = (total manufacturing costs) Previously for a retailer, cogs = beginning inventory + purchases ending inventory. However, for a manufacturer: (the structure of a cogs statement)

Related Questions

1.) When products held in inventory are sold:

A.)Cost of Goods Sold is credited.

B.)Work in Process Inventory is credited.

C.)Finished Goods Inventory is credited.

D.)Finished Goods Inventory is debited.

2.)Since manufacturing costs (direct materials, direct labor,and overhead) are incurred in the process of manufacturing units ofproduct, these costs are credited t

A.)	The Direct Materials Inventory, Direct Labor, and ManufacturingOverhead accounts respectively.
B.)	Liability accounts.
C.)	The Work in Process Inventory account.
D.)	The Cost of Goods Sold account.

3.)Management accounting systems are designed to assistorganizations in the performance of all of the following functionsexcept:

A.)	The assignment of decision-making authority over companyassets.
B.)	Planning and decision-making.
C.)	Monitoring, evaluating, and rewarding performance.
D.)	The preparation of income tax returns.

4.)In a schedule of cost of finished goods manufactured, thefigure for total manufacturing costs:

	A.) May be less than the cost of direct materials used.
	B.) May be less than the direct labor costs assigned toproduction.
	C.) May be less than the manufacturing overhead applied toproduction.
	D.) May be less than the cost of finished goodsmanufactured.

5.) When a manufacturing company purchases raw materials orcomponent parts to be used in manufacturing finished goods, thesecosts are initially debited to:

	A.) Expense accounts.
	B.) Raw Materials Inventory.
	C.) Finished Goods Inventory.
	D.) Manufacturing Overhead.

6.) The wages paid to employees working directly on a company'sproducts would be shown as a:

	A.) Credit to Direct Labor.
	B.) Debit to Direct Labor.
	C.) Credit to Work in Process.
	D.) Debit to Manufacturing Overhead.

7.) Amounts credited to the Work in Process inventory accountmay best be described as:

	A.) The cost of finished goods manufactured.
	B.) Total manufacturing costs charged to production.
	C.) The cost of goods sold.
	D.) Direct materials purchased, direct labor costs paid, andpayments for items classified as manufacturing overhead.

chocolatetiger413

Joseph Co. pulled the following information from its record forfiscal year 2015. Manufacturing overhead is allocated at a rate of120% of Direct Labor cost. (Do not worry about closingManufacturing overhead.) All information given and asked of you isprior to closing Manufacturing overhead.

Raw Materials Purchases (includes DM and IM)	$82,000
Direct Materials used	$94,000
Indirect Material Used	$5,000
Cost of Goods Manufactured	$204,000
Manufacturing allocated to jobs	$96,000
Cost of Goods Sold	$149,000
Indirect Labor Used	$35,000
Under-allocation of Manufacturing Overhead	$8,000

Additionally, the following general ledger balances weregiven:

Raw Materials Inventory as of 1/1/2015	$30,000
Work in Process as of 1/1/2015	$10,000
Finished Goods Inventory as of 12/31/2015	$60,000

Compute the following:

D. What is the 1/1/2015 Cost of Goods Sold? ____________

E. Other manufacturing overhead costs incurred during the yearbesides those listed above? ___________

blushbeaver545

Zachary Modems, Inc. acquired a subsidiary named Anywhere, Inc. (AI). AI manufactures a wireless modem that enables users to access the Internet through cell phones. The following trial balance was drawn from the accounts of the subsidiary:


Cash	$	184,600
Raw materials inventory		3,680
Work in process inventory		5,530
Finished goods inventory		6,450
Common stock			$	119,060
Retained earnings				81,200
Totals	$	200,260	$	200,260

The subsidiary completed the following transactions during 2017:

1. Paid $55,380 cash for direct raw materials.

2. Transferred $46,160 of direct raw materials to work in process.

3. Paid production employees $73,860 cash.

4. Applied $48,910 of manufacturing overhead costs to work in process.

5. Completed work on products that cost $150,410.

6. Sold products that cost $131,950 for $167,950 cash. Record the recognition of revenue in a row labeled 6a and the cost of goods sold in a row labeled 6b.

7. Paid $18,450 cash for selling and administrative expenses.

8. Actual overhead costs paid in cash amounted to $50,710.

9. Closed the Manufacturing Overhead account. The amount of over- or underapplied overhead was insignificant (immaterial).

10. Made a $4,580 cash distribution to the owners

REQUIRED

A. Prepare a schedule of cost of goods manufactured and sold.

ANYWHERE, INC.
Schedule of Cost of Goods Manufactured and Sold
For Year Ended December, 31 2017
Beginning raw materials inventory
Purchases
Raw materials available for use	0
Ending raw materials inventory
Direct raw materials used	0
Direct labor
Manufacturing overhead
Total manufacturing costs	0
Beginning work in process inventory
Total work in process inventory	0
Ending work in process inventory
Cost of goods manufactured	0
Beginning finished goods inventory
Cost of goods available for sale	0
Ending finished goods inventory
Cost of goods sold	$0

coffeegoose683

ACC-1A Lecture Notes - Lecture 19: Cost Driver, Management Accounting, Income Statement

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