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ACC 410 Chapter 5: Chapter 5

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jademallard37
15 Apr 2011
School
Ryerson University
Department
Accounting
Course
ACC 410
Professor
Vanessa Magness

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Document Summary

product costs: costs involved in either making or purchasing a product (manufacturing, inventorable costs, direct or indirect costs) period costs: operating costs that are not part of making or purchasing a product, such as sales and administrative expenses (ex: sales or administrative expenses) manufacturing companies may have leftover inventories in the raw materials account, work in process account, and the finished goods account at the end of the accounting period. managers need to prepare the cost of goods sold schedule and cost of goods manufactured schedule as a part of preparing the income statement. prime costs: direct materials and direct labour. conversion costs: direct labour and manufacturing overhead (these two costs convert materials into finished goods) calculating cost of goods sold for merchandising companies. cogs = beginning merchandise inventory + purchases ending merchandise inventory. calculating cost of goods sold for manufacturing companies.

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Related Questions

The following data from the just completed year are taken from the accounting records of Mason Company:


Sales $ 654,000
Direct labor cost $ 82,000
Raw material purchases $ 133,000
Selling expenses $ 101,000
Administrative expenses $ 47,000
Manufacturing overhead applied to work in process $ 210,000
Actual manufacturing overhead costs $ 225,000

Inventories Beginning
of Year		 End of
Year
Raw materials $ 8,500 $ 10,100
Work in process $ 5,700 $ 20,300
Finished goods $ 74,000 $ 25,700


Required:
1.

Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.

The following data from the just completed yearare taken from the accounting records of Eccles Company:


Sales $ 643,000
Direct labor cost $ 90,000
Raw material purchases $ 132,000
Selling expenses $ 100,000
Administrative expenses $ 43,000
Manufacturing overhead applied to work inprocess $ 210,000
Actual manufacturing overhead costs $ 220,000
Inventories: Beginning
of Year		 End of
Year
Raw materials $ 8,000 $ 10,000
Work in process $ 5,000 $ 20,000
Finished goods $ 70,000 $ 25,000

Required:
1.

Prepare a schedule of cost of goodsmanufactured. Assume all raw materials used in production weredirect materials.

Prepare a schedule for the cost of goods manufactured for

2013.

Begin by preparing the schedule of cost of goods manufactured​ (in thousands). Start with the direct materials and labor​ costs, then indirect manufacturing​ costs, and complete the schedule by calculating cost of goods manufactured.

 Beginning of 2013 End of 2013
Direct materials inventory $27,000 $28,000
Work-in-process inventory 29,000 22,000
Finished goods inventory 16,000 25,000
Purchases of direct materials 73,000
Direct manufacturing labor 24,000
Indirect manufacturing labor 18,000
Plant insurance 6,000
Depreciation—plant, building, and equipment 17,000
Repairs and maintenance—plant 2,000
Marketing, distribution, and customer-service costs 111,000
General and administrative costs

36,000