AFM481 Chapter Notes -Subledger, Income Statement, Financial Statement

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orangecoyote929

6 Nov 2013

School

University of Waterloo

Department

Accounting & Financial Management

Course

AFM481

Professor

Grant Russell

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Document Summary

Product costs costs related to making/purchasing a product; aka manufacturing or inventoriable costs. Period costs operating costs; not related to making or purchasing a product; (ex admin costs s&a expenses) Three components: direct materials, direct labour, mfg overhead (all indirect expenses utilities, amortization, plant insurance, etc) Debit (raw materials) purchases of raw materials and costs of operation. Credit (raw materials) dm used (this is then split to direct/indirect) Debit (wip inventory) direct dm used + direct dl + mfg overhead* *mfg overhead is assigned to the product based on a rate. Includes dm and dl and costs related to the mfg facility. Excludes cost of operating activities not directly related s&a. Allocate both direct and overhead costs to continous-flowp rocessing lines (used for mass produced products) Direct and indrect costs are traced and allocated to production departments, then to units. Dm an ddl traced to individual jobs, production overhead allocated.

Related Questions

The following data (in thousands of dollars) have been takenfrom the accounting records of Karmana Corporation for thejust-completed year.

Sales...............................................................................................$1,500

Raw materials inventory, beginning...............................................$20

Raw materials inventory, ending..........................,.........................$40

Purchases of raw materials.............................................................$150

Direct labor.......................................................................................$180

Manufacturing overhead...............................................................$250

Administrative expenses...............................................................$100

Selling expenses.............................................................................$140

Work-in-process inventory, beginning........................................$80

Work-in-process inventory, ending.............................................$50

Finished goods inventory, beginning........................................$125

Finished goods inventory, ending...............................................$60

Use these data to prepare (in thousands of dollars) a scheduleof Cost of Goods Manufactured and a Schedule of Cost of Goods Soldfor the year. In addition, elaborate on the relationship betweenthese schedules as they relate to the flow of product costs in amanufacturing company.

coppergnat724

Using the below financial statements, determine certainnumber of variable costs and a fixed costs for the month of Dec.2016 and calculate the following:

Breakeven point in units

Breakeven point in $S

Assume a target income and determine how many units you need tosell in order to make your target income.

LINDSEYâS LIP SETS

Schedule of Cost of Goods Manufactured

For the Year Ending December 31, 2016

Direct Materials:
	Beginning Raw Materials Inventory, Jan. 1	$100,000
	Plus: Net purchases of raw material	$200,000
	Raw materials available	$300,000
	Less: Ending raw materials inventory, Dec. 31	$150,000
	Raw materials transferred to production		$150,000
	Direct Labor		$200,000
Manufacturing Overhead
	Indirect materials	$10,000
	Indirectlabor	$45,000
	FactoryDepreciation	$10,000	$65,000
Total manufacturing costs			$415,000
Beginning work in process inventory Jan.1			$50,000
Cost of goods manufactured			$530,000
Less: Ending work in process inventory, Dec. 31			$2,000
Cost of goods manufactured			$528,000

LINDSEYâS LIP SETS

Schedule of Cost of Goods Sold

For the Year Ending December 31 2016

Beginning finished goods inventory, Jan. 1	$20,000
Plus: Cost of goods manufactured	$528,000
Goods available forsale	$548,000
Less: Finished goods inventory, Dec. 31	$10,000
Cost of goodssold	$538,000

LINDSEYâS LIP SETS

Income Statement

For the Year Ending December 31 2016

Sales			$3,200,000
Cost of goods sold			$538,000
Gross profit			$2,662,000
Operating expenses
	Online shop selling	$24,000
	General administrative	$10,000	$34,000
Net income			$2,628,000

magentadog836

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

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AFM481 Chapter Notes -Subledger, Income Statement, Financial Statement

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