Chapter 14: Q14E (page 661)
Refer to the information in Exercise 14-13 to prepare an income statement for Delray Mfg. (a manufacturer). Assume that its cost of goods manufactured is $534,390.
The operating income is computed as $496,860
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Selected costs related to Apple’s iPad are listed below. Classify each cost as either direct materials (DM), direct labor (DL), factory overhead (FO), selling expenses (S), or general and administrative (GA) expenses.
1. Display screen | 5. Glue to hold iPad cases together |
2. Assembly line supervisor salary | 6. Uniform provided for each factory worker |
3. Wages for assembly workers | 7. Wages for retail store workers |
4. Salary for chief executive officer | 8. Depreciation (straight-line) on robotic equipment used in assembly |
In its recent annual report and related Corporate Responsibility Report, Hyatt provides information on company performance on several dimensions. Indicate whether the following items below best fit into the financial (label your answer “Profit”), social (label your answer “People”), or environmental (label your answer “Planet”) aspects of triple bottom line reporting.
1.Sales revenue totaled \(4.4 billion.
2. Increased women in management positions by 8%.
3. Reduced water consumption at its hotels.
4. Invested in career programs in Brazil.
5. Operating cash flows totaled \)473 million.
6. Earned awards for best LGBT workplace.
7. 84% of hotels recycle at least one waste stream.
8. Invested in reading programs for young students.
9. Focused on maximizing long-term shareholder value.
List several examples of factory overhead.
Question: Current assets for two different companies at fiscal year-end 2017 are listed here. One is a manufacturer, Rayzer Skis Mfg., and the other, Sunrise Foods, is a grocery distribution company.
1. Identify which set of numbers relates to the manufacturer and which to the merchandiser.
2. Prepare the current asset section for each company from this information. Discuss why the current asset section for these two companies is different.
Account | Company 1 | Company 2 |
Cash | \(7,000 | \)5,000 |
Raw material inventory | 42,000 | |
Merchandise inventory | 45,000 | - |
Work-in-process inventory | - | 30,000 |
Finished goods inventory | - | 50,000 |
Accounts receivable net | 62,000 | 75,000 |
Prepaid expenses | 1,500 | 900 |
Compute ending work in process inventory for a manufacturer with the following information.
Raw materials purchased . . . . . . . . . . . . . . . \(124,800
Direct materials used . . . . . . . . . . . . . . . . . . 74,300
Direct labor used . . . . . . . . . . . . . . . . . . . . . . 55,000
Total factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . \) 95,700
Work in process inventory, beginning of year . . . . . . . 26,500
Cost of goods manufactured . . . . . . . . . . . . . . . . . . . . . 221,800
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