Chapter 14: Q15DQ (page 655)
Besides inventories, what other assets often appear on manufacturers’ balance sheets but not on merchandisers’ balance sheets?
Manufacturing tools, factory buildings, machinery, and patents.
Over 22 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Question: The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Best Bikes.
Advertising expenses | $20,250 | Miscellaneous production costs | 8,440 |
Depreciation expenses – office equipment | 8,440 | Office salaries expenses | 70,875 |
Depreciation expenses – selling equipment | 10,125 | Raw material purchases | 894,375 |
Depreciation – Factory equipment | 35,400 | Rent expenses – office space | 23,625 |
Factory supervision | 121,500 | Rent expenses – selling space | 27,000 |
Factory supplies used | 6,060 | Rent expenses – Factory building | 93,500 |
Factory Utilities | 37,500 | Maintenance expenses – factory equipment | 30,375 |
Direct labor | 562,500 | Sales | 4,942,625 |
Indirect labor | 59,000 | Sales salaries expenses | 295,300 |
Required
1. Classify each cost as either a product or period cost.
2. Classify each product cost as either direct materials, direct labor, or factory overhead.
3. Classify each period cost as either selling expenses or general and administrative expenses.
Describe the relations among the income statement, the schedule of cost of goods manufactured, and a detailed listing of factory overhead costs.
Question: The following calendar-year information is taken from the December 31, 2017, adjusted trial balance and other records of Dahlia Company
Advertising expense | \( 19,125 | Direct labor | \) 650,750 |
Depreciation expense—Office equipment | 8,750 | Indirect labor | 60,000 |
Depreciation expense—Selling equipment | 10,000 | Miscellaneous production costs | 8,500 |
Depreciation expense—Factory equipment | 32,500 | Office salaries expense | 100,875 |
Factory supervision | 122,500 | Raw materials purchases | 872,500 |
Factory supplies used | 15,750 | Rent expense—Office space | 21,125 |
Factory utilities | 36,250 | Rent expense—Selling space | 25,750 |
Inventories | Rent expense—Factory building | 79,750 | |
Raw materials, December 31, 2016 | 177,500 | Maintenance expense—Factory equipment | 27,875 |
Raw materials, December 31, 2017 | 168,125 | Sales | 3,275,000 |
Work in process, December 31, 2016 | 15,875 | Sales discounts | 57,500 |
Work in process, December 31, 2017 | 14,000 | Sales salaries expense | 286,250 |
Finished goods, December 31, 2016 | 164,375 | ||
Finished goods, December 31, 2017 | 129,000 |
Required
3M Co. reports beginning raw materials inventory of \(902 million and an ending raw materials inventory of \)855 million. If 3M purchased $3,646 million of raw materials during the year, what is the amount of raw materials it used during the year?
Question: SP 14 Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture.
Required
1. Classify the following manufacturing costs of Business Solutions as either (a) variable (V) or fixed (F), and (b) direct (D) or indirect (I).
Manufacturing cost | a. Variable or fixed | b. Direct or indirect |
1. Monthly flat fee to clean workshop | ||
2. Laminating coverings for desktops | ||
3. Taxes on assembly workshops | ||
4. Glue to assemble workstation components parts | ||
5. Wages of desk assembler | ||
6. Electricity for workshop | ||
7. Depreciation on manufacturing tools |
2. Prepare a schedule of cost of goods manufactured for Business Solutions for the month ended January 31, 2018. Assume the following manufacturing costs:
Direct materials: \(2,200
Factory overhead: \)490
Direct labor: \(900
Beginning work in process: none (December 31, 2017)
Ending work in process: \)540 (January 31, 2018)
Beginning finished goods inventory: none (December 31, 2017)
Ending finished goods inventory: $350 (January 31, 2018)
3. Prepare the cost of goods sold section of a partial income statement for Business Solutions for the month ended January 31, 2018.
What do you think about this solution?
We value your feedback to improve our textbook solutions.
