Chapter 16: Q16-5SE-a (page 886)
Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:
a. Salaries of scientists studying ways to speed forest growth.
The salaries of scientists will come under the period cost.
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Identify the following characteristics as primarily related to financial accounting (FA) or managerial accounting (MA):
5. Summary reports prepared quarterly or annually.
Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:
h. Cost to purchase wood pulp.
Identify the following characteristics as primarily related to financial accounting (FA) or managerial accounting (MA): 1. Helps creditors make lending decisions
Question:Preparing a schedule of cost of goods manufactured and an income statement for a manufacturing company
Gourmet Bones manufactures its own brand of pet chew bones. At the end of December 2018, the accounting records showed the following:
Balances: Beginning Ending
Direct Materials \( 13,500 \) 7,500
Work-in-Process Inventory 0 3,500
Finished Goods Inventory 0 5,200
Other information:
Direct materials purchases$ 36,000
Plant janitorial services 700
Sales salaries 6,000
Delivery costs1,300
Net sales revenue 107,000
Utilities for plant 1,300
Rent on plant 17,000
Customer service hotline costs 1,200
Direct labor23,000
Requirements
1. Prepare a schedule of cost of goods manufactured for Gourmet Bones for the year ended December 31, 2018.
2. Prepare an income statement for Gourmet Bones for the year ended December 31, 2018.
3. How does the format of the income statement for Gourmet Bones differ from the income statement of a merchandiser?
4. Gourmet Bones manufactured 17,900 units of its product in 2018. Compute the company’s unit product cost for the year, rounded to the nearest cent.
Preparing a schedule of cost of goods manufactured and an income statement for a manufacturing company
Certain item descriptions and amounts are missing from the monthly schedule of cost of goods manufactured and income statement of Charlie Manufacturing Company. Fill in the blanks with the missing words, and replace the Xs with the correct amounts.
ing Direct Ending Direct Direct Manufacturing Overhead Total Costs Total Costs Ending Direct Materials Beginning Direct Materials Purchases of Direct Materials \( 26,000 \) X \( X X X (29,000) 177,000 50,000 \) X 51,000 81,000 (26,000) C
Net Sales Revenue Cost of Goods Sold Total Income Cost of Goods Sold: Gross Profit Expenses: Selling Expenses Administrative Expenses Cost of Goods Ending Beginning \( X 232,000 268,000 X 150,000 90,000 \) 118,000 X X X $ X CHARLIE MANUFACTURING COMPANY June 30
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