Cost Accounting

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Question No.1

1. Sales

$2,000,000

Cost of goods sold. Finish goods inventory January 1’st

$ 300,000

Cost of goods manufactured

$ 1,900,000

Cost of goods available for use

$2,200,000

Finished goods inventory, Dec 31 Cost of goods sold

$600,000 $1,600,000

Gross profit 20% on sales

$400,000

Question No.2 1. Direct Materials; Material inventory, Dec 31 19A Purchases Transportation in Material available for use Less material inventory, Dec 31 19B

$176,000 $2,400,000 $32,000 $2,608,000 $196,000

Direct material consumed

$2,412,000

Direct labor

$3,204,000

Factory overhead

$1,885,600

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§ 9 Total manufacturing cost

$7,501,600

Add work in process

$129,800 $7,631,400

Less work in process

$136,800

Cost of goods manufactured

$7,494,600

Add finished goods, Dec 31, 19A

$620,000

Cost of good available for sale

$8,114,600

Less finished goods

$467,400

Cost of goods sold

$7,647,200

Question No.3 (1) Ruthven Company Cost of goods sold statement For year ended Dec, 31 19... Direct material; Material inventory, Jan, 1, 19… Purchase Material available for use Less material inventory, Dec, 31, 19… Material consumed Direct labor F.O.H Total manufacturing cost Add work in process Less work in process Cost of goods manufactured Add finish goods inventory Cost of goods available for sale Less finished goods Cost of goods sold

$8,000 $36,000 $44,000 $8,500 $35,500 $15,000 $10,000 $60,500 $8,000 $68,500 $15,000 $53,500 $7,000 $60,500 $10,200 $50,300

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Question No.3 (2) Ruthven Company Income statement For year ended Dec, 31 19... Sales Less C.G.S Gross profit Less expense; Marketing expense Administrative expense Income from operation Less other expense Income before income taxes

$72,000 $50,300 $21,700 $3,600 $720

$4,320 $17,380 $360 $17,020

Question no. 4(1) Crowley, Inc. Income statement For the month ended September 30, 19… Sales Les cost of goods manufactured and sold Gross profit Less expense; Marketing expense General & administrative expense Income before income taxes

$182,000 $111,000 $ 71,000 $14,100 $22,900 $ 37,000 $ 34,000

Question no. 4(2) Crowley, Inc. Cost of goods manufactured & sold For the month ended September 30, 19… Direct material; Material inventory, September.1 Purchase Material available for use

$7,000 $42,500 $49,500

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§ 9 Less material inventory, September, 30 Material consumed Direct labor F.O.H (150% of direct labor cost) Total manufacturing cost Add work in process

$7,400 $41,900 $30,000 $45,000 $116,900 $9,600 $126,500 $13,000 $113,500 $15,000 $128,500 $17,500 $111,000

Less work in process Cost of goods manufactured Add finished goods inventory, Sept, 1 Cost of goods available for sale Less finished goods inventory, Sept, 31 Cost of goods sold

Question No. 5(1) SHELIKOFF COMPANY Income Statement For the year ended December 31, 19… Sales Cost of goods sold; Materials Inventory, January 1, 19… Purchase Material available for use Less inventory Dec.31 Material consumed Direct Labor F.O.H Total Manufacturing Cost Add work in process inventory, January 1, 19… Less work in process inventory, Dec. 31, 19… Cost of goods manufactured Add finished goods, January 1, 19… Cost of goods available for sale Less finished goods, December 31, 19… Cost of goods sold Gross Profit Expenses;

$314,000 $3,800 $140,000 $143,800 $4,300 $139,500 $67,350 $33,675 $240,525 $4,600 $245,125 $6,200 $238,925 $5,900 $244,825 $9,270 $235,555 $78,445

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§ 9 Marketing expenses Administrative expenses Income before income taxes

$23,115 $17,650

$40,765 $37,680

Question No. 5(2) The percentage of income to sales, before income tax. Income before income tax / Sales x 100 = 37,680/314,000 x 100 = 12%

Question No. 6 METAXEN CORPORATION

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§ 9 Cost of Goods Sold Statement For the year ended December 31, 19… Materials; Materials, January 1, 19… Purchase Freight on material purchased Material available for use Less material inventory, Dec 31. Material consumed Direct Labor F.O.H Total manufacturing coat Add work in process inventory, Jan. 1, 19…

$88,000 $366,000 $6,600

$372,000 $460,600 $64,000 $396,600 $523,600 $572,800 $ 1,493,000 $29,800 $ 1,522,800 $38,800 $ 1,484,000 $44,200 $ 1,528,200 $66,000 $ 1,462,200

Less work in process inventory, Dec 31, 19… Cost of goods sold manufactured Add finished goods, Jan. 1 19… Cost of goods available for sale Less finished goods, Dec. 31 19… Cost of goods sold

Question No. 7 BROCKWAY CORPORATION Cost of Goods Sold Statement Direct material; Material Beginning inventory Purchase Material available for use Less ending inventory Direct material used Direct Labor F.O.H Total manufacturing cost Add work in process beginning inventory Less work in process ending inventory Cost of goods manufactured Add finished goods beginning inventory Cost of goods available for sale Less finished goods ending inventory Cost of good sol

$ 90,000 $198,000 $288,000 $ 95,000 $193,000 $224,000 $167,000 $584,000 $ 70,000 $654,000 $ 80,000 $574,000 $110,000 $684,000 $ 95,000 $589,000

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Question No. 8(1) REINECKE, INC. Cost of Goods Sold Statement For the year ended March 31, 19… Material used Direct Labor Factory overhead; Indirect labor Light & power Depreciation Repair to machinery

$440,000 $290,000 $46,000 $ 4,260 $ 4,700 $ 5,800

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§ 9 Miscellaneous F.O.H Total F.O.H Total manufacturing cost Add work in process, April 1, 19A

$29,000 $ 89,760 $819,760 $ 41,200 $860,960 $ 42,500 $818,460 $ 34,300 $852,760 $ 31,500 $821,260

Less work in process March 31, 19B Cost of goods manufactured Add finished goods, April 1, 19A Cost of goods available for sale Less finish goods, March 31, 19B Cost of goods sold

Question No. 8(2) The units cost of goods manufactured Cost of goods manufactured / units manufactured = 818,460 / 18,000 = 45.47%

Question No. 8(3) Actual F.O.H Less Applied F.O.H (30% of direct labor, 290.000) Under applied factory overhead

$89,760 $87,000 $2,760

Question No. 10 Rate of return on capital employed =Net income / capital employed x 100 = 40,000 / 400,000 x 100 = 10%

Question No. 11 Sales (1,200,000 / 10 x 100) Cost of goods sold Gross profit (40% of 12,000,000) Less expense:

$12,000,000 $ 7,200,000 $ 4,800,000

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§ 9 Marketing expense $1,800,000 General & administrative expense $1,762,500 Income from operation Other expense: Interest expense (2,000,000 x 37.5% x 5%) Income before income taxes

$ 3,562,500 $ 1,237,500 $ 37,500 $ 1,200,000

Question No. 12 YUKON REFIGERATOR COMPANY Income Statement For three month ended March 31, 19…

Sale Cost of goods sold; Materials; Inventory, January 1.19… Purchase Material available for use Less inventory, March 31 19… Material consumed Direct labor Factory overhead Cost of goods manufactured Add finished goods, January 1 19… Cost of goods available for sale Less finished goods, March 31, 19... Cost of goods sold Gross profit Commercial expense; Marketing expense General & administration expense Income before income taxes

$ 6,634000

$268,000 $1,946,700 $2,214,700 $167,000 $2,047,000 $2,125,800 $764,000 $4,937,500 $43,000 $4,980,500 $79,000

$4,901,500 $1,732,500

$516,000 $461,000

$977,000 $755,500

Question No. 12(2) Sales Finished goods, March 31 Available for sale Finished goods Manufactured during period

12,400 units 200 units 12,600 units 100 units 12,5oo units

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§ 9 Cost of goods manufactured / units manufactured = 4,937,500 / 12,500 = 395/unit cost

Question No. 12(4) Gross profit / units sold = 1,732,500 / 12,400 = 139.718 gross profit per unit

Question No. 12(5) Income before income taxes / units sold = 755,500 / 12,400 = 60.927 income per unit

Question No. 12(6) Gross profit / sales x 100 = 1,732,500 / 6,634,000 x 100 = 26.11%

Question No. 12(7) Income before income taxes / sales x 100 = 755,500 / 6,634,000 x 100 = 11.39%

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