ch01pr bAI TAP Managerial Accounting Ke toan quan tri

Problems: Set C
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Problems: Set C

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P1-1C Mina Company specializes in manufacturing motorcycle helmets. The company
has enough orders to keep the factory production at 1,000 motorcycle helmets per month.
Mina’s monthly manufacturing cost and other expense data are as follows.

Classify manufacturing costs
into different categories and
compute the unit cost.

(SO 3, 4)
Maintenance costs on factory building
Factory manager’s salary

Advertising for helmets
Sales commissions
Depreciation on factory building
Rent on factory equipment
Insurance on factory building
Raw materials (plastic, polystyrene, etc.)
Utility costs for factory
Supplies for general office
Wages for assembly line workers
Depreciation on office equipment
Miscellaneous materials (glue, thread, etc.)

$ 1,300
4,000
8,000
5,000
700
6,000
3,000
20,000
800
200
55,000
500
2,000

Instructions
(a) Prepare an answer sheet with the following column headings.

(a) DM

DL
MO
PC

Product Costs
Cost
Item

Direct
Materials

Direct
Labor

Manufacturing
Overhead

$20,000
$55,000
$17,800
$13,700

Period
Costs

Enter each cost item on your answer sheet, placing the dollar amount under the appropriate headings. Total the dollar amounts in each of the columns.
(b) Compute the cost to produce one motorcycle helmet.
P1-2C Par Play Company, a manufacturer of driver golf clubs, started production in
November 2011. For the preceding 5 years Par Play had been a retailer of sports equipment. After a thorough survey of driver golf club markets, Par Play decided to turn its
retail store into a driver golf club factory.

Raw materials cost for a driver will total $24 per driver. Workers on the production
lines are paid on average $13 per hour. A driver usually takes 2 hours to complete. In addition, the rent on the equipment used to produce drivers amounts to $1,500 per month.
Indirect materials cost $3 per driver. A supervisor was hired to oversee production; her
monthly salary is $3,500.
Janitorial costs are $1,400 monthly. Advertising costs for the drivers will be $6,000
per month. The factory building depreciation expense is $9,600 per year. Property taxes
on the factory building will be $7,200 per year.
Instructions
(a) Prepare an answer sheet with the following column headings.

Direct
Materials

Direct
Labor

Manufacturing
Overhead

(SO 3, 4)

(a) DM $60,000
DL $65,000
MO $15,300
PC $ 6,000

Product Costs
Cost
Item

Classify manufacturing costs
into different categories and
compute the unit cost.

Period
Costs

Assuming that Par Play manufactures, on average, 2,500 drivers per month, enter
each cost item on your answer sheet, placing the dollar amount per month under the
appropriate headings. Total the dollar amounts in each of the columns.
(b) Compute the cost to produce one driver.


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chapter 1 Managerial Accounting

Indicate the missing amount
of different cost items, and
prepare a condensed cost
of goods manufactured
schedule, an income
statement, and a partial
balance sheet.

(SO 5, 6, 7)

(c) Current assets $17,100

Prepare a cost of goods

manufactured schedule, a
partial income statement,
and a partial balance sheet.

(SO 5, 6, 7)

P1-3C Incomplete manufacturing costs, expenses, and selling data for two different
cases are as follows.
Case
Direct Materials Used
Direct Labor
Manufacturing Overhead
Total Manufacturing Costs
Beginning Work in Process Inventory
Ending Work in Process Inventory
Sales
Sales Discounts
Cost of Goods Manufactured
Beginning Finished Goods Inventory
Goods Available for Sale
Cost of Goods Sold
Ending Finished Goods Inventory
Gross Profit
Operating Expenses
Net Income

A

B

$ 6,300
3,000
6,000
(a)
1,000
(b)
22,500
1,500
14,600
(c)
18,300
(d)
1,500
(e)
2,700
(f)

$ (g)
4,000
5,000
16,000
(h)
2,000
(i)
1,200
20,000
4,000
(j)
(k)
2,500

6,000
(l)
2,200

Instructions
(a) Indicate the missing amount for each letter.
(b) Prepare a condensed cost of goods manufactured schedule for Case A.
(c) Prepare an income statement and the current assets section of the balance sheet for
Case A. Assume that in Case A the other items in the current assets section are as
follows: Cash $3,000, Receivables (net) $10,000, Raw Materials $700, and Prepaid
Expenses $200.
P1-4C The following data were taken from the records of Jimey Manufacturing Company for the year ended December 31, 2011.
Raw Materials
Inventory 1/1/11
Raw Materials
Inventory 12/31/11
Finished Goods
Inventory 1/1/11
Finished Goods
Inventory 12/31/11
Work in Process
Inventory 1/1/11
Work in Process
Inventory 12/31/11
Direct Labor
Indirect Labor
Accounts Receivable`

$ 47,000
44,800

85,000

Factory Insurance
Factory Machinery
Depreciation
Factory Utilities
Office Utilities Expense
Sales

$

7,400

7,700
12,900
8,600
465,000

77,800
9,500
7,500
145,100
18,100
27,000

Sales Discounts
Plant Manager’s Salary
Factory Property Taxes
Factory Repairs
Raw Materials Purchases

Cash

2,500
40,000
6,900
800
62,500
28,000

(b) Gross profit $149,700
(c) Current assets $185,100

Instructions
(a) Prepare a cost of goods manufactured schedule. (Assume all raw materials used were
direct materials.)
(b) Prepare an income statement through gross profit.
(c) Prepare the current assets section of the balance sheet at December 31.

Prepare a cost of goods
manufactured schedule and
a correct income statement.

P1-5C Mayo Company is a manufacturer of toys. Its controller resigned in August 2011.
An inexperienced assistant accountant has prepared the following income statement for
the month of August 2011.

(a) CGM

(SO 5, 6)

$305,600


Problems: Set C

MAYO COMPANY
Income Statement
For the Month Ended August 31, 2011
Sales (net)
Less: Operating expenses
Raw materials purchases
Direct labor cost
Advertising expense
Selling and administrative salaries
Rent on factory facilities
Depreciation on sales equipment
Depreciation on factory equipment
Indirect labor cost
Utilities expense
Insurance expense
Net loss

$675,000
$210,000
160,000
75,000
70,000
60,000
50,000
35,000

15,000
10,000
5,000

690,000
$ (15,000)

Prior to August 2011 the company had been profitable every month. The company’s
president is concerned about the accuracy of the income statement. As her friend, you
have been asked to review the income statement and make necessary corrections. After
examining other manufacturing cost data, you have acquired additional information as
follows.
1. Inventory balances at the beginning and end of August were:
Raw materials
Work in process
Finished goods

August 1

August 31

$19,500
20,000
40,000

$30,000
21,000
49,000

2. Only 50% of the utilities expense and 70% of the insurance expense apply to factory

operations; the remaining amounts should be charged to selling and administrative
activities.
Instructions
(a) Prepare a cost of goods manufactured schedule for August 2011.
(b) Prepare a correct income statement for August 2011.

(a) CGM $477,000
(b) NI $ (5,500)

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