Essential of accounting assignment

Essential of accounting assignment

E5-16

Data

Inventories Beginning Ending

Raw material $9000 $13100

Work in Progress $5000 $7000

Finished goods $9000 $6000

Total cost incurred

Raw material purchased $54000

Direct labor purchased $57000

Manufacturing overhead $19900

Indirect labor $ 5500

Factory insurance $ 4000

machinery depreciation $ 4000

Machinery repairs $1800

Factory utilities $3100

Miscellaneous factory cost $1500

Solution

Cost of goods manufactured schedule of Chamberlin manufacturing

For the year 2008

Direct Material used

Beginning raw material purchased

9000

Add: Cost of raw material purchased

54000

Total raw material available

63000

Less: Ending raw material inventory

13100

Total raw material used

49900

Direct Labor

57000

Manufacturing overhead

Indirect labor

5500

Factory insurance

4000

Machinery depreciation

4000

Machinery repairs

1800

Factory utilities

3100

Miscellaneous factory cost

1500

Total Manufacturing overhead

19900

Total manufacturing cost

126800

Add: Beginning work in process inventory

5000

131800

less: Ending work-in-process inventory

7000

Cost of good manufactured

124800

P5-1A

Solution

 

 

Production cost

 

 

Cost Item

 

Direct Material

 

Direct Labor

 

Manufacturing overhead

Rent on Factory equipment

 

 

 

 

 

7000

Insurance on factory building

 

 

 

 

 

1500

Raw Material

 

75000

 

 

 

 

Utility cost for factory

 

 

 

 

 

900

Supplies for general office

 

 

 

 

 

 

Wages for assembly line worker

 

 

 

43000

 

 

Depreciation on office equipment

 

 

 

 

 

 

Miscellaneous materials

 

 

 

 

 

1100

Factory manager's salary

 

 

 

 

 

5700

Property tax on factory building

 

 

 

 

 

400

Advertising for helmets

 

 

 

 

 

 

Sales commissions

 

 

 

 

 

 

Depreciation on factory building

 

 

 

 

 

1500

 

 

75000

 

43000

 

18100

Solution B

Total production cost

Direct Material$75000

Direct labor 43000

Manufacturing overhead 18100

Total production cost $136100

Production cost per helmet = Total production cost/No of units

= $136100/10000

= $13.61

E6-4

Solution

Fixed

variable

Mixed

Straight line depreciation on factory building

Wood used in the production of furniture

Utilities

sales staff salaries

Fuel used in delivery trucks

telephone bill

Property taxes

screw used in the production of furniture

Insurance on building

sales commission

salaries of factory supervisors

Hourly wages if furniture craftsmen

P6-2A

Solution A

UTECH Company

CVP income statement

For the year ending December 31, 2008

Net sales

1800000

Variable expenses

Cost of Goods Sold

1098000

Selling expenses - Variable

70000

Administrative expenses - Variable

20000

Total variable expenses

1188000

Contribution margin

612000

Fixed expenses

Manufacturing overhead - Fixed

283000

Selling expenses - Fixed

65000

Administrative expenses - Fixed

60000

Total fixed expenses

408000

Net income

204000

Calculation of cost of goods sold

Direct Material $430000

Direct labor $352000

Manufacturing overhead $316000

Cost of Goods sold $1098000

Solution B

Breakeven point in units = fixed expense/contribution margin per unit

Contribution margin = Net sales - variable expense

$1,800,000 - 1,188,000

Contribution margin = $612000

Contribution margin per unit = contribution margin/ (Net sales/selling price)

612000/ (1800000/0.50)

Contribution Margin = $0.17

Breakeven points in units = $408,000/0.17

= 2,400,000 units

Breakeven point in sales = breakeven point in units/selling ...