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Accounting For Manufacturing Concern UST-AMV College of Accountancy Financial Accounting and Reporting

The document discusses accounting concepts related to manufacturing including: 1) Raw material, work in process, manufacturing overhead, and finished goods accounts for Sherwood Groves Corporation. 2) Components of manufacturing costs including direct labor, materials, overhead, and conversion cost for Myerson Inc. 3) Journal entries for raw material purchases, production costs, payroll, and cost of goods sold for Graves Corporation. 4) Schedule of cost of goods manufactured and income statement for Chandler Company and Evans Company. 5) Computation of prime costs and conversion costs from inventory and cost data for Seabrook Company. 6) Cost of goods manufactured statement from inventory balances and various cost data for an unnamed company.

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Juan Dela Cruz
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150 views3 pages

Accounting For Manufacturing Concern UST-AMV College of Accountancy Financial Accounting and Reporting

The document discusses accounting concepts related to manufacturing including: 1) Raw material, work in process, manufacturing overhead, and finished goods accounts for Sherwood Groves Corporation. 2) Components of manufacturing costs including direct labor, materials, overhead, and conversion cost for Myerson Inc. 3) Journal entries for raw material purchases, production costs, payroll, and cost of goods sold for Graves Corporation. 4) Schedule of cost of goods manufactured and income statement for Chandler Company and Evans Company. 5) Computation of prime costs and conversion costs from inventory and cost data for Seabrook Company. 6) Cost of goods manufactured statement from inventory balances and various cost data for an unnamed company.

Uploaded by

Juan Dela Cruz
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Accounting for Manufacturing Concern

UST-AMV College of Accountancy


Financial Accounting and Reporting

A. The Sherwood Groves Corporation had the following account balances:

Raw Material Manufacturing Overhead


Bal. 1/1 30,000 ?
420,000

Bal. 12/31 60,000


400,000
Balance
12/31

Work in Process Factory Wages Payable


Bal. 1/1 70,000 810,000 179,000 Bal.1/1 10,000
Direct material 320,000 175,000
Direct labor 110,000
Overhead 400,000 Bal. 6,000
12/31
Bal. 12/31 ?

Finished Goods Cost of Goods Sold


Bal. 1/1 40,000 ? ?
?

Bal. 12/31 130,000

Required:
a. What was the cost of raw material put into production during the year?
b. How much of the material from question 1 consisted of indirect material?
c. How much of the factory labor cost for the year consisted of indirect labor?
d. What was the cost of goods manufactured for the year?
e. What was the cost of goods sold for the year (before considering under- or overapplied
overhead)?
f. How much Manufacturing Overhead was closed to the WIP account?
g. What type of costing was used in this problem? (normal or actual)

B. The following information is for the Cameron Manufacturing Company for November.

Inventories Beginning Ending


Raw Material $17,400 $13,200
Work in Process 31,150 28,975
Finished Goods 19,200 25,500

Direct Labor (21,000 DLH @ $13)


Raw Material Purchases $120,000 Insurance-Office 2,570
Indirect Labor 11,200 Office Supplies Expense 900
Factory Supplies Used 350 Insurance-Factory 1,770
Other Expenses: Depr. Office Equipment 3,500
Depr.-Factory Equipment 17,300 Repair/Maintenance-Factory 7,400

Calculate total manufacturing costs, cost of goods manufactured, and cost of goods sold.
C.
Components of Manufacturing Cost. Myerson Inc. produces video cameras. The direct labor cost of one
camera is $200, and the total manufacturing cost is $650. The overhead cost of one camera is two-thirds
as large as its conversion cost.equired:

(1) Compute the conversion cost per unit.

(2) Determine the factory overhead cost per unit.

(3) Determine the direct materials cost per unit.

D.
Given the following information for Graves Corporation, prepare the necessary journal entries, assuming that the
Raw Material Inventory account contains both direct and indirect material.

a. Purchased raw material on account $28,500.


b. Put material into production: $15,000 of direct material and $3,000 of indirect material.
c. Accrued payroll of $90,000, of which 70 percent was direct and the remainder was indirect.
d. Incurred and paid other overhead items of $36,000.
e. Transferred items costing $86,500 to finished goods.
f. Sold goods costing $71,300 on account for $124,700.

E.

Prepare a Schedule of Cost of Goods Manufactured (in good form) for the Chandler Company from the
following information for June 20X8:

Inventories Beginning Ending


Raw Material $ 6,700 $ 8,900
Work in Process 17,700 22,650
Finished Goods 29,730 19,990

Additional information: purchases of raw material were $46,700; 19,700 direct labor hours were worked
at $11.30 per hour; overhead costs were $33,300.

F.
In June 20X8, the Evans Company has Cost of Goods Manufactured of $296,000; beginning Finished Goods
Inventory of $29,730; and ending Finished Goods Inventory of $19,990. Prepare an income statement in
good form. (Ignore taxes.) The following additional information is available:

Selling Expenses $ 40,500


Administrative Expenses 19,700
Sales 475,600

G.

From the following information for the Seabrook Company, compute prime costs and conversion costs.

Inventories Beginning Ending


Raw Material $ 9,900 $ 7,600
Work in Process 44,500 37,800
Finished Goods 36,580 61,300

Raw material purchased during the period cost $40,800; overhead incurred and paid or accrued for the
period was $21,750; and 23,600 direct labor hours were incurred at a rate of $13.75 per hour.

H.

The following miscellaneous data has been collected for a manufacturing company for the most recent year-end:

Inventories: Beginning Ending


Raw material $50,000 $55,000
Work in process 40,000 45,000
Finished goods 60,000 50,000
Costs recorded during the year:
Purchases of raw material $195,000
Direct labor 150,000
Cost of goods sold 595,000

Required: Prepare a cost of goods manufactured statement showing how all unknown amounts were
determined.

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