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ASHFORD ACC206 WEEK 3 E16-18 E16-20 P17-32B

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E16-18 Preparing an income statement and computing the unit cost for a
merchandising company
Snyder Brush Company sells standard hair brushes. The following information summarizes
Snyder's operating activities for 2012:
Selling and administrative expenses …………………………………… $ 49,680
Purchases …………………………………………………………………………….. 78,000
Sales revenue ………………………………………………………………………. 138,000
Merchandise inventory, January 1,2012 …………………………….. 7,500
Merchandise inventory, December 31, 2012 ……………………… 12,360
Requirements:
1. Prepare an income statement for 2012. Compute the ratio of operation expense to total revenue and operating income to total revenue.
2. Snyder sold 6,000 brushes in 2012. Compute the unit cost for one brush

E16-20
Preparing a statement of cost of goods manufactured
Knight, Corp., a lamp manufacturer, provided the following information for the year ended December 31, 2012:
Inventories: Beginning Ending
Materials $ 56,000 $23,000
Work in process 103,000 63,000
Finished goods 41,000 48,000
Other information:
Depreciation: plant building & equipment $16,000 Repairs & maint-plant $8,000
Materials purchases 159,000 Indirect labor $32,000
Insurance on plant 22,000 Direct labor 122,000
Sales salaries expense 46,000 Administrative Exp. 59,000
Requirements:
Prepare a schedule of cost of goods manufactured.
What is the unit product cost if Knight manufactured 2,160 lamps for the year?

P17-32B
Preparing and using a job cost record
True Technology, Co., manufactures CDs and DVDs for computer software and
entertainment companies. True Technology uses job order costing and has a perpetual inventory system.
On November 2, True began production of 5,500 DVDs, Job 423, for Leopard pictures for $1.60 sales price per DVD. True promised to deliver the DVD’s to Leopard by November 5. True incurred the following costs:

Date Labor Time Record No. Description Amount
11/2 655 10 hours @ $18 $ 180
11/3 656 20 hours @ $14 280
Materials
Requisition
Date No. Description Amount
11/2 63 311 bs. polycarbonate plastic @ $12 $ 372
11/2 64 25 lbs. acrylic plastic @ $29 725
11/3 74 3 lbs. refined aluminum @ $48 144
Leopard Pictures provides the movie file for True to burn onto the DVDs at a cost of
$0.45 per DVD. True Technology allocates manufacturing overhead to jobs based on
the relation between estimated overhead of $550,000 and estimated direct labor
costs of $500,000. Job 423 was completed and shipped on November 3.
Requirements:
1. Prepare a job cost record similar to Exhibit 17-6 for Job 423. Calculate the predetermined
overhead rate, then allocate manufacturing overhead to the job.
2. Journalize in summary form the requisition of direct materials (including the
movie files) and the assignment of direct labor and manufacturing overhead to
Job 423.
3. Journalize completion of the job and the sale of the 5,500 DVDs.

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