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ACC560 E1-5 E1-8 E1-12

Price: $4.50

E1-5 Ikerd Company is a manufacturer of personal computers. Various costs and expenses
associated with its operations are as follows.
1. Property taxes on the factory building.
2. Production superintendents’ salaries.
3. Memory boards and chips used in assembling computers.
4. Depreciation on the factory equipment.
5. Salaries for assembly-line quality control inspectors.
6. Sales commissions paid to sell personal computers.
7. Electrical components used in assembling computers.
8. Wages of workers assembling personal computers.
9. Soldering materials used on factory assembly lines.
10. Salaries for the night security guards for the factory building.
The company intends to classify these costs and expenses into the following categories:
(a) direct materials, (b) direct labor, (c) manufacturing overhead, and (d) period costs.

List the items (1) through (10). For each item, indicate the cost category to which it belongs.

E1-8 Lopez Corporation incurred the following costs while manufacturing its product.

Materials used in product  120,000  Advertising expense   45,000
Depreciation on plant  60,000  Property taxes on plant   14,000
Property taxes on store  7,500  Delivery expense   21,000
Labor costs of assembly-line workers  110,000  Sales commissions   35,000
Factory supplies used  23,000  Salaries paid to sales clerks   50,000

Work in process inventory was $12,000 at January 1 and $15,500 at December 31. Finished
goods inventory was $60,000 at January 1 and $45,600 at December 31.

(a) Compute cost of goods manufactured.
(b) Compute cost of goods sold.

E1-12 Cepeda Corporation has the following cost records for June 2014.

Indirect factory labor  $4,500 Factory utilities  $400
Direct materials used  20,000 Depreciation, factory equipment  1,400
Work in process, 6/1/14  3,000 Direct labor  40,000
Work in process, 6/30/14  3,800 Maintenance, factory equipment  1,800
Finished goods, 6/1/14  5,000 Indirect materials  2,200
Finished goods, 6/30/14  7,500 Factory manager's salary  3,000

(a) Prepare a cost of goods manufactured schedule for June 2014.
(b) Prepare an income statement through gross profit for June 2014 assuming sales revenue
is $92,100.

ACC560 E1-5 E1-8 E1-12

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