ACCT-222 Mock Midterm Exam - Solutions
Question 1
ABC Company
Manufacturing Statement
Direct Materials:
Raw materials, beginning
Raw materials, purchases
Raw materials available for use
Raw materials, ending
Raw materials used in production
123,500
662,850
786,350
132,950
653,400
Direct Labor
516,800
Manufacturing Overhead:
Amortization of factory equipment
Factory supervision
Factory utilities
Rent on factory building
Repairs on factory equipment
Factory supplies
Indirect Labor
Total manufacturing overhead
Total manufacturing costs
Work in process, beginning
Work in process, ending
Cost to manufacture finished goods
26,760
92,600
32,000
62,250
24,000
13,250
44,320
295,180
1,465,380
66,260
13,440
1,518,200
Cost of Goods Sold
Finished goods, beginning
Manufacturing costs
Less: Finished goods, ending
Cost of Goods Sold
139680
1,518,200
110900
1,546,980
Question 2
a. Raw Materials
Accounts Payable
Debit
$ 410,000
Credit
$
b. Manufacturing Overhead
Work in Process
Raw Materials
$
$
c. Manufacturing Overhead
Work in Process
Sales Commissions
Administrative Salaries
Salaries/Wages Payable
$
$
$
$
d. Selling Expense
Accounts Payable
$
e. Manufacturing Overhead
Accounts Payable
$
f. Advertising Expense
Accounts Payable
$
g. Manufacturing Overhead
Depreciation Expense
Accumulated Depreciation
$
$
h. Manufacturing Overhead
Insurance Expense
Prepaid Insurance
$
$
i. Work in Process
Manufacturing Overhead
$
j. Finished Goods
Work in Process
$
k. Accounts Receivable
Sales
Cost of Goods Sold
Finished Goods
$ 1,500,000
410,000
20,000
360,000
actual hours
$
110,000
75,000
90,000
200,000
$
475,000
$
17,000
$
43,000
$
180,000
$
350,000
$
10,000
$
480,000
$
900,000
17,000
43,000
180,000
280,000
70,000
7,000
3,000
480,000
900,000
870,000
$
450,000
75,000
6.00
80,000
480,000
380,000
$ 1,500,000
$
Predetermined
Overhead Rate
870,000
$
$
$
$
$
Manufacturing Overhead
20,000
480,000
110,000
43,000
(estimate)
280,000
7,000
20,000
Overapplied
Question 3:
Step1:
Units to be accounted for:
WIP, beg
add: Started into production
Total units to be acctd for
Qty. Sched
30,000
420,000
450,000
Step 2:
Units completed and transferred
Normal Spoilage (12%)
Abnormal Spoilage (4%)
WIP, end
Total Units/Equiv. units
Total
370,000
44,400
14,800
20,800
450,000
50%
Material
370,000
44,400
14,800
10,400
439,600
Step 3:
WIP, beginning
add: costs added
Total
150,000
1,846,000
1,996,000
Material
92,000
851,000
943,000
Step 4:
Equivalent Units
Labor
21,000
330,000
351,000
Overhead
37,000
665,000
702,000
Cost per unit
Material
Labor
Overhead
$ 4.5691651 $ 2.1451319 $ 0.8080110 $ 1.6160221
Step 5:
Cost Reconciliation
Transferred to next department:
Normal spoilage
Total Costs transferred
Abnormal spoilage
WIP, Ending:
Material
Labor
Overhead
Equivalent Units
25%
25%
Labor
Overhead
370,000
370,000
44,400
44,400
14,800
14,800
5,200
5,200
434,400
434,400
Total Cost
1,690,591
202,871
1,893,462
67,624
22,309
4,202
8,403
Material
370,000
Labor
370,000
Overhead
370,000
10,400
5,200
5,200
34,914
1,996,000