BRIEF EXERCISE 1-4
(a)
(b)
(c)
(d)
DM
DL
MO
MO
Frames and tires used in manufacturing bicycles.
Wages paid to production workers.
Insurance on factory equipment and machinery.
Depreciation on factory equipment.
BRIEF EXERCISE 1-5
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Direct materials.
Direct materials.
Direct labor.
Manufacturing overhead.
Manufacturing overhead.
Direct materials.
Direct materials.
Manufacturing overhead.
BRIEF EXERCISE 1-6
(a)
(b)
(c)
(d)
(e)
(f)
Product.
Period.
Period.
Period.
Product.
Product.
BRIEF EXERCISE 1-7
Direct
Materials
(a)
(b)
(c)
(d)
1-8
Product Costs
Direct
Labor
Factory
Overhead
X
X
X
X
Copyright © 2010 John Wiley & Sons, Inc.
Weygandt, Managerial Accounting, 5/e, Solutions Manual
(For Instructor Use Only)
BRIEF EXERCISE 1-8
(a) Direct materials used......................................................................
Direct labor.........................................................................................
Total manufacturing overhead ....................................................
Total manufacturing costs ...................................................
$180,000
229,000
208,000
$617,000
(b) Beginning work in process...........................................................
Total manufacturing costs ............................................................
Total cost of work in process..............................................
$ 25,000
617,000
$642,000
BRIEF EXERCISE 1-9
DIAZ COMPANY
Balance Sheet
December 31, 2011
Current assets
Cash................................................................................
Accounts receivable..................................................
Inventories
Finished goods ..................................................
Work in process.................................................
Raw materials .....................................................
Prepaid expenses.......................................................
Total current assets.................................
$ 62,000
200,000
$71,000
87,000
73,000
231,000
38,000
$531,000
BRIEF EXERCISE 1-10
Direct
Materials Used
(1)
(2)
(3)
Direct
Labor Used
Factory
Overhead
Total
Manufacturing
Costs
$136,000
$81,000
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$144,000
Weygandt, Managerial Accounting, 5/e, Solutions Manual
(For Instructor Use Only)
1-9
BRIEF EXERCISE 1-11
Total
Manufacturing
Costs
(1)
(2)
(3)
Work in
Process
(January 1)
Work in
Process
(December 31)
Cost of Goods
Manufactured
$136,000
$174,000
$123,000
$58,000
*BRIEF EXERCISE 1-12
Account
Finished Goods Inventory
Work in Process Inventory
Raw Materials Purchases
Direct Labor
Work Sheet Column
Income statement (DR)
Cost of goods manufactured (DR)
Cost of goods manufactured (DR)
Cost of goods manufactured (DR)
SOLUTIONS FOR DO IT! REVIEW EXERCISES
DO IT! 1-1
1.
2.
3.
4.
5.
6.
False
False
False
True
True
True
DO IT! 1-2
Period costs:
Advertising
Salaries of sales representatives
1-10
Copyright © 2010 John Wiley & Sons, Inc.
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DO IT! 1-2 (Continued)
Product costs:
Blank CDs (DM)
Depreciation of CD image burner (MO)
Salary of factory manager (MO)
Factory supplies used (MO)
Paper inserts for CD cases (DM)
CD plastic cases (DM)
Salaries of factory maintenance employees (MO)
Salaries of employees who burn music onto CDs (DL)
DO IT! 1-3
ROLEN MANUFACTURING COMPANY
Cost of Goods Manufactured Schedule
For the Month Ended April 30
Work in process, April 1 .......................................
Direct materials........................................................
Raw materials, April 1 ...................................... $ 10,000
Raw materials purchases................................
98,000
Total raw materials available for use .......... 108,000
Less: Raw materials, April 30.......................
14,000
Direct materials used........................................
$ 94,000
Direct labor................................................................
60,000
Manufacturing overhead.......................................
180,000
Total manufacturing costs ...................................
Total cost of work in process .............................
Less: Work in process, April 31........................
Cost of goods manufactured ..............................
$
5,000
334,000
$339,000
3,500
$335,500
DO IT! 1-4
1.
2.
3.
4.
5.
6.
f
a
c
d
e
b
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(For Instructor Use Only)
1-11
SOLUTIONS TO EXERCISES
EXERCISE 1-1
1. False. Financial accounting focuses on providing information to external
users.
2. True.
3. False. Preparation of budgets is part of managerial accounting.
4. False. Managerial accounting applies to service, merchandising and
manufacturing companies.
5. True.
6. False. Managerial accounting reports are prepared as frequently as
needed.
7. True.
8. True.
9. False. Financial accounting reports must comply with Generally Accepted
Accounting Principles.
10. False. Managerial accountants are expected to behave ethically, and there
is a code of ethical standards for managerial accountants.
EXERCISE 1-2
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
(b)
(c)
(c)
(c)
(a)
(b)
(c)
(c)
(c)
(a)
Direct labor.*
Manufacturing overhead.
Manufacturing overhead.
Manufacturing overhead.
Direct materials.
Direct labor.
Manufacturing overhead.
Manufacturing overhead.
Manufacturing overhead.
Direct materials.
*or sometimes (c), depending on the circumstances
1-12
Copyright © 2010 John Wiley & Sons, Inc.
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(For Instructor Use Only)
EXERCISE 1-3
(a) Materials used in product........ DM Advertising expense .................Period
Depreciation on plant............. MOH Property taxes on plant............... MOH
Property taxes on store......Period Delivery expense ........................Period
Labor costs of assembly
Sales commissions....................Period
line workers ................................ DL Salaries paid to sales clerks..... Period
Factory supplies used ........... MOH
(b) Product costs are recorded as a part of the cost of inventory because
they are an integral part of the cost of producing the product. Product costs
are not expensed until the goods are sold. Period costs are recognized
as an expense when incurred.
EXERCISE 1-4
(a) Factory utilities ....................................................................................
Depreciation on factory equipment ..............................................
Indirect factory labor .........................................................................
Indirect materials ................................................................................
Factory manager’s salary.................................................................
Property taxes on factory building ...............................................
Factory repairs.....................................................................................
Manufacturing overhead...................................................................
$ 11,500
12,650
48,900
80,800
8,000
2,500
2,000
$166,350
(b) Direct materials....................................................................................
Direct labor............................................................................................
Manufacturing overhead...................................................................
Product costs .......................................................................................
$137,600
69,100
166,350
$373,050
(c) Depreciation on delivery trucks ....................................................
Sales salaries ......................................................................................
Repairs to office equipment ...........................................................
Advertising ...........................................................................................
Office supplies used .........................................................................
Period costs .........................................................................................
$
Copyright © 2010 John Wiley & Sons, Inc.
Weygandt, Managerial Accounting, 5/e, Solutions Manual
3,800
46,400
1,300
18,000
2,640
$ 72,140
(For Instructor Use Only)
1-13
EXERCISE 1-5
1.
2.
(c)
(c)
3.
4.
(a)
(c)
5.
6.
(b)*
(d)
7.
8.
(a)
(b)
9.
10.
(c)
(c)
*or sometimes (c), depending on the circumstances.
EXERCISE 1-6
1. (b)
2. (c)
3. (a)
4. (c)
5. (c)
6. (c)
7. (c)
8. (c)
9. (c)
10. (c)
EXERCISE 1-7
(a)
(b)
1-14
Delivery service (product) costs:
Indirect materials
Depreciation on delivery equipment
Dispatcher’s salary
Gas and oil for delivery trucks
Drivers’ salaries
Delivery equipment repairs
Total
$ 5,400
11,200
5,000
2,200
11,000
300
$35,100
Period costs:
Property taxes on office building
CEO’s salary
Advertising
Office supplies
Office utilities
Repairs on office equipment
Total
$ 870
12,000
1,600
650
990
180
$16,290
Copyright © 2010 John Wiley & Sons, Inc.
Weygandt, Managerial Accounting, 5/e, Solutions Manual
(For Instructor Use Only)
EXERCISE 1-8
(a) Work-in-process, 1/1.....................................
Direct materials used....................................
Direct labor.......................................................
Manufacturing overhead
Depreciation on plant ...........................
Factory supplies used..........................
Property taxes on plant .......................
Total manufacturing overhead ..................
Total manufacturing costs..........................
Total cost of work-in-process....................
Less: ending work-in-process ...................
Cost of goods manufactured .....................
$ 12,000
$100,000
110,000
$60,000
23,000
14,000
97,000
307,000
319,000
15,500
$303,500
(b) Finished goods, 1/1 .......................................
Cost of goods manufactured ....................
Cost of goods available for sale ...............
Finished goods, 12/31 ..................................
Cost of goods sold ........................................
$ 60,000
303,500
363,500
55,600
$307,900
EXERCISE 1-9
Total raw materials available for use:
Direct materials used..................................................................
Add: Raw materials inventory (12/31).................................
Total raw materials available for use.....................................
$190,000
12,500
$202,500
Raw materials inventory (1/1):
Direct materials used..................................................................
Add: Raw materials inventory (12/31).................................
Less: Raw materials purchases .............................................
Raw materials inventory (1/1)...................................................
$190,000
12,500
(158,000)
$ 44,500
Total cost of work in process:
Cost of goods manufactured ...................................................
Add: Work in process (12/31) ..................................................
Total cost of work in process...................................................
$510,000
81,000
$591,000
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(For Instructor Use Only)
1-15
EXERCISE 1-9 (Continued)
Total manufacturing costs:
Total cost of work in process.......................................................
Less: Work in process (1/1) ..........................................................
Total manufacturing costs ............................................................
$591,000
(210,000)
$381,000
Direct labor:
Total manufacturing costs ............................................................
Less: Total overhead.......................................................................
Direct materials used ..........................................................
Direct labor .........................................................................................
$381,000
(122,000)
(190,000)
$ 69,000
EXERCISE 1-10
A + $57,000 + $46,500 = $185,650
A = $82,150
$242,500 – $11,000 = F
F = $231,500
$185,650 + B = $221,500
B = $35,850
$130,000 + G + $102,000 = $253,700
G = $21,700
$221,500 – C = $185,275
C = $36,225
$253,700 + H = $337,000
H = $83,300
$58,400 + $86,000 + $81,600 = D
D = $226,000
$337,000 – $70,000 = I
I = $267,000
$226,000 + $16,500 = E
E = $242,500
Additional explanation to EXERCISE 1-10 solution:
Case A
(a) Total manufacturing costs .............................................................
Less: Manufacturing overhead .....................................................
Direct labor ..............................................................................
Direct materials used .......................................................................
1-16
Copyright © 2010 John Wiley & Sons, Inc.
Weygandt, Managerial Accounting, 5/e, Solutions Manual
$185,650
(46,500)
(57,000)
$ 82,150
(For Instructor Use Only)
EXERCISE 1-10 (Continued)
(b) Total cost of work in process........................................................
Less: Total manufacturing costs .................................................
Work in process (1/1/11) .................................................................
$221,500
(185,650)
$ 35,850
(c) Total cost of work in process........................................................
Less: Cost of goods manufactured.............................................
Work in process (12/31/11).............................................................
$221,500
(185,275)
$ 36,225
Case B
(d) Direct materials used.......................................................................
Direct labor..........................................................................................
Manufacturing overhead.................................................................
Total manufacturing costs .............................................................
$ 58,400
86,000
81,600
$226,000
(e) Total manufacturing costs .............................................................
Work in process (1/1/11) .................................................................
Total cost of work in process........................................................
$226,000
16,500
$242,500
(f)
$242,500
(11,000)
$231,500
Total cost of work in process........................................................
Less: Work in process (12/31/11).................................................
Cost of goods manufactured ........................................................
Case C
(g) Total manufacturing costs .............................................................
Less: Manufacturing overhead....................................................
Direct materials used..........................................................
Direct labor...........................................................................................
$253,700
(102,000)
(130,000)
$ 21,700
(h) Total cost of work in process........................................................
Less: Total manufacturing costs .................................................
Work in process (1/1/11) .................................................................
$337,000
(253,700)
$ 83,300
(i)
$337,000
(70,000)
$267,000
Total cost of work in process........................................................
Less: Work in process (12/31/11).................................................
Cost of goods manufactured ........................................................
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(For Instructor Use Only)
1-17
EXERCISE 1-11
(a) (a) $127,000 + $140,000 + $77,000 = $344,000
(b) $344,000 + $33,000 – $360,000 = $17,000
(c) $450,000 – ($200,000 + $132,000) = $118,000
(d) $40,000 + $470,000 – $450,000 = $60,000
(e) $245,000 – ($80,000 + $100,000) = $65,000
(f)
$245,000 + $60,000 – $80,000 = $225,000
(g) $288,000 – ($70,000 + $75,000) = $143,000
(h) $288,000 + $45,000 – $270,000 = $63,000
(b)
MABRY COMPANY
Cost of Goods Manufactured Schedule
For the Year Ended December 31, 2011
Work in process, January 1 .....................................
Direct materials ............................................................
Direct labor ....................................................................
Manufacturing overhead ...........................................
Total manufacturing costs...............................
Total cost of work in process..................................
Less: Work in process inventory,
December 31 ....................................................
Cost of goods manufactured...................................
1-18
Copyright © 2010 John Wiley & Sons, Inc.
$ 33,000
$127,000
140,000
77,000
Weygandt, Managerial Accounting, 5/e, Solutions Manual
344,000
377,000
17,000
$360,000
(For Instructor Use Only)
EXERCISE 1-12
(a)
VARGAS CORPORATION
Cost of Goods Manufactured Schedule
For the Month Ended June 30, 2011
Work in process, June 1 ..................................
Direct materials used........................................
Direct labor...........................................................
Manufacturing overhead
Indirect labor...............................................
Factory manager’s salary.......................
Indirect materials.......................................
Maintenance, factory equipment..........
Depreciation, factory equipment..........
Factory utilities ..........................................
Total manufacturing overhead.......
Total manufacturing costs ..............................
Total cost of work in process.........................
Less: Work in process, June 30...................
Cost of goods manufactured .........................
(b)
$ 3,000
$20,000
30,000
$4,500
3,000
2,200
1,800
1,400
400
13,300
63,300
66,300
3,800
$62,500
VARGAS CORPORATION
Income Statement (Partial)
For the Month Ended June 30, 2011
Net sales............................................................................
Cost of goods sold
Finished goods inventory, June 1 ...................
Cost of goods manufactured [from (a)]............
Cost of goods available for sale.......................
Finished goods inventory, June 30.................
Cost of goods sold ......................................
Gross profit ......................................................................
Copyright © 2010 John Wiley & Sons, Inc.
Weygandt, Managerial Accounting, 5/e, Solutions Manual
$87,100
$ 5,000
62,500
67,500
7,500
60,000
$27,100
(For Instructor Use Only)
1-19
EXERCISE 1-13
(a)
WOYAK CONSULTING
Schedule of Cost of Contract Services Provided
For the Month Ended August 31, 2011
Supplies used (direct materials)..........................................
$ 1,200
Salaries of professionals (direct labor) .............................
12,600
Service overhead:
Utilities for contract operations ..................................... $1,400
Contract equipment depreciation..................................
900
Insurance on contract operations .................................
800
Janitorial services for professional offices................
400
Total overhead ..............................................................
3,500
Cost of contract services provided...............................
$17,300
(b) The costs not included in the cost of contract services provided would
all be classified as period costs. As such, they would be reported on
the income statement under administrative expenses.
EXERCISE 1-14
(a) Work-in-process, 1/1 ...................................
Direct materials
Materials inventory, 1/1 ......................
Materials purchased............................
Materials available for use ................
Less: Materials inventory, 12/31 .....
Direct materials used ..................................
Direct labor .....................................................
Manufacturing overhead ............................
Total manufacturing costs ........................
Total cost of work-in-process ..................
Less: Work-in-process, 12/31...................
Cost of goods manufactured....................
(b) Sales .................................................................
Cost of goods sold
Finished goods, 1/1.............................
Cost of goods manufactured ..........
Cost of goods available for sale .....
Finished goods, 12/31 ........................
Cost of goods sold.......................
Gross profit ....................................................
1-20
Copyright © 2010 John Wiley & Sons, Inc.
$ 13,500
$ 21,000
150,000
171,000
30,000
$141,000
200,000
180,000
521,000
534,500
17,200
$517,300
$900,000
$ 27,000
517,300
544,300
21,000
Weygandt, Managerial Accounting, 5/e, Solutions Manual
523,300
$376,700
(For Instructor Use Only)
EXERCISE 1-14 (Continued)
(c) Current assets
Inventories
Finished goods........................................................
Work in process .....................................................
Raw materials ..........................................................
$21,000
17,200
30,000
$68,200
(d) In a merchandising company’s income statement, the only difference would
be in the computation of cost of goods sold. Beginning and ending finished
goods would be replaced by beginning and ending merchandise inventory, and cost of goods manufactured would be replaced by purchases. In
a merchandising company’s balance sheet, there would be one inventory
account (merchandise inventory) instead of three.
EXERCISE 1-15
1.
2.
3.
4.
5.
6.
7.
8.
(a)
(a)
(a), (c)
(b)
(a)
(a)
(a)
(b), (c)
Copyright © 2010 John Wiley & Sons, Inc.
9.
10.
11.
12.
13.
14.
15.
16.
(a)
(a), (b)
(b)
(b)
(a)
(a)
(a)
(a)
Weygandt, Managerial Accounting, 5/e, Solutions Manual
(For Instructor Use Only)
1-21
EXERCISE 1-16
(a)
SPIVEY MANUFACTURING
Cost of Goods Manufactured Schedule
For the Month Ended June 30, 2011
Work in process inventory, June 1 ....................
Direct materials
Raw materials inventory, June 1 ............
Raw materials purchases..........................
Total raw materials available for use........
Less: Raw materials inventory, June 30....
Direct materials used .................................
Direct labor .............................................................
Manufacturing overhead
Indirect labor .................................................. $5,500
Factory insurance......................................... 4,000
Machinery depreciation .............................. 4,000
Factory utilities.............................................. 3,100
Machinery repairs......................................... 1,800
Miscellaneous factory costs ..................... 1,500
Total manufacturing overhead...........
Total manufacturing costs .................................
Total cost of work in process............................
Less: Work in process inventory, June 30........
Cost of goods manufactured.............................
(b)
5,000
$ 9,000
54,000
63,000
13,100
49,900
57,000
19,900
126,800
131,800
7,000
$124,800
SPIVEY MANUFACTURING
(Partial) Balance Sheet
June 30, 2011
Current assets
Inventories
Finished goods..................................................
Work in process ................................................
Raw materials.....................................................
1-22
$
Copyright © 2010 John Wiley & Sons, Inc.
$ 6,000
7,000
13,100
Weygandt, Managerial Accounting, 5/e, Solutions Manual
$26,100
(For Instructor Use Only)
EXERCISE 1-17
(a) Raw Materials account:
(5,000 – 4,650) X $9 = $3,150
Work in Process account:
(4,600 X 10%) X $9 = $4,140
Finished Goods account:
(4,600 X 90% X 25%) X $9 = $9,315
Cost of Goods Sold account: (4,600 X 90% X 75%) X $9 = $27,945
Selling Expenses account:
50 X $9 = $450
Proof of cost of head lamps allocated (5,000 X $9 = $45,000)
Raw materials
Work in process
Finished goods
Cost of goods sold
Selling expenses
Total
(b) To:
$ 3,150
4,140
9,315
27,945
450
$45,000
Chief Accountant
From:
Student
Subject:
Statement Presentation of Accounts
Two accounts will appear in the income statement. Cost of Goods Sold
will be deducted from net sales in determining gross profit. Selling expenses will be shown under operating expenses and will be deducted
from gross profit in determining net income. Sometimes, the calculation
for Cost of Good Sold is shown on the income statement. In these cases,
the balance in Finished Goods inventory would also be shown on the
income statement.
The other accounts associated with the head lamps are inventory accounts which contain end-of-period balances. Thus, they will be reported
under inventories in the current assets section of the balance sheet in
the following order: finished goods, work in process, and raw materials.
EXERCISE 1-18
(a)
(b)
(c)
(d)
3.
4.
2.
1.
Balanced scorecard
Value chain
Just-in-time inventory
Activity-based costing
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(For Instructor Use Only)
1-23
1-24
Finished Goods Inventory
Work in Process Inventory
Raw Materials Inventory
Raw Materials Purchases
Direct Labor
Indirect Labor
Factory Insurance
Machinery Depreciation
Machinery Repairs
Factory Utilities
Miscellaneous Factory Costs
Totals
Cost of Goods Manufactured
Totals
Copyright © 2010 John Wiley & Sons, Inc.
9,000
5,000
9,000
54,000
57,000
5,500
4,000
4,000
1,800
3,100
1,500
Adjusted
Trial Balance
Dr.
Cr.
5,000
7,000
9,000
13,100
54,000
57,000
5,500
4,000
4,000
1,800
3,100
1,500 000,000
144,900
20,100
000,000 124,800
144,900 144,900
Cost of Goods
Manufactured
Dr.
Cr.
9,000
6,000
Income
Statement
Dr.
Cr.
124,800
SPIVEY MANUFACTURING
Work Sheet (Partial)
For the Month Ended June 30, 2011
6,000
7,000
13,100
Balance
Sheet
Dr.
Cr.
*EXERCISE 1-19
Weygandt, Managerial Accounting, 5/e, Solutions Manual
(For Instructor Use Only)
Cost Item
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Weygandt, Managerial Accounting, 5/e, Solutions Manual
000,000
$43,000
$43,000
$ 75,000
43,000
18,100
$136,100
000,000
$75,000
$75,000
Direct
Materials
1,500
$18,100
1,100
5,700
400
900
$ 7,000
1,500
Product Costs
Direct
Manufacturing
Labor
Overhead
Production cost per helmet = $136,100/10,000 = $13.61.
(b) Total production costs
Direct materials
Direct labor
Manufacturing overhead
Total production cost
Rent on factory equipment
Insurance on factory building
Raw materials
Utility costs for factory
Supplies for general office
Wages for assembly line workers
Depreciation on office equipment
Miscellaneous materials
Factory manager’s salary
Property taxes on factory building
Advertising for helmets
Sales commissions
Depreciation on factory building
(a)
800
300
14,000
7,000
000,000
$22,100
$
Period
Costs
SOLUTIONS TO PROBLEMS
PROBLEM 1-1A
(For Instructor Use Only)
1-25
1-26
Cost Item
Copyright © 2010 John Wiley & Sons, Inc.
$74 X 1,300 = $96,200.
$12 X 5 X 1,300 = $78,000.
$5 X 1,300 = $6,500.
$7,200/12 = $600.
$9,000/12 = $750.
Weygandt, Managerial Accounting, 5/e, Solutions Manual
$ 96,200
78,000
17,050
$191,250
000,000
$96,200
$96,200
Direct
Materials
000,000
$78,000
$78,000
600
750
$17,050
$ 4,900
6,500
3,000
1,300
Product Costs
Direct
Manufacturing
Labor
Overhead
Production cost per system = $191,250/1,300 = $147.12. (rounded)
(b) Total production costs
Direct materials
Direct labor
Manufacturing overhead
Total production cost
(1)
(2)
(3)
(4)
(5)
Raw materials (1)
Wages for workers (2)
Rent on equipment
Indirect materials (3)
Factory supervisor’s salary
Janitorial costs
Advertising
Depreciation on factory building (4)
Property taxes on factory building (5)
(a)
00,000
$8,500
$8,500
Period
Costs
PROBLEM 1-2A
(For Instructor Use Only)
PROBLEM 1-3A
(a) Case 1
A = $7,600 + $5,000 + $8,000 = $20,600
$20,600 + $1,000 – B = $17,000
B = $20,600 + $1,000 – $17,000 = $4,600
$17,000 + C = $18,000
C = $18,000 – $17,000 = $1,000
D = $18,000 – $3,400 = $14,600
E = ($24,500 – $2,500) – $14,600 = $7,400
F = $7,400 – $2,500 = $4,900
Case 2
G + $8,000 + $4,000 = $18,000
G = $18,000 – $8,000 – $4,000 = $6,000
$18,000 + H – $3,000 = $22,000
H = $22,000 + $3,000 – $18,000 = $7,000
(I – $1,400) – K = $7,000
(I – $1,400) – $22,800 = $7,000
I = $1,400 + $22,800 + $7,000 = $31,200
(Note: Item I can only be solved after item K is solved.)
J = $22,000 + $3,300 = $25,300
K = $25,300 – $2,500 = $22,800
$7,000 – L = $5,000
L = $2,000
Copyright © 2010 John Wiley & Sons, Inc.
Weygandt, Managerial Accounting, 5/e, Solutions Manual
(For Instructor Use Only)
1-27
PROBLEM 1-3A (Continued)
(b)
CASE 1
Cost of Goods Manufactured Schedule
Work in process, beginning ........................................
Direct materials ...............................................................
Direct labor .......................................................................
Manufacturing overhead ..............................................
Total manufacturing costs..................................
Total cost of work in process.....................................
Less: Work in process, ending .................................
Cost of goods manufactured......................................
(c)
$ 1,000
$7,600
5,000
8,000
20,600
21,600
4,600
$17,000
CASE 1
Income Statement
Sales ...................................................................................
Less: Sales discounts..................................................
Net sales ............................................................................
Cost of goods sold
Finished goods inventory, beginning.............
Cost of goods manufactured.............................
Cost of goods available for sale.......................
Less: Finished goods inventory, ending......
Cost of goods sold.......................................
Gross profit.......................................................................
Operating expenses.......................................................
Net income........................................................................
$24,500
2,500
$22,000
1,000
17,000
18,000
3,400
14,600
7,400
2,500
$ 4,900
CASE 1
(Partial) Balance Sheet
Current assets
Cash ...........................................................................
Receivables (net) ...................................................
Inventories
Finished goods..............................................
Work in process ............................................
Raw materials.................................................
Prepaid expenses ..................................................
Total current assets .....................................
1-28
Copyright © 2010 John Wiley & Sons, Inc.
$ 4,000
15,000
$3,400
4,600
600
Weygandt, Managerial Accounting, 5/e, Solutions Manual
8,600
400
$28,000
(For Instructor Use Only)
PROBLEM 1-4A
(a)
STELLAR MANUFACTURING COMPANY
Cost of Goods Manufactured Schedule
For the Year Ended June 30, 2011
Work in process, July 1, 2010 ...............
Direct materials
Raw materials inventory,
July 1, 2010 ....................................
Raw materials purchases ..............
Total raw materials available
for use..............................................
Less: Raw materials inventory,
June 30, 2011 .......................
Direct materials used ......................
Direct labor..................................................
Manufacturing overhead
Plant manager’s salary...................
Factory utilities .................................
Indirect labor......................................
Factory machinery depreciation .....
Factory property taxes ...................
Factory insurance ............................
Factory repairs ..................................
Total manufacturing
overhead ................................
Total manufacturing costs .....................
Total cost of work in process................
Less: Work in process, June 30..........
Cost of goods manufactured ................
Copyright © 2010 John Wiley & Sons, Inc.
$ 19,800
$ 48,000
96,400
144,400
39,600
$104,800
149,250
29,000
27,600
24,460
16,000
9,600
4,600
1,400
Weygandt, Managerial Accounting, 5/e, Solutions Manual
112,660
366,710
386,510
18,600
$367,910
(For Instructor Use Only)
1-29
PROBLEM 1-4A (Continued)
(b)
STELLAR MANUFACTURING COMPANY
(Partial) Income Statement
For the Year Ended June 30, 2011
Sales revenues
Sales.......................................................................
Less: Sales discounts.....................................
Net sales ...............................................................
Cost of goods sold
Finished goods inventory,
July 1, 2010......................................................
Cost of goods manufactured.........................
Cost of goods available for sale...................
Less: Finished goods inventory,
June 30, 2011 ........................................
Cost of goods sold...................................
Gross profit..........................................................
(c)
$554,000
4,200
$549,800
96,000
367,910
463,910
95,900
368,010
$181,790
STELLAR MANUFACTURING COMPANY
(Partial) Balance Sheet
June 30, 2011
Assets
Current assets
Cash .......................................................................
Accounts receivable .........................................
Inventories
Finished goods..........................................
Work in process ........................................
Raw materials.............................................
Total current assets ........................
1-30
Copyright © 2010 John Wiley & Sons, Inc.
$ 32,000
27,000
$95,900
18,600
39,600
Weygandt, Managerial Accounting, 5/e, Solutions Manual
154,100
$213,100
(For Instructor Use Only)
PROBLEM 1-5A
(a)
PEDRIANI COMPANY
Cost of Goods Manufactured Schedule
For the Month Ended October 31, 2011
Work in process, October 1 .................
Direct materials
Raw materials inventory,
October 1 ...................................... $ 18,000
Raw materials
purchases.....................................
264,000
Total raw materials available
for use............................................
282,000
Less: Raw materials inventory,
October 31 ...........................
34,000
Direct materials used ....................
Direct labor................................................
Manufacturing overhead
Factory facility rent........................
60,000
Depreciation on factory
equipment ....................................
31,000
Indirect labor....................................
28,000
Factory utilities*..............................
8,400
Factory insurance** .......................
4,800
Total manufacturing
overhead ..............................
Total manufacturing costs ...................
Total cost of work in process..............
Less: Work in process, October 31......
Cost of goods manufactured ..............
$ 16,000
$248,000
190,000
132,200
570,200
586,200
14,000
$572,200
**$12,000 X 70% = $8,400
**$8,000 X 60% = $4,800
Copyright © 2010 John Wiley & Sons, Inc.
Weygandt, Managerial Accounting, 5/e, Solutions Manual
(For Instructor Use Only)
1-31
PROBLEM 1-5A (Continued)
(b)
PEDRIANI COMPANY
Income Statement
For the Month Ended October 31, 2011
Sales (net) ....................................................................
Cost of goods sold
Finished goods inventory, October 1 ........
Cost of goods manufactured........................
Cost of goods available for sale..................
Less: Finished goods inventory,
October 31 ............................................
Cost of goods sold..................................
Gross profit..................................................................
Operating expenses
Advertising expense........................................
Selling and administrative salaries ............
Depreciation expense—sales
equipment.......................................................
Utilities expense* ..............................................
Insurance expense**........................................
Total operating expenses .....................
Net income...................................................................
$780,000
$ 30,000
572,200
602,200
48,000
554,200
225,800
90,000
75,000
45,000
3,600
3,200
216,800
$ 9,000
**$12,000 X 30%
**$8,000 X 40%
1-32
Copyright © 2010 John Wiley & Sons, Inc.
Weygandt, Managerial Accounting, 5/e, Solutions Manual
(For Instructor Use Only)
Cash
Accounts Receivable (net)
Finished Goods Inventory
Work in Process Inventory
Raw Materials Inventory
Plant Assets
Accumulated Depreciation
Notes Payable
Accounts Payable
Income Taxes Payable
Common Stock
Retained Earnings
Sales
Raw Materials Purchases
Direct Labor
Indirect Labor
Factory Repairs
Factory Depreciation
Factory Manager’s Salary
Factory Insurance
Factory Property Taxes
Factory Utilities
Selling Expenses
Administrative Expenses
Income Tax Expense
Totals
Cost of Goods Manufactured
Totals
Net Income
Totals
(a)
Copyright © 2010 John Wiley & Sons, Inc.
236,500
283,900
27,400
17,200
16,000
40,000
11,000
14,900
13,300
96,500
115,200
36,000
1,998,500
16,700
62,900
56,000
27,800
37,200
890,000
Dr.
0,000,000
1,998,500
353,000
45,000
36,200
9,000
352,000
205,300
998,000
Cr.
Adjusted
Trial Balance
Weygandt, Managerial Accounting, 5/e, Solutions Manual
000,000
725,200
000,000
725,200
236,500
283,900
27,400
17,200
16,000
40,000
11,000
14,900
13,300
27,800
37,200
Dr.
000,000
67,900
657,300
725,200
23,400
44,500
Cr.
Cost of Goods
Manufactured
657,300
961,000
87,600
1,048,600
96,500
115,200
36,000
56,000
0,000,000
1,048,600
0,000,000
1,048,600
998,000
50,600
Cr.
Income
Statement
Dr.
DEGLMAN MANUFACTURING COMPANY
Work Sheet
For the Year Ended August 31, 2011
0,000,000
1,088,100
0,000,000
1,088,100
16,700
62,900
50,600
23,400
44,500
890,000
Dr.
Cr.
0,000,000
1,000,500
87,600
1,088,100
353,000
45,000
36,200
9,000
352,000
205,300
Balance
Sheet
*PROBLEM 1-6A
(For Instructor Use Only)
1-33
*PROBLEM 1-6A (Continued)
(b)
DEGLMAN MANUFACTURING COMPANY
Cost of Goods Manufactured Schedule
For the Year Ended August 31, 2011
Work in process,
September 1, 2010 ......................
Direct materials
Raw materials inventory,
September 1, 2010 .............
Raw materials
purchases .............................
Total raw materials
available for use .................
Less: Raw materials
inventory,
August 31, 2011.........
Direct materials used ............
Direct labor ........................................
Manufacturing overhead
Factory manager’s
salary......................................
Indirect labor ............................
Factory repairs ........................
Factory depreciation..............
Factory property taxes..........
Factory utilities........................
Factory insurance...................
Total manufacturing
overhead ......................
Total manufacturing costs ...........
Total cost of work in
process...........................................
Less: Work in process,
August 31, 2011...................
Cost of goods
manufactured ...............................
1-34
Copyright © 2010 John Wiley & Sons, Inc.
$ 27,800
$ 37,200
236,500
273,700
44,500
$229,200
283,900
40,000
27,400
17,200
16,000
14,900
13,300
11,000
139,800
Weygandt, Managerial Accounting, 5/e, Solutions Manual
652,900
680,700
23,400
$657,300
(For Instructor Use Only)
*PROBLEM 1-6A (Continued)
(c)
DEGLMAN MANUFACTURING COMPANY
Income Statement
For the Year Ended August 31, 2011
Sales ..............................................................................
Cost of goods sold
Finished goods inventory,
September 1, 2010 ....................................... $ 56,000
Cost of goods manufactured........................ 657,300
Cost of goods available for sale.................. 713,300
Less: Finished goods inventory,
August 31, 2011...................................
50,600
Cost of goods sold .................................
Gross profit .................................................................
Operating expenses
Selling expenses ..............................................
96,500
Administrative expenses ............................... 115,200
Total operating expenses .....................
Income before income taxes .................................
Income tax expense .................................................
Net income...................................................................
$998,000
662,700
335,300
211,700
123,600
36,000
$ 87,600
DEGLMAN MANUFACTURING COMPANY
Balance Sheet
August 31, 2011
Assets
Current assets
Cash......................................................................
Accounts receivable (net)..............................
Inventories
Finished goods ........................................ $ 50,600
Work in process.......................................
23,400
Raw materials ...........................................
44,500
Total current assets.......................
Property, plant, and equipment
Plant assets........................................................ 890,000
Less: Accumulated depreciation ............... 353,000
Total assets ......................................
Copyright © 2010 John Wiley & Sons, Inc.
Weygandt, Managerial Accounting, 5/e, Solutions Manual
$ 16,700
62,900
118,500
198,100
537,000
$735,100
(For Instructor Use Only)
1-35
*PROBLEM 1-6A (Continued)
DEGLMAN MANUFACTURING COMPANY
Balance Sheet (Continued)
August 31, 2011
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable ...................................................
Accounts payable............................................
Income taxes payable.....................................
Total current liabilities ..........................
Stockholders’ equity
Common stock .................................................
Retained earnings ...........................................
($205,300 + $87,600)
Total stockholders’ equity ...................
Total liabilities and stockholders’
equity......................................................
(d) Aug. 31
31
1-36
Work in Process Inventory
(August 31) ........................................
Raw Materials Inventory
(August 31) ........................................
Manufacturing Summary..........
Manufacturing Summary...................
Work in Process Inventory
(September 1) ..........................
Raw Materials Inventory
(September 1) ..........................
Raw Materials Purchases.........
Direct Labor ..................................
Factory Manager’s Salary ........
Indirect Labor...............................
Factory Depreciation .................
Factory Repairs ...........................
Factory Utilities ...........................
Factory Insurance.......................
Factory Property Taxes ............
Copyright © 2010 John Wiley & Sons, Inc.
$ 45,000
36,200
9,000
90,200
$352,000
292,900
644,900
$735,100
23,400
44,500
67,900
725,200
Weygandt, Managerial Accounting, 5/e, Solutions Manual
27,800
37,200
236,500
283,900
40,000
27,400
16,000
17,200
13,300
11,000
14,900
(For Instructor Use Only)
*PROBLEM 1-6A (Continued)
Aug. 31
31
31
Finished Goods Inventory
(August 31).........................................
Sales .........................................................
Income Summary.........................
50,600
998,000
1,048,600
Income Summary .................................
Finished Goods Inventory
(September 1)...........................
Manufacturing Summary ..........
Selling Expenses .........................
Administrative Expenses..........
Income Tax Expense ..................
961,000
Income Summary .................................
Retained Earnings.......................
87,600
(e)
Aug. 31
Aug. 31
31
Copyright © 2010 John Wiley & Sons, Inc.
56,000
657,300
96,500
115,200
36,000
Manufacturing Summary
725,200 Aug. 31
31
725,200
Income Summary
961,000 Aug. 31
87,600
1,048,600
Weygandt, Managerial Accounting, 5/e, Solutions Manual
87,600
67,900
657,300
725,200
1,048,600
1,048,600
(For Instructor Use Only)
1-37