Ex 16. 2 (Basic Types of Manufacturing Costs)
Into which of the three elements of manufacturing cost would each of the following be classified?
- a. Tubing used in manufacturing bicycles.
- b. Wages paid by an automobile manufacturer to employees who test-drive completed automobiles.
- c. Property taxes on machinery.
- d. Gold bullion used by a jewelry manufacturer.
- e. Wages of assembly-line workers who package frozen food.
- f. Salary of plant superintendent.
- g. Electricity used in factory operations.
- h. Salary of the nurse in a factory first-aid station.
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Ex. 16. 3 (Product Costs and Period Costs)
Indicate whether each of the following should be considered a product cost or a period cost. If you identify the item as a product cost, also indicates whether it is a direct or an indirect cost. For example, the answer to item 0 is “indirect product cost. ” Begin with item a. 0. Property taxes on the factory building.
- a. Cost of disposal of hazardous waste materials to a chemical plant.
- b. Amounts paid by a mobile home manufacturer to a subcontractor who installs plumbing in each mobile home.
- c. Depreciation on sales showroom fixtures.
- d. Salaries of security guards in an administrative office building.
- e. Salaries of factory security guards.
- f. Salaries of office workers in the credit department.
- g. Depreciation on the raw materials warehouse.
- h. Income taxes on a profitable manufacturing company.
Ex. 16. 5 (Preparing a Schedule of the Cost of Finished Goods Manufactured).
The accounting records of NuTronics, Inc., include the following information for the year ended December 31, 2007.
|Dec. 31||Jan. 1|
|Inventory of materials||$ 24,000||$ 20,000|
|Inventory of work in process||8000||12000|
|Inventory of finished goods||90000||80000|
|Direct materials used||210000|
|General and administrative expenses||140000|
Overhead is assigned to production at $192,000.
- a. Prepare a schedule of the cost of finished goods manufactured. (Not all of the data given above are used in this schedule).
- b. Assume that the company manufactures a single product and that 20,000 units were completed during the year. What is the average per-unit cost of manufacturing this product?
Ex 16. 9 (Preparing an Income Statement Using the Cost of Finished Goods Manufactured).
Mayville Company, a sole proprietorship, reports the following information pertaining to its operating activities:
|Ending Balance||Beginning Balance|
|Materials Inventory||$ 20,000||$ 40,000|
|Work in Process Inventory||29000||60000|
|Finished Goods Inventory||52000||42000|
During the year, the company purchased $30,000 of direct materials and incurred $21,000 of direct labor costs. Total manufacturing overhead for the year amounted to $18,000. Selling and administrative expenses amounted to $60,000, and the company’s annual sales amounted to $200,000.
- a. Prepare Mayville’s schedule of the cost of finished goods manufactured.
- b. Prepare Mayville’s income statement (ignore income taxes).
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Classification of Manufacturing Costs and Period Costs in NuTronics and Mayville Company. (2018, Aug 02). Retrieved from https://phdessay.com/accounting-ch16-ex/
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