QUIZ 1 ----CH1/2/3
1. Schedule of Cost of Goods Manufactured; Income Statement; Cost Behavior
Selected account balances for the year ended December 31 are provided below for Superior Company:（20 MARKS） Selling and administrative salaries Insurance, factory Utilities, factory Purchases of raw materials Indirect labor Direct labor Advertising expense Cleaning supplies, factory Sales commissions Rent, factory building Maintenance, factory Inventory balances at the beginning and end of the year were as follows: Work in process ...... Beginning of End of the Year the Year $18,000 $21,500 ? ? $80,000 $4,500 $20,000 $155,000 $36,000 ? $32,000 $3,000 $60,000 $100,000 $25,000 Raw materials ......... $13,000 Finished goods ......... $31,000 The total manufacturing costs for the year were $399,500; the goods available for sale totaled $434,000; and the cost of goods sold totaled $405,600. Required:
1. Prepare a schedule of cost of goods manufactured and the cost of goods sold section of
the company’s income statement for the year.
2. The company produced the equivalent of 25,000 units during the year. Compute the
average cost per unit for direct materials used and the average cost per unit for rent on the factory building.
3. In the following year the company expects to produce 20,000 units. What average cost
per unit and total cost would you expect to be incurred for direct materials? For rent on the factory building? (Assume that direct materials is a variable cost and that rent is a fixed cost.)
4. Explain to the president the reason for any difference in the average cost per unit
between (2) and (3) above.
2. Variable Costing Income Statement; Reconciliation （20 MARKS）
During Denton Company’s first two years of operations, the company reported absorption costing net operating income as follows:
Sales (@$60 per unit)...................................... Cost of goods sold ........................................... Gross margin ................................................... Selling and administrative expenses* ............. Net operating income ...................................... _______
*$4 per unit variable; $360,000 fixed each year.
Year 1 1,720,000 680,000 520,000 $ 160,000 Year 2 2,580,000 1,020,000 600,000 $ 420,000 $2,400,000 $3,600,000
The company’s $43 unit product cost is computed as follows:
Direct materials ........................................................................ Direct labor .............................................................................. Variable manufacturing overhead ............................................ Fixed manufacturing overhead ($1,200,000 ÷ 50,000 units) ... Unit product cost ...................................................................... Production and cost data for the two years are given below:
Units produced ........ Units sold ................
Year 1 50,000 40,000
Year 2 50,000 60,000
$12 6 1 24 $43 Required:
1. Prepare a variable costing income statement for each year.
2. Reconcile the absorption costing and the variable costing net operating income figures for each
year.
3. Variable and Absorption Costing Unit Product Costs and Income Statements; Explanation of Difference in Net Operating Income （20 MARKS）
Wiengot Antennas, Inc., produces and sells a unique type of TV antenna. The company has just opened a new plant to manufacture the antenna. The following cost and revenue data have been provided for the first month of the plant’s operation:
Beginning inventory ..................................................... Units produced .............................................................. Units sold ...................................................................... Selling price per unit .....................................................
Selling and administrative expenses:
Variable per unit ...................................................... Fixed (total) ............................................................. Manufacturing costs:
Direct materials cost per unit ................................... Direct labor cost per unit ......................................... Variable manufacturing overhead cost per unit ....... Fixed manufacturing overhead cost (total) ..............
0 50,000 45,000 $61
$4 $640,000
$12 $9 $3 $900,000
Management is anxious to see how profitable the new antenna will be and has asked that an income statement be prepared for the month. Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for the month.
2. Assume that the company uses the contribution approach with variable costing.
a. Determine the unit product cost.
b. Prepare an income statement for the month.
3. Explain the reason for any difference in the ending inventory balance under the two costing
methods and the impact of this difference on reported net operating income.
4. High-Low Method; Cost of Goods Manufactured（20 MARKS）
Carlyle Company manufactures a single product. The company keeps careful records of manufacturing activities from which the following information has been extracted:
Number of units produced....................... Cost of goods manufactured ................... Work in process inventory, beginning .... Work in process inventory, ending ......... Direct materials cost per unit .................. Direct labor cost per unit ......................... Manufacturing overhead cost, total .........
Level of Activity January–Low
7,200 $225,000 $4,500 $5,400 $3.60 $7.50
?
April–High
9,000 $270,000 $14,400 $8,100 $3.60 $7.50
?
The company’s manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning, management wants to determine how much of the overhead cost is variable with units produced and how much of it is fixed per month. Required:
1. For both January and April, estimate the amount of manufacturing overhead cost added to
production. The company had no underapplied or overapplied overhead in either month. (Hint: A useful way to proceed might be to construct a schedule of cost of goods manufactured.) 2. Using the high-low method, estimate a cost formula for manufacturing overhead. Express the
variable portion of the formula in terms of a variable rate per unit of product.
3. If 8,400 units are produced during a month, what would the cost of goods manufactured be?
(Assume that work in process inventories do not change and that overhead cost is neither underapplied nor overapplied for the month.)
5.High-Low Analysis and Predicting Cost（10 MARKS）
Prospero Corporation’s total overhead costs at various levels of activity are presented below:
Month
August ..... September October .... November
ours 8,000 12,000 16,000 4,000
Total
Machine-HOverhead
Costs $119,400 $142,800 $166,200 $93,120
管理会计quiz 1--ch 1 2 3
