Ee 45. Cost of Goods SoldPietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,500 units will be produced, with the following total costs:Direct materialsDirect laborVariable overheadFixed overheadNext year, Pietro expects to purchase $120,000 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:Direct materialsInventory$7,000$6,900$3,00023,000205,000Work-In-ProcessInventory$14,400$16,400BeginningEndingPietro expects to produce 50,500 units and sell 49,800 units. Beginning inventory of finished goods is $42,500, and ending inventory of finished goods is expected to be$34,000.Cost of goods manufacturedAdd: Beginning finished goodsCost of goods available for saleLess: Ending finished goodsCost of goods soldRequired:1. Prepare a statement of cost of goods sold in good form.Pietro Frozen Foods, Inc.Statement of Cost of Goods SoldFor the Coming Year42,500

The cost of goods manufactured comprises direct materials used, direct labor and manufacturing…

Cost of Goods Sold Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,500 units will be produced, with the following total costs: Direct materials 7 Direct labor Variable overhead Fixed overhead $3,000 23,000 205,000 Next year, Pietro expects to purchase $120,000 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows: Direct materials Inventory $7,000 $6,900 Work-In-Process Inventory Beginning inding Metro expects to produce 50,500 units and sell 49,800 units. Beginning inventory of finished goods is $42,500, and ending inventory of finished goods is expected to be 34,000. $14,400 $16,400 equired: - Prepare a statement of cost of goods sold in good form. Pietro Frozen Foods, Inc.

Cost of Goods Sold Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,500 units will be produced, with the following total costs: Direct materials 7 Direct labor Variable overhead Fixed overhead $3,000 23,000 205,000 Next year, Pietro expects to purchase $120,000 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows: Direct materials Inventory $7,000 $6,900 Work-In-Process Inventory Beginning inding Metro expects to produce 50,500 units and sell 49,800 units. Beginning inventory of finished goods is $42,500, and ending inventory of finished goods is expected to be 34,000. $14,400 $16,400 equired: - Prepare a statement of cost of goods sold in good form. Pietro Frozen Foods, Inc.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 7CE: Jean and Tom Perritz own and manage Happy Home Helpers. Inc. (HHH), a house-cleaning service. Each...

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Patterson Corporation expects to incur 70,000 of factory overhead and 60,000 of general and administrative costs next year. Direct labor costs at 5 per hour are expected to total 50,000. If factory overhead is to be applied per direct labor hour, how much overhead will be applied to a job incurring 20 hours of direct labor? a. 120 b. 260 c. 28 d. 140
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Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold through specialty golf shops. The company is in the process of developing itsoperating budget for the coming year. Selected data regarding the companys two products areas follows: Manufacturing overhead is applied to units using direct labor hours. Variable manufacturing overhead Ls projected to be 25,000, and fixed manufacturing overhead is expected to be15,000. The estimated cost to produce one unit of the laminated putter head is: a. 42. b. 46. c. 52. d. 62.
Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet: Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 274,000 pounds at 2.50 per pound c. Direct materials used: 270,300 pounds d. Direct labor: 40,100 hours at 17.95 per hour e. Fixed overhead: 161,700 f. Variable overhead: 122,000 Required: 1. Compute price and usage variances for direct materials. 2. Compute the direct labor rate and labor efficiency variances. 3. Compute the fixed overhead spending and volume variances. Interpret the volume variance. 4. Compute the variable overhead spending and efficiency variances. 5. Prepare journal entries for the following: a. The purchase of direct materials b. The issuance of direct materials to production (Work in Process) c. The addition of direct labor to Work in Process d. The addition of overhead to Work in Process e. The incurrence of actual overhead costs f. Closing out of variances to Cost of Goods Sold
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Standard unit cost and journal entries The normal capacity of Algonquin Adhesives Inc. is 40,000 direct labor hours and 20,000 units per month. A finished unit requires 6 lb of materials at an estimated cost of 2 per pound. The estimated cost of labor is 10.00 per hour. The plant estimates that overhead (all variable) for a month will be 40,000. During the month of March, the plant totaled 34,800 direct labor hours at an average rate of 9.50 an hour. The plant produced 18,000 units, using 105,000 lb of materials at a cost of 2.04 per pound. 1. Prepare a standard cost summary showing the standard unit cost. 2. Make journal entries to charge materials and labor to Work in Process.
Jean and Tom Perritz own and manage Happy Home Helpers. Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Next year, HHH expects to purchase 25,600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: There is no work-in-process inventory and no finished goods inventory; in other words, a cleaning is started and completed on the same day. Required: 1. Prepare a statement of cost of services sold in good form. 2. How does this cost of services sold statement differ from the cost of goods sold statement for a manufacturing firm?
Olin Company manufactures and distributes carpentry tools. Production of the tools is in the mature portion of the product life cycle. Olin has a sales force of 20. Salespeople are paid a commission of 7 percent of sales, plus expenses of 35 per day for days spent on the road away from home, plus 0.50 per mile. They deliver products in addition to making the sales, and each salesperson is required to own a truck suitable for making deliveries. For the coming quarter, Olin estimates the following: On average, a salesperson travels 6,000 miles per quarter and spends 38 days on the road. The fixed marketing and administrative expenses total 400,000 per quarter. Required: 1. Prepare an income statement for Olin Company for the next quarter. 2. Suppose that a large hardware chain, MegaHardware, Inc., wants Olin Company to produce its new SuperTool line. This would require Olin Company to sell 80 percent of total output to the chain. The tools will be imprinted with the SuperTool brand, requiring Olin to purchase new equipment, use somewhat different materials, and reconfigure the production line. Olins industrial engineers estimate that cost of goods sold for the SuperTool line would increase by 15 percent. No sales commission would be incurred, and MegaHardware would link Olin to its EDI system. This would require an annual cost of 100,000 on the part of Olin. MegaHardware would pay shipping. As a result, the sales force would shrink by 80 percent. Should Olin accept MegaHardwares offer? Support your answer with appropriate calculations.