M7-3 Identifying the Cost of Inventories for a Manufacturer LO7-1 Operating costs incurred by a manufacturing company become either (1) part of the cost of inventory to be expensed as cost of goods sold at the time the finished goods are sold or (2) expenses at the time they are incurred. Indicate whether each of the following costs belongs in category (1) or (2). a. Wages of factory workers b. Costs of raw materials purchased c. Sales salaries d. Heat, light, and power for the factory building e. Heat, light, and power for the headquarters office building

M7-3 Identifying the Cost of Inventories for a Manufacturer LO7-1 Operating costs incurred by a manufacturing company become either (1) part of the cost of inventory to be expensed as cost of goods sold at the time the finished goods are sold or (2) expenses at the time they are incurred. Indicate whether each of the following costs belongs in category (1) or (2). a. Wages of factory workers b. Costs of raw materials purchased c. Sales salaries d. Heat, light, and power for the factory building e. Heat, light, and power for the headquarters office building

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter10: Accounting Systems For Manufacturing Operations

Section: Chapter Questions

Problem 10.10E: Amounts for materials Big Timber Furniture Company manufactures furniture. Big Timber Furniture uses...

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1. Supply the missing data in the following cases, each case is independent of the others. Schedule of Cost of Goods ManufacturedDirect materials . . . . . . . . . . . . . . . . . . . . . .P 4,500Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . ?Manufacturing overhead . . . . . . . . . . . . . . . 5,000Total manufacturing costs . . . . . . . . . . . . . . 18,500Beginning work in process inventory . . . . . 2,500Ending work in process inventory . . . . . . . . ?Cost of goods manufactured . . . . . . . . . . . 18,000 Income StatementSales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 30,000Beginning finished goods inventory . . . . . 1,000Cost of goods manufactured . . . . . . . . . . . 18,000Goods available for sale . . . . . . . . . . . . . . . ?Ending finished goods inventory . . . . . . . . ?Cost of goods sold . . . . . . . . . . . . . . . . . . . . 17,000Gross margin . . . . . . . . . . . . . . . . . . . . . . . . 13,000Selling and administrative…