Number 1An analysis of the accounts of Williams Company reveals the following manufacturing cost datafor the month ended September 30, 2017.bogduring MayInventoriesRaw materialsBeginning$12,0007,50010,000Ending$11,3005,00012,000Work in processFinished goodsCosts incurred: raw materials purchases $62,500, direct labor $51,000, manufacturingoverhead $25,650. The specific overhead costs were: indirect labor $6,500, factory insurance$5,000, machinery depreciation $6,000, machinery repairs $2,800, factory utilities $3,600,miscellaneous factory costs $1,750. Assume that all raw materials used were direct materials.Instructions(а)Prepare the cost of goods manufactured sched ule for the month ended 9/30/17(b)Show the presentation of the ending inventories on 9/30/17, Balance Sheet.Williams Company is considering the purchase of a new automated assembly line forits factory. The purchase would result in several changes in Williams' cost structure.Both direct labor and indirect labor would decrease by 40%. Factory insurancewould increase to $8,000, machinery depreciation would double, machinery repairswould decrease to $500, utilities would decrease to $2,500 and miscellaneousfactory costs would increase to $1,850. Materials usage would remain at currentlevels.(c)Analyze the new purchase by preparing a cost of goods manufactured sched ule forSeptember 30, 2017 using the new data. Should Williams Company make thispurchase? Explain the factors that should be considered in the decision?(c)

Question
Asked Oct 30, 2019
Number 1
An analysis of the accounts of Williams Company reveals the following manufacturing cost data
for the month ended September 30, 2017.
bog
during May
Inventories
Raw materials
Beginning
$12,000
7,500
10,000
Ending
$11,300
5,000
12,000
Work in process
Finished goods
Costs incurred: raw materials purchases $62,500, direct labor $51,000, manufacturing
overhead $25,650. The specific overhead costs were: indirect labor $6,500, factory insurance
$5,000, machinery depreciation $6,000, machinery repairs $2,800, factory utilities $3,600,
miscellaneous factory costs $1,750. Assume that all raw materials used were direct materials.
Instructions
(а)
Prepare the cost of goods manufactured sched ule for the month ended 9/30/17
(b)
Show the presentation of the ending inventories on 9/30/17, Balance Sheet.
Williams Company is considering the purchase of a new automated assembly line for
its factory. The purchase would result in several changes in Williams' cost structure.
Both direct labor and indirect labor would decrease by 40%. Factory insurance
would increase to $8,000, machinery depreciation would double, machinery repairs
would decrease to $500, utilities would decrease to $2,500 and miscellaneous
factory costs would increase to $1,850. Materials usage would remain at current
levels.
(c)
Analyze the new purchase by preparing a cost of goods manufactured sched ule for
September 30, 2017 using the new data. Should Williams Company make this
purchase? Explain the factors that should be considered in the decision?
(c)
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Number 1 An analysis of the accounts of Williams Company reveals the following manufacturing cost data for the month ended September 30, 2017. bog during May Inventories Raw materials Beginning $12,000 7,500 10,000 Ending $11,300 5,000 12,000 Work in process Finished goods Costs incurred: raw materials purchases $62,500, direct labor $51,000, manufacturing overhead $25,650. The specific overhead costs were: indirect labor $6,500, factory insurance $5,000, machinery depreciation $6,000, machinery repairs $2,800, factory utilities $3,600, miscellaneous factory costs $1,750. Assume that all raw materials used were direct materials. Instructions (а) Prepare the cost of goods manufactured sched ule for the month ended 9/30/17 (b) Show the presentation of the ending inventories on 9/30/17, Balance Sheet. Williams Company is considering the purchase of a new automated assembly line for its factory. The purchase would result in several changes in Williams' cost structure. Both direct labor and indirect labor would decrease by 40%. Factory insurance would increase to $8,000, machinery depreciation would double, machinery repairs would decrease to $500, utilities would decrease to $2,500 and miscellaneous factory costs would increase to $1,850. Materials usage would remain at current levels. (c) Analyze the new purchase by preparing a cost of goods manufactured sched ule for September 30, 2017 using the new data. Should Williams Company make this purchase? Explain the factors that should be considered in the decision? (c)

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check_circleExpert Solution
Step 1

(a)

Prepare cost of goods manufactured schedule:

 

Williams Company
Cost of Goods Manufactured Schedule
Amount Amount Amount
Particulars
Opening work in process
$7,500
Add: Direct materials
Opening materials
Add: Raw material purchases
$12,000
$62,500
$74,500
Total raw materials available
$11,300
Less: Ending materials
$63,200
$51,000
Direct material used
Direct labor
Manufacturing overhead:
$6,500
Indirect labor
$5,000
$6,000
Factory insurance
Machinery depreciation
Factory utilities
Machinery repairs
Miscellaneous factory costs
$3,600
$2,800
$1,750
$25,650
Total manufacturing overhead
Total manufacturing costs
Total cost of work in process
Less: Ending work in process
$139,850
$147,350
$5,000
$142,350
Cost of goods manufactured
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Williams Company Cost of Goods Manufactured Schedule Amount Amount Amount Particulars Opening work in process $7,500 Add: Direct materials Opening materials Add: Raw material purchases $12,000 $62,500 $74,500 Total raw materials available $11,300 Less: Ending materials $63,200 $51,000 Direct material used Direct labor Manufacturing overhead: $6,500 Indirect labor $5,000 $6,000 Factory insurance Machinery depreciation Factory utilities Machinery repairs Miscellaneous factory costs $3,600 $2,800 $1,750 $25,650 Total manufacturing overhead Total manufacturing costs Total cost of work in process Less: Ending work in process $139,850 $147,350 $5,000 $142,350 Cost of goods manufactured

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Step 2

(b)

Prepare partial balance sheet, using ending inventories:

 

Williams Company
Partial Balance Sheet
Current Assets:
Inventories:
Finished goods
Work in process
Raw materials
$12,000
$5,000
$11,300
$28,300
Total
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Williams Company Partial Balance Sheet Current Assets: Inventories: Finished goods Work in process Raw materials $12,000 $5,000 $11,300 $28,300 Total

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Step 3

(c)

Prepare new cost of goods manufact...

Williams Company
Cost of Goods Manufactured Schedule
Amount Amount Amount
Particulars
Opening work in process
$7,500
Add: Direct materials
Opening materials
Add: Raw material purchases
$12,000
$62,500
$74,500
Total raw materials available
$11,300
Less: Ending materials
$63,200
Direct material used
Direct labor ($51,000- ($51,000*40%))
Manufacturing overhead:
Indirect labor ($6,500 - ($6,500*40%))
$30,600
$3,900
$8,000
$12,000
$2,500
Factory insurance
Machinery depreciation
Factory utilities
Machinery repairs
Miscellaneous factory costs
$500
$1,850
$28,750
Total manufacturing overhead
Total manufacturing costs
Total cost of work in process
Less: Ending work in process
$122,550
$130,050
$5,000
$125,050
Cost of goods manufactured
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Williams Company Cost of Goods Manufactured Schedule Amount Amount Amount Particulars Opening work in process $7,500 Add: Direct materials Opening materials Add: Raw material purchases $12,000 $62,500 $74,500 Total raw materials available $11,300 Less: Ending materials $63,200 Direct material used Direct labor ($51,000- ($51,000*40%)) Manufacturing overhead: Indirect labor ($6,500 - ($6,500*40%)) $30,600 $3,900 $8,000 $12,000 $2,500 Factory insurance Machinery depreciation Factory utilities Machinery repairs Miscellaneous factory costs $500 $1,850 $28,750 Total manufacturing overhead Total manufacturing costs Total cost of work in process Less: Ending work in process $122,550 $130,050 $5,000 $125,050 Cost of goods manufactured

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