Q-8 Following information related to Shahid manufacturing company for the year ended December 31th, 2007. Direct material beginning Direct material purchased Direct material ending Direct labor Rs. 50,000 300,000 20,000 ? Factory overhead (70% of conversion cost) Work in process ending Work in process beginning (30% more than its ending) Cost of goods manufactured is 8/15 of Sales Sales Revenue 140,000 ? Finished goods beginning Finished goods ending Administrative and general expenses Selling expenses 1,500,000 30,000 80,000 210,000 20,000 REQUIRED: Calculate all missing figures and also prepare Schedule for Cost of goods manufactured and Income statement for the year ended June 30th. 2007.

Q-8 Following information related to Shahid manufacturing company for the year ended December 31th, 2007. Direct material beginning Direct material purchased Direct material ending Direct labor Rs. 50,000 300,000 20,000 ? Factory overhead (70% of conversion cost) Work in process ending Work in process beginning (30% more than its ending) Cost of goods manufactured is 8/15 of Sales Sales Revenue 140,000 ? Finished goods beginning Finished goods ending Administrative and general expenses Selling expenses 1,500,000 30,000 80,000 210,000 20,000 REQUIRED: Calculate all missing figures and also prepare Schedule for Cost of goods manufactured and Income statement for the year ended June 30th. 2007.

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Process Cost Systems

Section: Chapter Questions

Problem 18.17EX: Cost of production report The Cutting Department of Karachi Carpet Company provides the following...

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Entries for process cost system Pori Ormond Carpel Company manufactures carpets. Fiber is placed in process in the Spinning Department, where it is spun into yarn. The output of the Spinning Department is transferred to the Tufting Department, where carpel hacking is added al the beginning of the process and the process is completed. On January 1, Port Ormond Carpet Company had the following inventories: Finished Goods 62,000 Work in ProcessSpinning Department 35,000 Work in ProcessTufting Department 28,500 Materials 17,000 Departmental accounts are maintained for factory overhead, and both have zero balances on January 1. Manufacturing operations for January are summarized as follows: a Materials purchased on account 500,000 b Materials requisitioned for use FiberSpinning Department 275,000 Carpet backingTufting Department 110,000 Indirect materialsSpinning Department 46,000 Indirect materialsTufting Department 39,500 c. Labor used Direct laborSpinning Department 185,000 Direct laborTufting Department 98,000 Indirect laborSpanning Department 18,500 Indirect laborTufting Department 9,000 d Depreciation charged on fixed assets: Spinning Department 12,500 Tufting Department 8,500 e. Expired prepaid factory insurance: Spinning Department 2,000 Tufting Department 1,000 f. Applied factory overhead Spinning Department 80,000 Tufting Department 55,000 g Production costs transferred from Spinning Department to Tufting Department 547,000 h Production costs transferred from Tufting Department to Finished Goods 807,200 i. Cost of goods sold during the period 795,200 Instructions 1. Journalize the entries to record the operations, identifying each entry by letter. 2. Compute the January 31 balances of the inventory accounts. 3. Compute the January 31 balances of the factory overhead accounts.
Communication The controller of New Wave Sounds Inc. prepared the following product profitability report for management, using activity-based costing methods for allocating both the factory overhead and the marketing expenses. As such, the controller has confidence in the accuracy of this report. Home Theater Speakers Wireless Speakers Wireless Headphones Total Sales 1,500,000 1,200,000 900,000 3,600,000 Cost of goods sold 1,050,000 720,000 810,000 2,580,000 Gross profit 450,000 480,000 90,000 1,020,000 Marketing expenses 600,000 120,000 72,000 792,000 Income from operations (150,000) 360,000 18,000 228,000 In addition, the controller interviewed the vice president of marketing, who provided the following insight into the company's three products: The home theater speakers are an older product that is highly recognized in the marketplace. The wireless speakers are a new product that was just recently bunched. The wireless headphones are a new technology that has no competition in the marketplace, and it is hoped that they will become an important future addition to the companys product portfolio. Initial indications are that the product is well received by customers. The controller believes that the manufacturing costs for all three products are in line with expectations. Based on the information provided: 1. Calculate the ratio of gross profit to sales and the ratio of income from operations to sales for each product. 2. Write a brief (one page) memo using the product profitability report and the calculations in (1) to make recommendations to management with respect to strategies for the three products.
Construct and interpret a product profitability report, allocating selling and administrative expenses Naper Inc. manufactures power equipment. Naper has two primary productsgenerators and air compressors. The following report was prepared by the controller for Napers senior marketing management for the year ended December 31: Generators Air Compressors Total Revenue 4,200,000 3,000,000 7,200,000 Cost of goods sold 2,940,000 2,100,000 5,040,000 Gross profit 1,260,000 900,000 2,160,000 Selling and administrative expenses 610,000 Income from operations 1,550,000 The marketing management team was concerned that the selling and administrative expenses were not traced to the products. Marketing management believed that some products consumed larger amounts of selling and administrative expense than did other products. To verify this, the controller was asked to prepare a complete product profitability report, using activity-based costing. The controller determined that selling and administrative expenses consisted of two activities: sales order processing and post-sale customer service. The controller was able to determine the activity base and activity rate for each activity, as follows: Activity Activity Base Activity Rate Sales order processing Sales orders 65 per sales order Post-sale customer service Service requests 200 per customer service request The controller determined the following activity-base usage information about each product: Generators Air Compressors Number of sales orders 3,000 4,000 Number of service requests 225 550 A. Determine the activity cost of each product for sales order processing and post-sale customer service activities. B. Use the information in (A) to prepare a complete product profitability report dated for the year ended December 31. Compute the gross profit to sales and the income from operations to sales percentages for each product. (Round to two decimal places.) C. Interpret the product profitability report. How should management respond to the report?
Cost of production report The Cutting Department of Karachi Carpet Company provides the following data for January 2016. Assume that all materials are added at the beginning of the process. Work in process. January 1, 1,400 units. 75% completed 22,960 Direct materials (1,400 12.65) 517,710 Conversion (1,400 75% .00) 5,250 22,960 Materials added during January from Weaving Department, 58,000 units 742,400 Direct labor for January 134,550 Factory overhead for January 151,611 Goods finished during January (includes goods in process, January 1), 5,.200 units Work in process. January 31, 3,200 units, 30% completed a. Prepare a cost of production report for the Cutting Department. b. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (December).