Smooth Sounds manufactures and sells a new line of MP-3 players. Unfortunately, Smooth Sounds suffered serious fire damage at its home office. As a result, the accounting record for October were partially destroyed- and completely jumbled. Smooth Sounds has hired you to help figure out the missing pieces of the accounting puzzle. Work in process inventory, October 31. $1,500 Accounts payable, October 1……… $3,000 Finished goods inventory, October 1….. 4,300 Direct materials used in October…….. 8,000 Direct labor in October……. 3,000 Accounts payable, October 31…… 5,200 Purchase of direct materials in October 9,000 Accounts receivable, October 31…… 6,500 Work in process inventory, October 1----- 0 Direct materials inventory, Oct. 31…. 3,000 Revenues in October………… 27,000 Manufacturing Overhead in October… 6,300 Accounts receivable, October 1….. 2,000 Gross profit in October………… 12,000 Required: Compute the following amounts a. Manufacturing costs b. Cost of goods manufactured in October c. Cost of goods sold in October d. Beginning direct materials inventory e. Ending finished goods inventory
- Smooth Sounds manufactures and sells a new line of MP-3 players. Unfortunately, Smooth Sounds suffered serious fire damage at its home office. As a result, the accounting record for October were partially destroyed- and completely jumbled. Smooth Sounds has hired you to help figure out the missing pieces of the accounting puzzle.
Work in process inventory, October 31. $1,500 Accounts payable, October 1……… $3,000
Finished goods inventory, October 1….. 4,300 Direct materials used in October…….. 8,000
Direct labor in October……. 3,000 Accounts payable, October 31…… 5,200
Purchase of direct materials in October 9,000 Accounts receivable, October 31…… 6,500
Work in process inventory, October 1----- 0 Direct materials inventory, Oct. 31…. 3,000
Revenues in October………… 27,000 Manufacturing
Accounts receivable, October 1….. 2,000
Gross profit in October………… 12,000
Required: Compute the following amounts
a.
b. Cost of goods manufactured in October
c. Cost of goods sold in October
d. Beginning direct materials inventory
e. Ending finished goods inventory
2. The MTN Company has assembled the following data pertaining to certain costs which cannot be easily identified as either fixed or variable. MTN has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.
|
Cost |
Hours |
|
$100,000 |
3,500 |
|
61,000 |
2,000 |
|
85,000 |
2,600 |
|
78,200 |
2,450 |
|
91,000 |
3,000 |
|
110,400 |
3,900 |
|
106,000 |
3,740 |
|
93,000 |
3,380 |
a) Calculate the variable cost per hour
b) Calculate the total fixed costs
c) Write the equation which measures the cost behavior of the costs
d) Calculate the operating costs for 3,750 hours.
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