Financial and Managerial Accounting: Information for Decisions
Financial and Managerial Accounting: Information for Decisions
6th Edition
ISBN: 9780078025761
Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 14, Problem 6BTN

b.

To determine

Factory overheads.

b.

Expert Solution
Check Mark

Explanation of Solution

Compute total factory overheads as follow:

Particulars Amount
($)
Factory supervision 122,500
Factory utilities 36,250
Factory supplied used 15,750
Factory building expense 79,750
Indirect labor 60,000
Total factory overheads 314,250

Table (1)

Hence, total factory cost is 314,250.

c.

To determine

The manufacturing cost.

c.

Expert Solution
Check Mark

Explanation of Solution

Given,

Direct labor is $650,750.

Factory overheads are 314,250.

Material used is $635,000.

Formula to calculate the manufacturing cost:

Manufacturecost=Marerialused+Factoryoverheads+Directlabor

Substitute, $635,000 for the material used, $314,250 for the factory overheads and $650,750 for the direct material,

Manufacturecost=$635,000+$314,250+$650,750=$1,599,250

Hence, manufacturing cost is $1,599,250.

d.

To determine

Total cost of the work in process.

d.

Expert Solution
Check Mark

Explanation of Solution

Given,

Opening work in progress is $15,875.

Closing work in process is $14,000.

Formula to calculate the cost of work in process:

Costofworkinprocess=OpeningbalanceClosingbalance

Substitute $15,875 for the opening balance and $14,000 for the closing balance,

Costofworkinprocess=$15,875$14,000=$1,875

Hence, cost of work in process is $1,875.

e.

To determine

Total cost of manufactured.

e.

Expert Solution
Check Mark

Explanation of Solution

Given,

Opening finished goods is $164,375.

Closing finished goods is $129,000.

Formula to calculate the cost of the goods manufactured:

Costofmanufactured=OpeningbalnaceClosingbalance

Substitute $164,375 for the opening balance and $129,000 for the closing balance,

Costofmanufactured=$164,375$129,000=$35,375

Hence, cost of manufacturing is $35,375.

2.

To determine

To explain:

Checking cost of the goods manufactured match with the instructor or not.

2.

Expert Solution
Check Mark

Explanation of Solution

Yes, the cost of manufactured is matched with instructor.

3.

a.

To determine

Net sales.

3.

a.

Expert Solution
Check Mark

Explanation of Solution

Total sale is $3,275,000.

Sales discount is $57,500.

Sales salaries expenses are $286,250.

Formula to calculate the net sales:

Netsales=SalesSalesdiscountSalesexpense

Substitute $3,275,000 for the sales, $57,500 for the sales discount and $286,250 for the sales expense,

Netsales=$3,275,000$57,500$286,250=$2,931,250

Hence, net sales are $2,931,250.

b.

To determine

Cost of goods sold.

b.

Expert Solution
Check Mark

Explanation of Solution

Given,

Opening finished goods is $164,375.

Closing finished goods is $129,000.

Cost of goods manufactured is $35,375.

Formula to calculate the cost of the goods sold:

Costofgoodssold=(Openingbalnce+CostofgoodsmanufacturedClosingbalance)

Substitute $164,375 for the opening balance, $35,375 for the cost of goods manufacture and $129,000 for the closing balance,

Costofgoodssold=$164,375+$35,375$129,000=$70,750

Hence, cost of the goods sold is $70,750.

c.

To determine

Gross profit.

c.

Expert Solution
Check Mark

Explanation of Solution

Given,

Total sale is $3,275,000.

Cost of goods sold is $70,750.

Formula to calculate the gross profit:

Grossprofit=SalesCostofgoodssold

Substitute $3,275,000 for the sales and $70,750 for the cost of goods sold,

Grossprofit=$3,275,000$70,750=$3,204,250

Hence, gross profit is $3,204,250.

d.

To determine

Total operating expenses.

d.

Expert Solution
Check Mark

Explanation of Solution

Compute total operating expenses as follow:

Particulars Amount
($)
Advertisement expense 19,125
Depreciation expense: Office equipment 8,750
Depreciation expense: selling equipment 10,000
Depreciation expense: factory equipment 32,500
Indirect labor 60,000
Office salaries expense 100,875
Rent expense: Office space 21,125
Rent expense: factory space 25,750
Rent expense: factory building 79,875
Maintenance expense: factory equipment 27,875
Sales discount 57,500
Sales salaries expense 286,250
Total operating expense 729,625

Table (1)

Hence, total operating expense is $729,625.

e.

To determine

Net income or loss before tax.

e.

Expert Solution
Check Mark

Explanation of Solution

Calculated info,

The gross profit is $3,204,250.

The total amount of operating expense is $729,625.

Formula to calculate the net income or loss before tax:

Netincome=GrossprofitOperatingexpense

Substitute $3,204,250 for the gross profit and $729,625 for the operating expense,

Netincome=$3,204,250$729,625=$2,474,625

Hence, net income is $2,474,625.

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Chapter 14 Solutions

Financial and Managerial Accounting: Information for Decisions

Ch. 14 - Prob. 6DQCh. 14 - What product cost is both a prime cost and a...Ch. 14 - Prob. 8DQCh. 14 - Prob. 9DQCh. 14 - Prob. 10DQCh. 14 - Prob. 11DQCh. 14 - Prob. 12DQCh. 14 - Prob. 13DQCh. 14 - Prob. 14DQCh. 14 - Prob. 15DQCh. 14 - Prob. 16DQCh. 14 - Prob. 17DQCh. 14 - What are the three categories of manufacturing...Ch. 14 - List several examples of factory overhead.Ch. 14 - Prob. 20DQCh. 14 - Prob. 21DQCh. 14 - Prob. 22DQCh. 14 - Prob. 23DQCh. 14 - Prob. 24DQCh. 14 - Prob. 25DQCh. 14 - Prob. 1QSCh. 14 - Prob. 2QSCh. 14 - QS 14-4 Direct and indirect costs C2 Diez Company...Ch. 14 - Classifying product costs C2 Identify each of the...Ch. 14 - QS 14-6 Product and period costs C3 Identify each...Ch. 14 - Prob. 6QSCh. 14 - Prob. 7QSCh. 14 - Prob. 8QSCh. 14 - Prob. 9QSCh. 14 - Prob. 10QSCh. 14 - Prob. 11QSCh. 14 - Prob. 12QSCh. 14 - Prob. 13QSCh. 14 - Prob. 14QSCh. 14 - Exercise 14-1 Sources of accounting information C1...Ch. 14 - Prob. 2ECh. 14 - Exercise 14-3 Cost classifications for a service...Ch. 14 - Exercise 14-4 Cost classifications for a service...Ch. 14 - Prob. 5ECh. 14 - Prob. 6ECh. 14 - Prob. 7ECh. 14 - Prob. 8ECh. 14 - Prob. 9ECh. 14 - Prob. 10ECh. 14 - Prob. 11ECh. 14 - Prob. 12ECh. 14 - Prob. 13ECh. 14 - Prob. 14ECh. 14 - Prob. 15ECh. 14 - Prob. 16ECh. 14 - Exercise 14-17 Lean business practice C6 Many...Ch. 14 - Prob. 1PSACh. 14 - Prob. 2PSACh. 14 - Prob. 3PSACh. 14 - Prob. 4PSACh. 14 - Prob. 5PSACh. 14 - Prob. 1PSBCh. 14 - Prob. 2PSBCh. 14 - Prob. 3PSBCh. 14 - Prob. 4PSBCh. 14 - Prob. 5PSBCh. 14 - Prob. 14SPCh. 14 - Prob. 1BTNCh. 14 - Prob. 2BTNCh. 14 - Prob. 3BTNCh. 14 - Prob. 4BTNCh. 14 - Prob. 5BTNCh. 14 - Prob. 6BTNCh. 14 - Prob. 7BTNCh. 14 - Prob. 8BTNCh. 14 - Prob. 9BTN
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