Excel Applications for Accounting Principles
4th Edition
ISBN: 9781111581565
Author: Gaylord N. Smith
Publisher: Cengage Learning
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Textbook Question
Chapter 19, Problem 1R
The records of Anderjak Corporation contain the following information for the month of January:
The company has no beginning inventory.
REQUIREMENT
You have been asked to prepare a variable costing (direct costing) income statement and an absorption costing income statement for the month of January. Review the worksheet VARCOST that follows these requirements.
Expert Solution & Answer
To determine
Prepare a income statement for january by using variable costing and absorption costing method.
Explanation of Solution
Prepare a income statement using absorption costing:
Income statement | ||
Absorption costing | ||
Particulars | Amount ($) | Amount ($) |
Sales | $ 2,400,000 | |
Cost of goods sold: | ||
Beginning inventory cost | $ 266,875 | |
Variable manufacturing costs | 980,000 | |
Fixed manufacturing costs | 315,000 | |
Total goods available for sale | $ 1,561,875 | |
Less: ending inventory | 91,875 | |
Cost of goods sold | 1,470,000 | |
Gross profit | $ 930,000 | |
Selling expenses: | ||
Fixed selling expenses | $ 100,000 | |
Variable selling expenses | 160,000 | |
Total selling expenses | 260,000 | |
Operating income | $ 670,000 |
Table (1)
Prepare a income statement using variable costing:
Income statement | ||
Variable costing | ||
Particulars | Amount ($) | Amount ($) |
Sales | $ 2,400,000 | |
Cost of goods sold: | ||
Beginning inventory cost | $ 210,000 | |
Variable manufacturing costs | 980,000 | |
Total goods available for sale | $ 1,190,000 | |
Less: ending inventory | 70,000 | |
Variable cost of goods sold | 1,120,000 | |
Manufacturing margin | $ 1,280,000 | |
Variable selling expenses | 160,000 | |
Contribution margin | $ 1,120,000 | |
Fixed costs: | ||
Fixed manufacturing costs | $ 315,000 | |
Fixed selling expenses | 100,000 | |
Total fixed costs | $ 415,000 | |
Operating income | $ 705,000 |
Table (2)
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Gates Manufacturing reports based on an October 31 fiscal year. As a part of your interview for a cost analyst position, the interviewer provides you with the following information: Direct materials purchases Work-in-process inventory, November 1 Finished goods inventory, November 1 Finished goods inventory, October 31 Manufacturing overhead Cost of goods sold Direct labor Decrease in work-in-process inventory Average sales price per unit Gross margin percentage $ 96,000 53,000 30,800 31,800 57,600 Required: a. Find the cost of goods manufactured. b. Find the total manufacturing costs. c. Find the direct materials used. d. Find the sales revenue. e. Find the increase (decrease) in direct materials inventory. 221,000 30,400 28,000 20 ,35%
please please please solve all parts with all working if you can't solve all just skip/leave for other expert please do not waste my question with giving incomplete or incorrect answer thanks
The company uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost. The predetermined overhead rate was computed from the following data:
Total estimated factory overhead $2,400,000
Total estimated direct labour cost $2,000,000
The WIP account given below relates to the activities for the month of June:
WIP Inventory A/C
June 1 Balance b/f $15,000
Direct Materials Used 123,000
Additional data:
▪ Total material requisitioned ………………………………… $153,000
▪ Manufacturing Labour Costs incurred …………………. $163,500 (75% represents direct labour)
▪ Other manufacturing overheads incurred …………... $94,275
▪ Two jobs were completed with total costs of $183,000 and $105,000 respectively. They were sold on account at a margin of 33 1/3% on sales.
Compute the predetermined manufacturing overhead rate.
The company uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost. The predetermined overhead rate was computed from the following data:
Total estimated factory overhead $2,400,000
Total estimated direct labour cost $2,000,000
The WIP account given below relates to the activities for the month of June:
WIP Inventory A/C
June 1 Balance b/f $15,000
Direct Materials Used 123,000
Additional data:
▪ Total material requisitioned ………………………………… $153,000
▪ Manufacturing Labour Costs incurred …………………. $163,500 (75% represents direct labour)
▪ Other manufacturing overheads incurred …………... $94,275
▪ Two jobs were completed with total costs of $183,000 and $105,000 respectively. They were sold on account at a margin of 33 1/3% on sales.
State the journal entries necessary to record the following transactions in the general journal.
(i) Total materials issued to production
(ii)…
Chapter 19 Solutions
Excel Applications for Accounting Principles
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