Managerial Accounting
7th Edition
ISBN: 9781260247886
Author: Wild
Publisher: MCG
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Chapter C, Problem 3QS
To determine
Lean Business Model:
Lean Business Model is a strategic approach to business where the thrust is on eliminating wastes from the processes and products of the business without compromising on the satisfaction of customer needs.
Purchase of Raw Material:
In Lean business model the production happens only when there is a customer order, thus keeping minimal or no inventory at all. Further, the raw materials are ordered only when the production is about to happen thus keeping no inventory and directly introducing the raw material to Work-In-Process.
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Exercise 2: Flow of Cost - Cost System
You are required to compute for the unknowns in the following accounts:
Materials
Inventory
7,950
Purchase Returns
750
Purchases
27,500
Direct Materials
?
Indirect Materials
(e)
Inventory, end
5,100
Work in Process
Inventory
13,650
Cost of Goods Sold Completed
(c)
Direct Materials Cost
23,500
Direct Labor Cost
(a)
Factory Overhead Applied (100% of direct labor cost)
(b)
Inventory
11,750
62,150
Finished Goods
Inventory
12,500
Cost of Goods Sold
(d)
Cost of Goods Sold Completed
?
Inventory, end
11,250
Indicate the missing amount for each letter.
Case
1
2
Direct materials used
$9,790
$
(g)
Direct labor
6,000
9,000
Manufacturing overhead
8,780
4,530
Total manufacturing costs
(a)
16,330
Beginning work in process inventory
1,660
(h)
Ending work in process inventory
(b)
3,980
Sales revenue
25,890
(i)
Sales discounts
2,990
1,790
Cost of goods manufactured
17,270
23,050
Beginning finished goods inventory
(c)
4,050
Goods available for sale
22,180
(j)
Cost of goods sold
(d)
(k)
Ending finished goods inventory
4,020
2,810
Gross profit
(e)
7,800
Operating expenses
3,170
(l)
Net income
(f)
5,240
Prepare a condensed cost of goods manufactured schedule for Case 1.
CASE 1Cost of Goods Manufactured Schedule
Cost of Goods ManufacturedDirect LaborDirect…
Question 1.
Case 2. Book problem. Incomplete manufacturing costs, expenses and selling data for two different cases are shown below:
Required:
1. Indicate the missing amount for each letter
2. Prepare a schedule of cost of goods manufactured
3. Prepare a schedule of cost of goods sold
4. Prepare an income statement (Optional)
Case 1
Case 2
Raw materials used
9,600
g)
Direct labor cost
5,000
8,000
Total Factory overhead
8,000
4,000
Total Manufacturing costs
a)
16,000
Beginning work in process inventory
1,000
h)
Ending work in process inventory
b)
3,000
Sales revenue
24,500
i)…
Chapter C Solutions
Managerial Accounting
Ch. C - Prob. 1DQCh. C - How does push production differ from pull...Ch. C - Prob. 3DQCh. C - Prob. 4DQCh. C - Prob. 5DQCh. C - Prob. 6DQCh. C - Prob. 7DQCh. C - Prob. 8DQCh. C - Prob. 9DQCh. C - Prob. 10DQ
Ch. C - Prob. 11DQCh. C - Prob. 12DQCh. C - Can management of a company like Samsung use cycle...Ch. C - Identify each of the following as applying more to...Ch. C - Identify each of the following as applying more to...Ch. C - Prob. 3QSCh. C - Use lean accounting to prepare journal entries for...Ch. C - Prob. 5QSCh. C - Prob. 6QSCh. C - Prob. 7QSCh. C - Prob. 8QSCh. C - Prob. 9QSCh. C - Prob. 10QSCh. C - Prob. 11QSCh. C - A company reports ending accounts payable of...Ch. C - Prob. 13QSCh. C - Identify each of the following production...Ch. C - Prob. 2ECh. C - Prob. 3ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Prob. 6ECh. C - Prob. 7ECh. C - A manufacturer makes T-shirts in several...Ch. C - Prob. 9ECh. C - Prob. 10ECh. C - Use the information below for Tesla to answer the...Ch. C - Prob. 12ECh. C - Prob. 13ECh. C - Prob. 14ECh. C - Robo-Lawn is a lean manufacturer of robotic lawn...Ch. C - Prob. 2PCh. C - Prob. 3P
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- Problem 1.b.: Computation of Costs of Goods Manufactured (COGM).Akari Inc. provided the following information for its work-in-process inventory account at the end of the current month.Work-in-process Inventory (WIP)Accounts $ Accounts $Beginning balance $19,500 COGM ?Direct materials (DM) $76,200Direct labor (DL) $120,000MOH allocated $72,000Ending Balance $24,300Required: Compute the Costs of Goods Manufactured (COGM) at the end of the current month.Solution: Formula:Beginning WIP+ TMC (total manufacturing costs) for the periodDM usedDL incurredMOH allocatedTMC in WIP- Ending WIP= COGMarrow_forwardProblem 1.a.: Computation of Direct Material Used.Akari Inc. provided the following information for its raw material inventory account at the end of the current month:Raw Materials (RM) InventoryAccounts $ Accounts $Beginning balance $22,600 Direct materials (DM) used ?Purchase $88,400 Indirect materials used $7,600Ending Balance $27,200Required: Compute the missing information for the direct materials used during the current month.Solution: Formula: Beginning RM+ RM Purchased= Total RM available for use- Ending RM= RM used- Indirect material used= DM usedarrow_forward1. Supply the missing data in the following cases, each case is independent of the others. Schedule of Cost of Goods ManufacturedDirect materials . . . . . . . . . . . . . . . . . . . . . .P 4,500Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . ?Manufacturing overhead . . . . . . . . . . . . . . . 5,000Total manufacturing costs . . . . . . . . . . . . . . 18,500Beginning work in process inventory . . . . . 2,500Ending work in process inventory . . . . . . . . ?Cost of goods manufactured . . . . . . . . . . . 18,000 Income StatementSales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 30,000Beginning finished goods inventory . . . . . 1,000Cost of goods manufactured . . . . . . . . . . . 18,000Goods available for sale . . . . . . . . . . . . . . . ?Ending finished goods inventory . . . . . . . . ?Cost of goods sold . . . . . . . . . . . . . . . . . . . . 17,000Gross margin . . . . . . . . . . . . . . . . . . . . . . . . 13,000Selling and administrative…arrow_forward
- Problem 2. Statement of Costs of Goods Manufactured and Income statement. The following information are gathered from the accounting records of Genet Inc. for the current month: Inventory information Beginning balance $ Ending balance $ Raw materials inventory $46,800 $43,600 Work-in-Process inventory $33,400 $35,700 Finished goods inventory $42,500 $31,800 Other information $ Revenue $800,000 Purchase of raw materials $72,100 Indirect materials costs $5,600 Indirect labor costs $20,000 Office staff salaries $28,000 Office equipment depreciation $2,000 Factory machinery maintenance costs $5,000 Environmental compliance costs - factory $1,200 Direct labor - Wages of production line workers $32,000 Sales staff salaries $12,000 Advertising costs $8,000 Miscellaneous manufacturing overhead costs $11,000 Required: a.…arrow_forwardProblem 1.a.: Computation of Direct Material Used. Akari Inc. provided the following information for its raw material inventory account at the end of the current month: Raw Materials (RM) Inventory Accounts $ Accounts $ Beginning balance $22,600 Direct materials (DM) used ? Purchase $88,400 Indirect materials used $7,600 Ending Balance $27,200 Required: Compute the missing information for the direct materials used during the current month. Solution: Formula: Beginning RM + RM Purchased = Total RM available for use - Ending RM = RM used - Indirect material used = DM usedarrow_forwardS1: When raw materials are requisitioned and placed into production, the Raw Materials Inventory account is debited.S2: Over-applied overhead that is material in amount is closed to the Cost of Sales account at year-end. Group of answer choices False; True False; False True; True True; Falsearrow_forward
- Account Dollar amount Beginning Materials Inventory $74,323 Purchases ? Materials available for use 151,644 Ending inventory ? Materials used in production 78,413 Work In Process Inventory Beginning inventory 253,210 Materials used in production ? Direct labor 125,900 Overhead applied 94,425 Manufacturing costs incurred ? Ending inventory 242,932 Cost of goods manufactured ? Finished Goods Inventory Beginning inventory 333,149 Cost of goods manufactured ? Goods available for sale ? Ending inventory 354,235 Cost of goods sold ? Prepare the journal entries to record the following events: The purchase of materials The completion of work in process The sale of finished goods (omit the revenue side of the sale)arrow_forwardSubject: Cost management & accounting QUESTION – 6**Following information relates to commodity ‘ A ‘ of a manufacturing concern for their one month operations:Stock of Materials- Ending Rs. 31,400 Stock of Materials- Beg. Rs. 24,000Material purchases 92,500 Carriage and Cartage Outward 2,150Carriage and Cartage Inward 3,575 Drawing office Salaries 3,250Counting House Salaries 6,300 Cash Discount Allowed 1,450Bad Debts written off 3,250 Repair of Plant 2,225Rent, Rates & Maintenance-Factory 4,250 Sales 230,500Rent, Rates, & Maintenance-Office 1,000 Travelling Expenses 1,050Traveller Salaries & Commission 3,850 Production Wages 63,000Depreciation- Machinery 3,250 Depreciation- Office Furniture 150Director’s Fee 3,000 Energy and Gas – Factory 600Managers Salary (¾ Factory- ¼ Office) 5,000 Energy and Gas – Office 200General Expenses –…arrow_forwardComplete the information in the cost computations shown here: Raw materials Beginning inventory $342 Purchases 1,534 Materials available for use $fill in the blank 1 Ending inventory 320 Materials used in production $fill in the blank 2 Work in process inventory Beginning inventory $933 Materials used in production fill in the blank 3 Direct labor 1,533 Overhead applied fill in the blank 4 Manufacturing costs incurred $22,418 Ending inventory 933 Cost of goods manufactured $fill in the blank 5 Finished goods inventory Beginning inventory $fill in the blank 6 Cost of goods manufactured fill in the blank 7 Goods available for sale $24,982 Ending inventory fill in the blank 8 Cost of goods sold $21,769arrow_forward
- Use lean accounting to prepare the journal entry to record the purchase of $28,000 of raw materials on credit.arrow_forwardQuestion Content Area Selected accounts with a credit amount omitted are as follows Work in Process Apr. 1 Balance 7,100 Apr. 30 Goods finished X 30 Direct materials 63,000 30 Direct labor 192,400 30 Factory overhead 57,720 Finished Goods Apr. 1 Balance 12,700 30 Goods finished 303,900 What was the balance of Work in Process as of April 30? a.$12,700 b.$16,320 c.$57,720 d.$303,900arrow_forwardComplete the information in the cost computations shown here: Raw materials Beginning inventory $341 Purchases 1,535 Materials available for use 1,876 Ending inventory 323 Materials used in production 1,553 Work in process inventory Beginning inventory $931 Materials used in production fill in the blank 3 Direct labor 1,534 Overhead applied fill in the blank 4 Manufacturing costs incurred $22,426 Ending inventory 933 Cost of goods manufactured 21,493 Finished goods inventory Beginning inventory $fill in the blank 6 Cost of goods manufactured fill in the blank 7 Goods available for sale $24,990 Ending inventory fill in the blank 8 Cost of goods sold $21,774 My answer in boldarrow_forward
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