Acct 2102 Chapter 1 Practice Probelms

ACCT 2102 CHAPTER 1 COST CONCEPTS PRACTICE PROBLEMS

1. Carreker Company manufactures cell phones. For next year, Carreker expects to produce 30,000 phones with the following total costs:

Direct materials Direct labor Manufacturing overhead

$154,300 $ 90,000 $480,000

The Company expects to purchase $147,900 of direct materials and sell 34,000 units next year. Information about the Company’s inventory accounts follows: Direct Materials Inventory $53,400 $47,000 Finished Goods Inventory $151,000 $45,000

Beginning Ending

WIP Inventory $75,000 $60,000

REQUIRED: a. Prepare a statement of cost of goods sold. b. If only 32,000 units were to be sold next year? Explain which lines of the statement of cost of goods sold would be affected and how. 2. Sodowsky Manufacturing, Inc. produces brightly colored clog-style shoes. Next year, Sodowsky plans to produce 150,000 units with the following total costs: Direct materials Direct labor Variable overhead Fixed overhead REQUIRED: a. b. c. d. Calculate the prime cost per unit. Calculate the conversion cost per unit. Calculate the total variable cost per unit. Calculate total manufacturing cost per unit. $300,000 $ 90,000 $ 45,000 $420,000

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ACCT 2102 CHAPTER 1 COST CONCEPTS PRACTICE PROBLEMS 3. For each of the following independent situations, calculate the missing values: a. Assume that $143,000 of direct materials was purchased during June. Beginning direct materials inventory was $9,000 and direct materials used in production were $110,000. What is ending direct materials inventory? b. Beginning WIP inventory was $20,000 and ending WIP was $18,750. If total manufacturing costs were $40,000, what was cost of goods manufactured? c. If conversion cost is $84 per unit, prime cost is $70, and manufacturing cost per unit is $120 what is the direct materials cost per unit? d. Total manufacturing costs for August were $446,900. Prime cost was $290,000 and beginning WIP was $160,000. The cost of goods...