Accounting Case Study

1.

| Product Costs | | |

Item | Direct Materials | | Direct Labor | | Manufacturing Overhead | | Period Costs |

RM | $70,000 | | | | | | |

Wages | | | $70,000 | | | | |

Depreciation-factory | | | | | $1,500 | | |

Insurance | | | | | 1,500 | | |

Miscellaneous Expense | | | | | 1,000 | | |

Property Taxes | | | | | 400 | | |

Rent | | | | | 6,000 | | |

Utilities | | | | | 900 | | |

Administrative Costs | | | | | | | $15,500 |

Advertising | | | | | | | 11,000 |

Depreciation-office | | | | | | | 800 |

Office expense | | | | | | | 300 |

Professional Fees | | | | | | | 500 |

Research | | | | | | | 10,000 |

Sales commissions |   | |   | |   | | 40,000 |

| $70,000 | | $70,000 | | $11,300 | | $78,100 |

2.

Item | | Variable | | Fixed |

RM | | $70,000 | | |

Wages | | 70,000 | | |

Depreciation-factory | | | | $1,500 |

Insurance | | | | 1,500 |

Miscellaneous Expense | | 1,000 | | |

Property Taxes | | | | 400 |

Rent | | | | 6,000 |

Utilities | | | | 900 |

Administrative Costs | | | | 15,500 |

Advertising | | | | 11,000 |

Depreciation-office | | | | 800 |

Office expense | | | | 300 |

Professional Fees | | | | 500 |

Research | | | | 10,000 |

Sales commissions | | 40,000 | |   |

Total | | $181,00 | | $48,400 |

Armstrong Helmet Company |

COGM Schedule |

For the Month Ended December 31, 2011 |

WIP December 1 | | | $0 |

DM Used | | 70,000 | |

DL | | 70,000 | |

MOH | | | |

Rent | 6,000 | | |

Depreciation | 1,500 | | |

Insurance | 1,500 | | |

Miscellaneous | 1,000 | | |

Utilities | 900 | | |

Property Taxes | 400 | | |

Total MOH | | 11,300 | |

Total Costs | | | 151,300 |

Less: WIP December 31 | | | 0 |

COGM | | | $151,300 |

| | | |

3.

4. 151,30010,000 = $15.31 per...