Cost Accounting Homework Solution

2-36

Income statement and schedule of cost of goods manufactured. Calendar Corporation Income Statement for the Year Ended December 31, 2011 (in millions)

Revenues Cost of goods sold Beginning finished goods, Jan. 1, 2011 Cost of goods manufactured (below) Cost of goods available for sale Ending finished goods, Dec. 31, 2011 Gross margin Marketing, distribution, and customer-service costs Operating income (loss)

$355 $ 47 228 275 11

264 91 94 $ (3)

Calendar Corporation Schedule of Cost of Goods Manufactured for the Year Ended December 31, 2011 (in millions) Direct material costs Beginning inventory, Jan. 1, 2011 Direct materials purchased Cost of direct materials available for use Ending inventory, Dec. 31, 2011 Direct materials used Direct manufacturing labor costs Indirect manufacturing costs Plant supplies used Property taxes on plant Plant utilities Indirect manufacturing labor costs Depreciation––plant and equipment Miscellaneous manufacturing overhead costs Manufacturing costs incurred during 2011 Add beginning work-in-process inventory, Jan. 1, 2011 Total manufacturing costs to account for Deduct ending work-in-process inventory, Dec. 31, 2011 Cost of goods manufactured (to income statement)

$ 32 84 116 8 $108 42 4 2 9 27 6 15

63 213 18 231 3 $228

2-37 1.

Terminology, interpretation of statements (continuation of 2-34). Direct materials used Direct manufacturing labor costs Prime costs Direct manufacturing labor costs Indirect manufacturing costs Conversion costs $108 million 42 million $150 million $ 42 million 63 million $105 million

2.

Inventoriable costs (in millions) for Year 2011 Plant utilities Indirect manufacturing labor Depreciation—plant and equipment Miscellaneous manufacturing overhead Direct materials used Direct manufacturing labor Plant supplies used Property tax on plant Total inventoriable costs Period costs (in millions) for Year 2011 Marketing, distribution, and customer-service costs

$

9 27 6 15...