I. Gala Company is a manufacturer of laptop computers. Various costs and expenses associated with its operations are as follows.
1. Property taxes on the factory building,
2. Production superintendents' salaries.
3. Memory hoards and chips used in assembling computers.
4. Depreciation on the factory equipment,
5. Salaries for assembly-line quality control inspectors.
6. Sales commissions paid to sell laptop computers.
7. Electrical components used in assembling computers.
8. Wages of workers assembling laptop computers.
9. Soldering materials used on factory assembly lines.
10. Salaries for the night security guards for the factory building.
The company intends to classify these costs and expenses into the following categories: (a) direct materials, (b) direct labor, (c) manufacturing overhead, and (d) period costs.
Instructions
List the items (1) through (10). For each item, indicate the cost category to which it belon&s.
II. An incomplete cost of goods manufactured schedule is presented below.
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HOBBIT COMPANY
Cost of Goods Manufactured Schedule
For the Year Ended December 31, 2017
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Work in process (1/1)
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$210,000
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Direct materials
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|
|
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Raw materials inventory(1/1)
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$ ?
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|
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Add: Raw materials purchase
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158,000
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Total raw materials available for use
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?
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Less: Raw materials inventory (12/31)
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22,500
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Direct materials used
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$180.000
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Direct labor
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|
?
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Manufacturing overhead
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|
|
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Indirect labor
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18,000
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|
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Factory deprcci.ation
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36,000
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|
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'Factory utilities
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68,000
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|
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Total overhead
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122.000
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Total manufacturing costs
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?
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Total cost of work in process
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?
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Less: Work in process (11/31)
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81,000
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Cost of goods manufactured
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$540,000
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Instructions
Complete the cost of goods manufactured schedule for Hobbit Company.
III. Manufacturing cost data for Copa Company are presented below
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Case A
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Case B
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Case C
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Direct materials used
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$ (a)
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$68,400
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$130,000
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Direct labor
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57,000
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86,000
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(g)
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Manufacturing overhead
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46,500
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81,600
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102,000
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Total manufacturing costs
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195,650
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(d)
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253,700
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Work in process 111/17
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(b)
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16,500
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(h)
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Total cost of work in proems
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221,500
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(e)
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337,000
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Work in process 12131/17
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(c)
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11,000
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70,000
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Cost of goods manufactured
|
185,275
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(f)
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(I)
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Instructions
Indicate the missing amount for each letter (a) through (i).
IV. Bell Company, a manufacturer of audio systems, started its, production in October. 2017. For the preceding years, Bell had had a retailer of audio systems, After a thorough survey of audio system markets, Bell decided to turn its retail store into an audio equipment factory.
Raw materials Omit far an audio system will total $74 per unit. Workers on the production lines are on average paid S 12 per hour. An audio system usually takes 5 hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $4,900 per month. Indirect materials cost $5 per system. A supervisor was hired to oversee production; her monthly salary is $3.000.
Factory janitorial costs are $1,300 monthly. Advertising costs For the audio system will be $9,500 per month. The factory building depreciation expense is $7,800 per year. Prop¬erty taxes on the Factory building will be $9,000 per year.
Instructions
(a) Prepare an answer sheet with the following column headings.
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Product Costs
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Cost
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Direct
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Direct
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Manufacturing
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Period
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Item
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Materials
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Labor
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Overhead
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Costs
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Assuming that Bell manufactures, on average, 1,500 audio systems per month, cuter each cost item on your answer sheet, placing the dollar amount per month under the appropriate headings. Total the dollar amount in each of the columns.
(b) Compute the cost to produce one audio system.