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Thursday, February 14, 2013

Acct 505 Case Study 1

Acct. 505 Managerial Accounting

Case Study I Solution
Week 1
The pursuit cost items are needed before a chronicle of cost of goods manufactured can be prepared:
Materials utilize in production:
Prime salutes
slight aspire project Cost
Direct Materials Cost

$
$
$

545,000
220,000
325,000

Manufacturing Overhead Cost:
Direct Labor Cost/ Percentage of Conversion Cost:
rounded to nearest dollar
century%-65% = 35%
Conversion Cost
Less Direct Labor Cost
Manufacturing Overhead

$
$
$

628,500
220,000
408,500

( this is nitty-gritty conversion

100.00%
35.00%
65.00%

Cost of Goods Manufactured:
Cost of Goods Available for Sale
Less: end goods inventory, beginning
Cost of Goods Manufactured

$ 1,020,000
35,000
$
985,000

The easiest way to proceed from this point is to place all in all of the amounts that are known in a partially
completed archive of cost of goods manufactured and a partially completed income statement. Then
demand in the missing amounts by analyzing the available data.

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Cost of Goods Manufactured
Direct Materials:
Raw Materials Inventory, beginning
lend: Purchases of Raw Materials
Raw Materials Available for use
set forth: Raw Materials inventory, ending
Raw Materials Used in Production ( jaw above)
Direct Labor Cost
Manufacturing Overhead Cost (See Above)

$

$

$41,000
$325,000
$366,000
41,000
$325,000
$220,000
408,500

Total Manufacturing Costs
Add: Work in Process inventory, beginning

$953,500
$56,000

Deduct: Work in Process inventory, ending
Cost of Goods Manufactured

$1,009,500
$24,500
$985,000

Therefore, A is Raw Materials Available for Use
Less: Raw Materials Used in Production
Raw Materials Inventory, Ending

$
$

366,000
(325,000)
41,000

Therefore B is
Work in Process Ending

$24,500

Sales
$1,350,000
Cost of Goods Sold:
undone Goods Inventory, Beginning
$35,000
Cost of Goods Manufactured
$
985,000
Cost of Goods Available for Sale
$
1,020,000
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