Cost Accounting Chapters 1-5

Millworks Company manufactured 100,000 units in 2018 and reported the following costs: Sandpaprer $32,000, Leasing costs- plant $384,000, Materials handling 320,000, Depreciation- equipment 224,000, Coolants and lubricants 22,400, Property taxes- equipment 32,000, Indirect manufacturing labor 275,200, Fire insurance- equipment 16,000, Direct manufacturing labor 2,176.000, Direct materials purchases 3,140,000, Direct materials 1/1/19 348,000, Direct materials 12/31/19 280,000, Finished goods 1/1/19 672,000, Sales revenue 12.800,000, Finished goods 12/31/19 1,280,000, Sales commissions 640,000, Work-in-process 1/1/19 96,000, Sales salaries 576,000, Work in process 12/31/19 64,000, Advertising costs 480,000, Administration costs 800,000 What manufacturing costs were added to WIP in 2019?

$3,208,000 + $2,176,000 + $32,000 + $320,000 + $22,400 + $275,200 + $384,000 + $224,000 + $32,000 + $16,000 = $6,689,600

Revenue $450,000 Beginning inventory of direct materials, January 1, 2015 30,000 Purchases of direct materials 153,000 Ending inventory of direct materials, December 31, 2015 18,000 Direct manufacturing labor 26,000 Indirect manufacturing costs 42,000 Beginning inventory of finished goods, January 1, 2015 47,000 Cost of goods manufactured 233,000 Ending inventory of finished goods, December 31, 2015 41,000 Operating costs 157,000 What is All Rite's gross margin (or gross profit)?

$450,000 − ($47,000 + $233,000 − $41,000) = $211,000

Revenue $460,000 Beginning inventory of direct materials, January 1, 2015 26,000 Purchases of direct materials 156,000 Ending inventory of direct materials, December 31, 2015 14,000 Direct manufacturing labor 30,000 Indirect manufacturing costs 41,000 Beginning inventory of finished goods, January 1, 2015 46,000 Cost of goods manufactured 239,000 Ending inventory of finished goods, December 31, 2015 45,000 Operating costs 150,000 What is Leslie's cost of goods sold?

$46,000 + $239,000 − $45,000 = $240,000

Tangiers Inc currently produces 2,000 children's whistles per month. The following per unit data apply for sales to regular customers and is based on 1,000 units produced. Direct materials $200, Direct manufacturing labor 40, Variable manufacturing overhead 70, Fixed manufacturing overhead 50, Total manufacturing costs $360, Additional information: The plant has capacity for 3,000 whistles. The plant supervisor's salary is $15,000 annually. What is the cost per unit when producing 1,600 whistles?

$546,000 / 1,600 whistles = $341.25

Millworks Company manufactured 100,000 units in 2018 and reported the following costs: Sandpaprer $32,000, Leasing costs- plant $384,000, Materials handling 320,000, Depreciation- equipment 224,000, Coolants and lubricants 22,400, Property taxes- equipment 32,000, Indirect manufacturing labor 275,200, Fire insurance- equipment 16,000, Direct manufacturing labor 2,176.000, Direct materials purchases 3,140,000, Direct materials 1/1/19 348,000, Direct materials 12/31/19 280,000, Finished goods 1/1/19 672,000, Sales revenue 12.800,000, Finished goods 12/31/19 1,280,000, Sales commissions 640,000, Work-in-process 1/1/19 96,000, Sales salaries 576,000, Work in process 12/31/19 64,000, Advertising costs 480,000, Administration costs 800,000 What is cost of goods manufactured for 2019?

$6,689,600 + $96,000 - $64,000 = $6,721,600

Millworks Company manufactured 100,000 units in 2018 and reported the following costs: Sandpaprer $32,000 Leasing costs- plant $384,000 Materials handling 320,000 Depreciation- equipment 224,000 Coolants and lubricants 22,400 Property taxes- equipment 32,000 Indirect manufacturing labor 275,200 Fire insurance- equipment 16,000 Direct manufacturing labor 2,176.000 Direct materials purchases 3,140,000 Direct materials 1/1/19 348,000 Direct materials 12/31/19 280,000 Finished goods 1/1/19 672,000 Sales revenue 12.800,000 Finished goods 12/31/19 1,280,000 Sales commissions 640,000 Work-in-process 1/1/19 96,000 Sales salaries 576,000 Work in process 12/31/19 64,000 Advertising costs 480,000 Administration costs 800,000 What is cost of goods sold for 2019?

$6,721,600 + $672,000 - $1,280,000 = $6,113,600

quantity of units needed to be sold

(fixed costs + target operating income)/contribution margin per unit

Pederson Company reported the following: Manufacturing costs $1,750,000 Units manufactured 50,000 Units sold 45,000 units sold for $70 per unit Beginning inventory 0 units What is the amount of gross profit margin?

45,000 × ($70 - ($1,750,000 / 50,000)) = $1,575,000

actual indirect cost rate

Actual Indirect Costs / Actual Direct Labor Hours

budgeted indirect cost rate

Budgeted Indirect Costs / Budgeted Direct Labor Hours

Contribution Margin Ratio

Contribution Margin / Sales

Conversion Cost

Direct Labor + Manufacturing Overhead

Prime Cost

Direct Materials + Direct Labor

Contribution Margin

Sales - Variable Costs

contribution margin per unit

Selling price - variable cost per unit

Tangiers Inc currently produces 2,000 children's whistles per month. The following per unit data apply for sales to regular customers and is based on 1,000 units produced. Direct materials $200, Direct manufacturing labor 40, Variable manufacturing overhead 70, Fixed manufacturing overhead 50, Total manufacturing costs $360, Additional information: The plant has capacity for 3,000 whistles. The plant supervisor's salary is $15,000 annually. What is the total cost of producing 1,600 whistles?

Variable costs ($200 + $40 + $70) = $310 * 1,600 units produced = $496,000 Fixed costs ($50 * 1,000 units produced) = $50,000 (within the relevant range the fixed costs remain the same) Total cost = $496,000 + $50,000 = $546,000

Tangiers Inc currently produces 2,000 children's whistles per month. The following per unit data apply for sales to regular customers and is based on 1,000 units produced. Direct materials $200, Direct manufacturing labor 40, Variable manufacturing overhead 70, Fixed manufacturing overhead 50, Total manufacturing costs $360, Additional information: The plant has capacity for 3,000 whistles. The plant supervisor's salary is $15,000 annually. What is the total cost of producing 2,000 whistles?

Variable costs ($200 + $40 + $70) = $310 * 2,000 units produced = $620,000 Fixed costs ($50 * 1,000 units produced) = $50,000 Total cost = $620,000 + $50,000 = $670,000

indirect costs (actual costing)

actual indirect cost rate * actual direct labor hours

under/over allocated

actual moh - allocated moh

indirect costs (normal costing)

budgeted indirect cost rate * actual direct labor hours

Overhead Allocation Rate

budgeted moh/ budgeted cost allocation base

Operating Income

contribution margin - fixed costs

Breakeven in dollars

fixed costs / contribution margin ratio

Breakeven number of units

fixed costs/contribution margin per unit

target operating income

target net income / (1-tax rate)

unit cost

total cost/number of units produced