Managerial Accounting Solutions of Problem 2-14 at the introduction of structure.Previous three part of chapter we had disused on different theoretical matter, after full discussion of managerial accounting solutions we try to solve mathematical problem. Lets go to interesting work:
09. Problem-2-14
Name of the Cost Variable Fixed Product cost Period Opp. Sunk
Cost Cost Direct Direct Mfg, (selling& cost cost
mat. labor O/H adm.cost)
Rental revenue
Foregone,$30,000
Per year X
Direct materials cost,
$ 80 per unit X X
Rental cost o
Warehouse , $500
Per month X X
Rental cost of
Equipment, $
4000 per month X X
Direct labor cost ,
$60 per unit X X
Depreciation of
annex space ,
$8000 per year X X X
Advertising cost ,
$50000 per year X X
Supervisors salary,
$1500 per month X X
Electricity for
machines,$120
per unit X X
Shipping cost ,
$9 per unit X X
Return earned on
investment , $3000
per year X
10. Problem;2-20
Cost Item Cost Behavior Units of Product
Variable Fixed Direct Indirect
1. Electricity used in operating
machines …………………. X X
2. Rent on a factory building … X X
3. Cloth used in drapery production X X
4. Production superintendents salary X X
5. Wages of labors assembling a product X X
6. Depreciation air purification equipment
used in furniture production ………. X X
7. Janitorial salaries …………………… X X
8. Peaches used in canning fruit……….. X X
9.Lubricants needed for machines ……. X X
10. Suger used in soft drink production … X X
11. Property taxes on the factory ………. X X
12. Wages of workers painting a product … X X
13. Depreciation of cafeteria equipment X X
14. Insurance on a building used in
producing TV sets ……………….. X X
15.Picture tubes used in TV sets ……… X X
Format of Schedule of Cost of Goods Manufacturer
Particulars | $ | $ |
Materials: Raw Materials Inventory (Opening)-------- Add Purchase of Raw Materials------------ Raw Materials available---------------------- Less Raw Materials Inventory (Closing) -- Raw Materials used or consumed------------ Direct Labor--------------------------------------- Manufacturing Overhead: Rent on facilities ---------------------- Insurance ------------------------------- Utilities cost --------------------------- Indirect Labor --------------------------------- Depreciation (Factory Equipment) --------- Maintenance (Factory)----------------------- Others if any ---------------------------------- Total Maintenance Costs Add Work in Process (Opening) --------------- Less Work in Process (Closing)-------------- Cost of Goods Manufactured | ||
Managerial Accounting Solutions
Format of Income Statement
Particulars | $ | $ |
Sales ----------------------------------------------- Less Cost of Goods sold: Finished Goods Inventory (Opening)------ Add Cost of Goods Manufactured----------- | ||
Goods Available for Sale--------------------- Less Finished Goods Inventory (Closing) | ||
Gross Margin Less Operating Expenses (Office & Admin & selling & Distribution Exp.): Selling & Administrative Expenses -------- Rent on Facilities ------- ---------------------- Insurance -------- ------------------------------ Depreciation (Sales Equipment) ------------ Utilities Costs ------- -------------------------- Advertising ------------------------------------- Others if any ----------------------------------- | ||
Net Operating Income (N.O.I) |
Problem 2.20 (P.-82):Managerial Accounting Solutions
Skyler Company
Schedule of Cost of Goods Manufacturer for the month ended June
Particulars | $ | $ |
Materials: Raw Materials Inventory (June-01)-------- Add Purchase of Raw Materials------------ Raw Materials available--------------------- Less Raw Materials Inventory (June-30) - Raw Materials used or consumed------------ Direct Labor--------------------------------------- Manufacturing Overhead: Rent on facilities (80%) --------------------- Insurance (75%) ------------------------------ Utilities cost (90%) -------------------------- Indirect Labor -------------------------------- Depreciation (Factory Equipment) -------- Maintenance (Factory)----------------------- Total Maintenance Costs Add Work in Process (June-01) --------------- Less Work in Process (June-30)-------------- Cost of Goods Manufactured | 17,000/= 1,90,000/= | |
2,07,000/= 42,000/= | ||
32,000/= 6,000/= 45,000/= 1,08,000/= 12,000/= 7,000/= | 1,65,000/= 90,000/= 2,10,000/= | |
4,65,000/= 70,000/= | ||
5,35,000/= 85,000/= | ||
4,50,000/= |
Income Statement for the month ended June
Particulars | $ | $ |
Sales ----------------------------------------------- Less Cost of Goods sold: Finished Goods Inventory (June – 01)------ Add Cost of Goods Manufactured---------- | 20,000/= 4,50,000/= | 6,00,000/= |
Goods Available for Sale--------------------- Less Finished Goods Inventory (June –30) | 4,70,000/= 60,000/= | 4,10,000/= |
Gross Margin Less Operating Expenses: Selling & Administrative Expenses -------- Rent on Facilities (20%) --------------------- Insurance (25%) ------------------------------- Depreciation (Sales Equipment) ------------ Utilities Costs (10%) ------------------------- Advertising ------------------------------------ | 35,000/= 8,000/= 2,000/= 10,000/= 5,000/= 80,000/= | 1,90,000/= 1,40,000/= |
Net Operating Income (N.O.I) | 50,000/= |
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