Cornerstone Exercise 2.2 (Algorithmic) Cost of Goods Manufactured

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,000 units will be produced, with the following total costs:

Direct materials	?
Direct labor	$75,000
Variable overhead	25,000
Fixed overhead	225,000

Next year, Pietro expects to purchase $122,000 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:

	Direct materials Inventory	Work-in-Process Inventory
Beginning	$5,000	$12,300
Ending	$4,900	$14,300

Required:1. Prepare a statement of cost of goods manufactured.

2-2. What if the ending inventory of direct materials increased by $2,600? Indicate the affect that this would have on the items listed below:

Direction of change

Amount

Direct materials used

- Select your answer -no changeincreasedecreaseCorrect 1 of Item 2

by

$

Total manufacturing costs

- Select your answer -no changeincreasedecreaseCorrect 3 of Item 2

by

$

Cost of goods manufactured

- Select your answer -no changeincreasedecreaseCorrect 5 of Item 2

by

Cornerstone Exercise 2.3 (Algorithmic) Cost of Goods Sold

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 53,900 units will be produced, with the following total costs:

Direct materials	?
Direct labor	72,000
Variable overhead	30,000
Fixed overhead	245,000

Next year, Pietro expects to purchase $122,500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:

	Direct materials Inventory	Work-in-Process Inventory
Beginning	$5,000	$13,800
Ending	$4,900	$15,800

Pietro expects to produce 53,900 units and sell 53,200 units. Beginning inventory of finished goods is $43,500, and ending inventory of finished goods is expected to be $35,000.

1. Prepare a statement of cost of goods sold in good form.

2. What if the beginning inventory of finished goods decreased by $4,250? What would be the effect on the cost of goods sold? - Select your answer -increasedecreaseno changeCorrect 1 of Item 2 by $

Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 2.4 hours. On average, HHH completes about 24,000 cleanings per year. The following total costs are associated with the total cleanings:

Direct materials	$69,600
Direct labor	806,400
Variable overhead	31,200
Fixed overhead	36,000

Required:

If required, round your answers to the nearest cent.

1. Calculate the prime cost per cleaning. $ per cleaning

2. Calculate the conversion cost per cleaning. $ per cleaning

3. Calculate the total variable cost per cleaning. $ per cleaning

4. Calculate the total service cost per cleaning. $ per cleaning

5. What if rent on the office that Jean and Tom use to run HHH increased by $2,400? Which of the following statements best describes the effect of this on HHH's costs?

- Select your answer -Prime costs would increaseConversion costs per cleaning would increaseTotal service costs per cleaning would decreaseTotal variable costs would decreaseItem 5