MANUFACTURING COST FLOWS, STATEMENTS AND SCHEDULES (22 PTS)

Respond in a color other than black. Each numbered example is independent. A helpful document to use for this assignment is the Excel doc Inventory Accts, and also the outline/frameworks of Cost of Goods Manufactured, Cost of Goods Sold, and the Income Statement

1. Given these two t-accounts, answer the 5 questions a-e. Show work.

RAW MATERIALS INVENTORY	WORK IN PROCESS INVENTORY
Beg Bal $10,000		Beg Bal $9,000
		Jan 10 ??? Raw Mat requisitioned
Jan 9 8,000	Jan 10 ??? Requis?d into production	Jan 12 Direct Labor 4,000	??? To Finished Goods
		Jan 28 Applied MOH 2,000
End Bal $16,000		End Bal $3,000

a. What is the dollar amount of the raw materials requisitioned into production in Jan 10?

b. What is the dollar amount of completed inventory transferred from WIP to Finished Goods?

c. If manufacturing overhead is applied based on direct labor cost, what is the predetermined overhead rate? Include both the dollar amount and the cost driver in your response.

d. What is the dollar amount of cost of goods manufactured?

e. Why can?t underapplied or overapplied overhead be calculated from the above?

2. Show work. Given the following costs, determine Cost of Goods Manufactured. Prepare a scratch schedule of Cost of Goods Manufactured to determine your response. Good form is not required. Not all of the information provided is used to determine Cost of Goods Manufactured.

Type of Inventory	Beginning Bal	End Bal
Raw Materials	$5	$4
Work in Process	$3	$6
Finished Goods	$10	$25

Raw Materials purchased during the period, $3

Direct Labor costs = $12

Applied Manufacturing Overhead = $7

Actual Manufacturing Overhead = $8

3. Given the following costs, determine Cost of Goods Sold, adjusted for underapplied or overapplied overhead. Prepare a scratch schedule of Cost of Goods Sold to determine your response. Good form is not required. Not all of the information provided is used to determine Cost of Goods Sold.

Type of Inventory	Beginning Bal	End Bal
Raw Materials	$5	$4
Work in Process	$3	$6
Finished Goods	$10	$25

Applied Manufacturing Overhead = $7

Actual Manufacturing Overhead = $8

Cost of Goods Manufactured = $15

4. Given the following costs, determine Cost of Goods Manufactured. You may wish to prepare a scratch schedule of Cost of Goods Sold to help you calculated Cost of Goods Manufactured. Good form is not required. Not all of the information provided will be used.

Type of Inventory	Beginning Bal	End Bal
Raw Materials	$5	$4
Work in Process	$3	$6
Finished Goods	$10	$25

Cost of Goods Sold (before any adjustment) = $14

5. Show work. Given the following Finished Goods Inventory t-account and a portion of the income statement, determine underapplied or overapplied manufacturing overhead.

FINISHED GOODS INVENTORY	Sales	100
Beg Bal $30		Less Cost of Goods Sold	62
transferred from WIP 55		Gross Margin	38
	Completed Goods transferred out
	?????
Ending Balance $ 20 How inventory Flows through a Job Order Cost System, Along with the Conversion Costs. T-Account Demonstration Because all three inventory accounts are assets, the debit credit rules are: increase on the left/debit side and decrease on the right/credit side. Defintion: "Building blocks" of the product Partially completed product. Still in progress. Completed Product. "On the shelves or in Initial inputs, Product's made of this Still being manufactured the showroom." Ready for sale to customer Examples: Nuts for Snickers Bar Snickers Bar prior to wrapping Case of 144 Snickers, ready for shipment Metal for Cadilac Cadilac without doors or engine Cadilac driven off the assembly line, to the car lot Raw Materials Inventory Work in Process Inventory (WIP) Finished Goods Inventory + - + - + - Raw Materials Raw Materials WIP is debited for Raw Materials are are debited for are credited for amounts of Raw converted with Direct Finished Product When the finished amounts bought amounts put into Materials put into Labor and Mfg OH into is moved to Finished product is sold, production production finished product, Goods by debiting it is taken out of which is moved to Finished Goods. Finished Goods with WIP is also debited Finished Goods by called a credit, and for Direct Labor crediting WIP Cost of transferred to and Applied Mfg OH Goods Manufactured Cost of Goods Sold (CoGS) Cost of Goods Sold (CGS) + - Finished Goods All amounts are unadjusted for that are sold under or over applied overhead For a cost, the debit credit rules are: increase on the left/debit side and decrease on the right/credit side. Assets and costs follow the same rule. Using numbers to show the flow of inventory (and conversion costs) through a Job Order Costing System? Raw Materials Inventory Work in Process Inventory (WIP) Finished Goods Inventory + - + - + - Begin Bal $4 Begin Bal -0- Begin Bal $215 $50 of raw $38 of raw materials $38 raw materials $107 of $107 finished $90 materials bought put into production $76 direct labor product is completed and ready to be sold $29 mfg oh, applied End Balance $16 End balance $232 (4 + 50 - 38) End Balance $36 (0 + 38 + 76 + 29 - 107) COST OF GOODS MANUFACTURED IS $107 Cost of Goods Sold (CGS) + - $90 (Costs, expenses, revenues, typically have a 0 beginning balance because these income statement types of accounts are closed out at the end of each period. When there is only one amount in a t-account, that one amount is automatically the end balance. No need to designate it as end balance.)

How inventory Flows through a Job Order Cost System, Along with the Conversion Costs. T-Account Demonstration Because all three inventory accounts are assets, the debit credit rules are: increase on the left/debit side and decrease on the right/credit side. Defintion: "Building blocks" of the product Initial inputs, Product's made of this Examples: Nuts for Snickers Bar Metal for Cadilac Raw Materials Inventory + - Partially completed product. Still in progress. Still being manufactured Snickers Bar prior to wrapping Cadilac without doors or engine Work in Process Inventory (WIP) + - Raw Materials are debited for amounts bought WIP is debited for amounts of Raw Materials put into production Raw Materials are credited for amounts put into production WIP is also debited for Direct Labor and Applied Mfg OH Raw Materials are converted with Direct Labor and Mfg OH into finished product, which is moved to Finished Goods by crediting WIP Completed Product. "On the shelves or in the showroom." Ready for sale to customer Case of 144 Snickers, ready for shipment Cadilac driven off the assembly line, to the car lot Finished Goods Inventory + - Finished Product is moved to Finished Goods by debiting Finished Goods. called Cost of Goods Manufactured When the finished product is sold, it is taken out of Finished Goods with a credit, and transferred to Cost of Goods Sold (CoGS) Cost of Goods Sold (CGS) + Finished Goods All amounts are unadjusted for that are sold under or over applied overhead For a cost, the debit credit rules are: increase on the left/debit side and decrease on the right/credit side. Assets and costs follow the same rule. Using numbers to show the flow of inventory (and conversion costs) through a Job Order Costing System... Raw Materials Inventory + Begin Bal $4 $50 of raw $38 of raw materials materials bought put into production End Balance $16 (4 + 50 - 38) Work in Process Inventory (WIP) + Begin Bal -0$38 raw materials $107 of $76 direct labor product is completed $29 mfg oh, applied Finished Goods Inventory + Begin Bal $215 $107 finished $90 and ready to be sold End balance $232 End Balance $36 (0 + 38 + 76 + 29 - 107) COST OF GOODS MANUFACTURED IS $107 Cost of Goods Sold (CGS) + $90 - (Costs, expenses, revenues, typically have a 0 beginning balance because these income statement types of accounts are closed out at the end of each period. When there is only one amount in a t-account, that one amount is automatically the end balance. No need to designate it as end balance.) MANUFACTURING COST FLOWS, STATEMENTS AND SCHEDULES (22 PTS) Respond in a color other than black. Each numbered example is independent. A helpful document to use for this assignment is the Excel doc Inventory Accts, and also the outline/frameworks of Cost of Goods Manufactured, Cost of Goods Sold, and the Income Statement 1. Given these two t-accounts, answer the 5 questions a-e. Show work. RAW MATERIALS INVENTORY Beg Bal $10,000 Jan 9 8,000 Jan 10 ??? Requis'd into production End Bal $16,000 WORK IN PROCESS INVENTORY Beg Bal $9,000 Jan 10 ??? Raw Mat requisitioned Jan 12 Direct Labor 4,000 Jan 28 Applied MOH 2,000 End Bal $3,000 ??? To Finished Goods a. What is the dollar amount of the raw materials requisitioned into production in Jan 10? b. What is the dollar amount of completed inventory transferred from WIP to Finished Goods? c. If manufacturing overhead is applied based on direct labor cost, what is the predetermined overhead rate? Include both the dollar amount and the cost driver in your response. d. What is the dollar amount of cost of goods manufactured? e. Why can't underapplied or overapplied overhead be calculated from the above? 2. Show work. Given the following costs, determine Cost of Goods Manufactured. Prepare a scratch schedule of Cost of Goods Manufactured to determine your response. Good form is not required. Not all of the information provided is used to determine Cost of Goods Manufactured. Type of Inventory Beginning Bal End Bal Raw Materials $5 $4 Work in Process $3 $6 Finished Goods $10 $25 Raw Materials purchased during the period, $3 Direct Labor costs = $12 Applied Manufacturing Overhead = $7 Actual Manufacturing Overhead = $8 3. Given the following costs, determine Cost of Goods Sold, adjusted for underapplied or overapplied overhead. Prepare a scratch schedule of Cost of Goods Sold to determine your response. Good form is not required. Not all of the information provided is used to determine Cost of Goods Sold. Type of Inventory Beginning Bal End Bal Raw Materials $5 $4 Work in Process $3 $6 Finished Goods $10 $25 Applied Manufacturing Overhead = $7 Actual Manufacturing Overhead = $8 Cost of Goods Manufactured = $15 4. Given the following costs, determine Cost of Goods Manufactured. You may wish to prepare a scratch schedule of Cost of Goods Sold to help you calculated Cost of Goods Manufactured. Good form is not required. Not all of the information provided will be used. Type of Inventory Raw Materials Work in Process Finished Goods Beginning Bal $5 $3 $10 End Bal $4 $6 $25 Cost of Goods Sold (before any adjustment) = $14 5. Show work. Given the following Finished Goods Inventory t-account and a portion of the income statement, determine underapplied or overapplied manufacturing overhead. FINISHED GOODS INVENTORY Beg Bal $30 transferred from WIP 55 Completed Goods transferred out ????? Ending Balance $ 20 Sales Less Cost of Goods Sold Gross Margin 100 62 38