My Accountinglah Problems 2-29 Computing cost of goods purchased and cost of goods sold. The following data are for Marvin Department Store. The account balances (in thousands) are for 2011 Marketing, distribution, and customer service costs $ 37,000 Merchandise inventory, January 1, 2011 27,000 Utilities 17,000 General and administrative costs 43,000 Merchandise inventory, December 31, 2011 34,000 Purchases 155,000 Miscellaneous costs 4,000 Transportation in 7.000 Purchase returns and allowances 4,000 Purchase discounts 6,000 Revenues 280,000 Required 1. Computo (a) the cost of goods purchased and (b) the cost of goods sold. Z Propte the income statement for 2011, 2-30 Cost of goods purchased, cost of goods sold, and income statement. The following data are for Montgomery Retail Outlet Stores. The account balances (in thousands) are for 2011, Murketing and advertising costs $ 24,000 Merchandise inventory, January 1, 2011 45,000 Shipping of merchandise to customers 2,000 Required Building depreciation $ 4,200 Purchases 200,000 General and administrative costs 32,000 Merchandise inventory, December 31, 2011 52,000 Merchandise freight-in 10,000 Purchase returns and allowancus 11,000 Purchase discounts 9,000 Revenues 320,000 1. Compute (a) the cost of goods purchased and (b) the cost of goods sold. Prepare the income statement for 2011. 2-31 Fiol of Inventoriable Costs. Renka's Heaters selected data for October 2011 are presented here (in millions): Direct materials inventory 10/1/2011 $ 105 Direct materials purchased 365 Direct materials used 385 Total manufacturing overhead costs 450 Variable manufacturing overhead costs 265 Total manufacturing costs incurred during October 2011 1,610 Work-in-process inventory 10/1/2011 230 Cost of goods manufactured 1,660 Finished goods inventory 10/1/2011 130 Cost of goods sold 1.770 Calculate the following costs: 1. Direct materials inventory 10/31/2011 2. Fixed manufacturing overhead costs for October 2011 3. Direct manufacturing labor costs for October 2011 4. Work-in-process inventory 10/31/2011 5. Cost of finished goods available for sale in October 2011 6. Finished goods inventory 10/31/2011 Required 58 CHAPTER 2 AN INTRODUCTION TO COST TERMS AND PURPOSES 2-33 Cost bf goods manufactured Income statement, manufacturing company. Consider the following account bances (in thousands) for the Piedmont Corporation: Piedmont Corporation Direct materials inventory Work-in-process inventory Finished goods inventory Purchases of direct materials Direct manufacturing labor Indirect manufacturing labor Indirect materials Plant insurance Depreciation-plant, building, and equipment Plant utilities Repairs and maintenance-plant Equipment leasing costs Marketing, distribution, and customer-service costs General and administrative costs Beginning of End 2011 2011 65,000 34,000 83,000 72,000 123,000 102,000 128,000 106,000 48,000 14,000 2,000 21,000 12,000 8,000 32,000 62,000 34,000 Required 1. Prepare a schedule for the cost of goods manufactured for 2011. 2. Revenues for 2011 were $600 million. Prepare the income statement for 2011. Required December Expo 2-39 Missing records, computing inventary costs. Ron Williama recently took over as the controller of Johnson Brothers Manufacturing, Last month, the previous controller left the company with little notice and left the counting records in disarray. Ron needs the ending Inventory balances to report first quar- ter numbers. For the previous month (March 2011) Ron was able to piece together the following information Direct materials purchased $ 240,000 Work-in-process inventory, 3/1/2011 $ 70,000 Direct materials inventory, 3/1/2011 $ 25,000 Finished goods inventory, 3/1/2011 $ 320,000 Conversion Costs $ 580,000 Total manufacturing costs added during the period $ 840.000 Cost of goods manufactured 4 times direct materials used Gross margin as a percentage of revenues 20% Revenues $1,037,500 Calculate the cost of: 1. Finished goods inventory, 3/31/2011 2. Work-in-process inventory, 3/31/2011 3. Direct materials inventory, 3/31/2011 2-40 Comprehensive problem an unit costs, product costs. Denver Office Equipment manufactures and sells metal shelving. It began operations on January 1, 2011. Costs incurred for 2011 are as follows (V stands for variable; F stands for fixed): Direct materials used $147,800 V Direct manufacturing labor costs 33,400 V Plant energy costs 2.000 V Indirect manufacturing labor costs 14,000 V Indirect manufacturing labor costs 19.000 F Other indirect manufacturing costs - 11.000 V Other indirect manufacturing costs 14,000 F Marketing, distribution, and customer service costs 128,000 V Marketing, distribution, and customer service costs 48.000 F Administrative costs 56,000 F Variable manufacturing costs are variable with respect to units produced. Variable marketing, distribution, and customer-service costs are variable with respect to unis sold. Inventory data are as follows: Beginning: January 1, 2011 Direct materials Work in process Finished goods Ending: December 31, 2011 2,400 lbs units 7 units units Production in 2011 was 122,000 units. Two pounds of direct materials are used to make one unit of fin ished product Revenues in 2011 were $594,000. The selling price per unit and the purchase price per pound of direc materials were stable throughout the year. The company's ending inventory of finished goods is carried a the average unit manufacturing cost for 2011. Finished-goods inventory at December 31, 2011, was $25,000 ASSIGNMENT MATERIAL 61 Required 1. Calculate direct materials inventory, total cost, December 31, 2011. 2. Calculate finished-goods inventory, total units, December 31, 2011, 3. Calculate selling price in 2011. 4. Calculate operating income for 2011