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Chapter 16: 13RQ (page 885)
What are prime costs? Conversion costs?
Prime cost is the combination of direct cost and conversion cost is the combination of direct labor and manufacturing overhead.
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How do manufacturing companies differ from merchandising companies?
Identify the following characteristics as primarily related to financial accounting (FA) or managerial accounting (MA):
5. Summary reports prepared quarterly or annually.
Selected data for three companies are given below. All inventory amounts are ending balances and all amounts are in millions.
Company A Company B Company C
Cash \( 6 Wages Expense \) 12 Administrative Expenses $ 4
Net Sales Revenue 48 Equipment 32 Cash 25
Finished Goods Inventory 10 Accounts Receivable 8 Net Sales Revenue 75
Cost of Goods Sold 23 Service Revenue 65 Selling Expenses 8
Selling Expenses 4 Cash 34 Merchandise Inventory 12
Equipment 67 Rent Expense 12 Equipment 55
Work-in-Process Inventory 9 Accounts Receivable 19
Accounts Receivable 14 Cost of Goods Sold 25
Cost of Goods Manufactured 23
Administrative Expenses 7
Raw Materials Inventory 6
Using the data on the previous page, calculate total current assets for each company
Distinguishing between direct and indirect costs Granger Cards is a manufacturer of greeting cards. Classify its costs by matching the costs to the terms.
a. Artists鈥� wages
b. Wages of materials warehouse workers
c. Paper
d. Depreciation on manufacturing equipment
e. Manufacturing plant manager鈥檚 salary
f. Property taxes on manufacturing plant
g. Glue for envelopes
This is the first problem in a sequence of problems for Piedmont Computer Company, a manufacturer of personal computers and tablets. During its first month of manufacturing, Piedmont Computer Company incurred the following manufacturing costs:
Balances: Beginning Ending
Direct Materials \( 10,500 \) 9,700
Work-in-Process Inventory 0 17,000
Finished Goods Inventory 0 31,000
Other information:
Direct materials purchases $ 16,000
Plant janitorial services 500
Sales salaries expense 10,000
Delivery expense 1,600
Sales revenue 1,100,000
Utilities for plant 16,000
Rent on plant 9,000
Customer service hotline costs 19,000
Direct labor 210,000
Prepare a schedule of cost of goods manufactured for Piedmont Computer Company for the month ended January 31, 2020.
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