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Chapter 16: 16RQ (page 885)
How is cost of goods manufactured calculated?
The cost of goods manufactured in three steps first direct material used is calculated, second total manufacturing costs incurred, and then the cost of goods manufactured is calculated.
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How does a service company calculate unit cost per service?
Preparing a schedule of cost of goods manufactured Wilson Corp., a lamp manufacturer, provided the following information for the year ended December 31, 2018:
Balances: Beginning Ending
Direct Materials \( 59,000 \) 23,000
Work-in-Process Inventory 109,000 62,000
Finished Goods Inventory 41,000 44,000
Other information:
Depreciation, plant building and equipment $ 16,000
Direct materials purchases 151,000
Insurance on plant 24,000
Sales salaries 47,000
Repairs and maintenance鈥攑lant 10,000
Indirect labor 39,000
Direct labor 121,000
Administrative expenses 60,000
Requirements 2. What is the unit product cost if Wilson manufactured 3,700 lamps for the year?
How do period costs differ from product costs?
Calculating cost of goods sold for merchandising and manufacturing companies
Below are data for two companies:
Company 1 Company 2
Beginning balances:
Merchandise Inventory \( 11,600
Finished Goods Inventory \) 15,400
Ending balances:
Merchandise Inventory 12,400
Finished Goods Inventory 11,300
Net Purchases 152,500
Cost of Goods Manufactured 214,500
Requirements
1. Define the three business types: service, merchandising, and manufacturing.
2. Based on the data given for the two companies, determine the business type of each one.
3. Calculate the cost of goods sold for each company
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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