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Chapter 16: Q42CP (page 904)

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.

Short Answer

Expert verified

The cost of goods manufactured is $235,300.

Step by step solution

01

Step-by-Step SolutionStep 1: Definition of direct materials

The direct materials are defined as the raw materials which are used in the production process directly by the company.

02

Preparation of schedule of cost of goods manufactured

Piedmont Computer Company
Schedule of cost of goods manufactured
Month Ended January 31, 2020

Amount ($)

Amount ($)

Amount ($)

Beginning WIP Inventory

$0

Direct Material Used:

Beginning Direct Materials

$10,500

Purchases of direct material

16,000

Direct Materials Available for use

26,500

Ending Direct Materials

-9,700

Direct Material Used

16,800

Direct Labor

210,000

Manufacturing Overhead

Plant Janitorial Services

500

Utilities For plant

16,000

Rent on plant

9,000

Total manufacturing Overhead

25,500

Total manufacturing cost incurred during month

252,300

Total manufacturing cost to account for

252,300

Ending WIP Inventory

-17,000

Cost of goods manufactured

$235,300

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Most popular questions from this chapter

Question:Determining flow of costs through a manufacturer鈥檚 inventory accounts

Root Shoe Company makes loafers. During the most recent year, Root incurred total manufacturing costs of \(26,300,000. Of this amount, \)2,000,000 was direct materials used and \(19,800,000 was direct labor. Beginning balances for the year were Direct Materials, \)700,000; Work-in-Process Inventory, \(1,500,000; and Finished Goods Inventory, \)400,000. At the end of the year, balances were Direct Materials, \(800,000; Work-in-Process Inventory, \)1,200,000; and Finished Goods Inventory, $600,000.

Requirements Analyze the inventory accounts to determine:

1. Cost of direct materials purchased during the year.

2. Cost of goods manufactured for the year.

3. Cost of goods sold for the year.

Identify the following characteristics as primarily related to financial accounting (FA) or managerial accounting (MA):

2. Helps in planning and controlling operations.

Preparing an income statement and calculating unit cost for a merchandising company

Clyde Conway owns Clyde鈥檚 Pets, a small retail shop selling pet supplies. On December 31, 2018, the accounting records of Clyde鈥檚 Pets showed the following:

Merchandise Inventory on December 31, 2018 $ 10,100

Merchandise Inventory on January 1, 2018 15,900

Net Sales Revenue 56,000

Utilities Expense for the shop 3,300

Rent for the shop 4,100

Sales Commissions 2,650

Purchases of Merchandise Inventory 25,000

Requirements

1. Prepare an income statement for Clyde鈥檚 Pets for the year ended December 31, 2018.

2. Clyde鈥檚 Pets sold 3,850 units. Determine the unit cost of the merchandise sold, rounded to the nearest cent

Question:Calculating cost of goods sold for merchandising and manufacturing companies

Below are data for two companies:

Company A Company B

Beginning balances:

Merchandise Inventory \( 10,600

Finished Goods Inventory \) 15,000

Ending balances:

Merchandise Inventory 13,100

Finished Goods Inventory 11,700

Net Purchases 154,500

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

Determining the flow of costs through a manufacturer鈥檚 inventory accounts

True Fit Shoe Company makes loafers. During the most recent year, True Fit incurred total manufacturing costs of \(21,900,000. Of this amount, \)2,600,000 was direct materials used and \(14,800,000 was direct labor. Beginning balances for the year were Direct Materials, \)700,000; Work-in-Process Inventory, \(1,500,000; and Finished Goods Inventory, \)1,100,000. At the end of the year, balances were Direct Materials, \(800,000; Work-in-Process Inventory, \)2,000,000; and Finished Goods Inventory, $1,080,000.

Requirements Analyze the inventory accounts to determine:

1. Cost of direct materials purchased during the year.

2. Cost of goods manufactured for the year.

3. Cost of goods sold for the year.
See all solutions

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