Problem: 16.

1A

calculation of manufacturing cost

Direct material used
Direct labor
Manufacturing overhead cost
total Manufacturing cost

$
$
$
$

216,000
200,000
350,000
766,000

$
$

225,000
(216,000)

9,000

Direct materials used

Direct labor
Manufacturing overhead
Less: Cost of finished goods
Ending balance of work in process

$
$
$
$
$

216,000
200,000
350,000
(728,000)
38,000

cost of finished goods manufactured (112 boats)

Less: cost of goods sold( 728,000/112 ) x 100

$
$
$

728,000
(650,000)
78,000
125,000

1) Avg per unit cost of boat

112 boat cost

$ 766,000

Avg per unit cost of boat$ 766,000/112 = $ 6839

2)
Calculation of the year end balance Inventories
Direct materials purchase
Less: Direct materials used
Direct materials, ending balance

The year-end balances of the inventories

By assuming that the amount of the ending inventory of finished goods and the cost of goods
sold are determined using the average per-unit cost of manufacturing a completed boat.

3) Cost of Goods sold

Cost of Goods sold for 100 boats (728,000/112)x 100..$ 650,000

B) For the current year, actual manuf cost (cost of dir mate purchased,
director labor assigned to production, actual manuf overhead cost$

Management Accounting I

775,000) cannot be deducted from the revenue. Because Manuf overhead

cost calculated is 766,000 $, difference $ 9,000 should be deducted in the
next year.
Problem: 16.2
A)

calculation of total manufacturing costs charged to work in process during the period
Direct material used
Direct labor
Manufacturing overhead
total manufacturing cost

$
$
$
$

750,000
900,000
1,800,000
3,450,000

B)
calculation of cost of finished goods manufactured
cost of finished goods(50 motors homes x $ 60,000 per unit)

3,000,000

2,880,000

C)
calculation of cost of finished goods manufactured
cost of goods sold (48 motors homes x $ 60,000 per unit)
D)

calculation of gross profit on sale

revenue (48 motors homes x $95,000per unit)
Less: cost of goods sold
gross profit on sales.

$
$
$

4,560,000
(2,880,000)
1,680,000

E)
calculation of ending inventories
work in process ,ending (6 x $ 60,000 per unit)
finished goods, ending (2 x $ 60,000 per unit)
Ending Inventories

$
$
$

360,000
120,000
480,000

Problem: 16.3

Management Accounting I

A)

purchase of direct materials

269,000

$
$
$
$

13,000
269,000
(17,000)
265,000

134,000

2,700

B)

calculation of the cost of direct materials used

material inventory, beginning balance
purchase of direct materials
less; cost of material, ending balance
the cost of direct material used
C)

direct labor costs assigned to production

D)

the year-end liability for direct wages payable

E)

calculation of total manufacturing costs charged to the work in process inventory

direct material used
$
265000
direct labor
$
134,000
manufacturing overhead cost
$
214,400
total manufacturing costs
$
613,400
F)

the cost of finished goods manufactured

614,400

$
$
$
$

19,000
613,400
(614,400)
18,000

G)

calculation of the year-end balance in the work in process inventory

work in process inventory, beginning balance
total manufacturing cost
less; cost of finished goods
work in process inventory, ending balance
H)

Management Accounting I

calculation of the cost of goods sold

finished goods inventory, beginning balance
the cost of finished goods manufactured
Less; finished goods inventory, ending balance
the cost of goods sold

$
$
$
$

46,000
614,400
(53,400)
607,000

I)

calculation of the total amount of inventory listed in the year-end balance sheet
materials inventory, ending balance
$
work in process inventory, ending balance
$
finished goods inventory, ending balance
$
the total amount of inventory
$

17,000
18,000
53,400
88,400

Problem: 16.4

Material Inventory
Process Inventory

work in

Beg.bal$16,000

l
348,000

$345,000
End. End bal $
13,000

Beg bal
$21,000

951,000

$348,000
$
210,000
$
399,000
End Bal $
27,000

Direct Labour
Goods Inventory
$ 206,000
$ 210,000
End Bal $
4,000

Manufacturing Overhead

Finished
Beg bal
$106,000
$ 939,000
951,00
0
Endbal
118,000
Cost of Goods Sold

Management Accounting I

$ 399,000

$ 399,000

$ 939,000

a)

Purchase of direct material

$ 345,000

b)

Cost of direct materials used

$ 348,000

c)

Direct labor payrolls paid during the year

$ 206,000

d)

Direct labor costs assigned to production

$ 210,000

e)

Total manufacturing costs charged to WIP inv acct during the year

$ 957,000

f)

The costs of finished goods manufactured

$ 951,000
$939,000

g)

The costs of goods sold

i)

The total cost to be classified as inventory in the year-end balance

Management Accounting I

$ 158,000