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Cost accumulation systems

Cost Accounting Chapter 2


Ex 2-7 Statement of cost of goods manufactured
i) Cost of goods manufactured statement
ii) Amount of cost of goods sold

(a) AVACADO COMPANY


COST OF GOODS MANUFACTURED
For the period ended 31 May 19X8
(All amounts in $)

Direct materials cost:


Opening balance as of 01 May 19X8 14,000
Add: Put in process during the period 47,000
Direct materials available for use 61,000
Less: Closing balance as of 31 May 19X8 12,750
Direct materials consumed during the period 48,250

Direct Labour cost:


Department P ($5.00 x 15,475) 77,375
Department S ($4.35 x 9,725) 42,304
Department T ($3.75 x 11,000) 41,250
Direct labour incurred 160,929

Factory overhead cost: 60,000

Cost of goods put to production 269,179

Add: Work-in-process opening balance as of 01 May 19X8 16,250


Cost of goods in process during the period 285,429
Less: Work-in-process closing balance as of 31 May 19X8 18,500
Cost of goods manufactured 266,929

(b) AVACADO COMPANY


COST OF GOODS SOLD
For the period ended 31 May 19X8
(All amounts in $)

Cost of goods manufactured 266,929

Add: Fininshed goods opening balance as of 01 May 19X8 22,000


Cost of goods available for sale 288,929
Less: Finished goods closing balance as of 31 May 19X8 20,000

Cost of goods sold 268,929

Assignment 1
Cost accumulation systems
Cost Accounting Chapter 2
Ex 2-7 Statement of cost of goods manufactured
i) Cost of goods manufactured statement

BLIMP MANUFACTURING COMPANY


COST OF GOODS MANUFACTURED
For the year ended 31 December 19X1
(All amounts in $)

Direct materials cost:


($73,000 x 90%) 65,700

Direct Labour cost:


($97,000 x 93%) 90,210

Factory overhead cost:


Indirect materials ($73,000 x 10%) 7,300
Indirect labour ($97,000 x 7%) 6,790
Other costs (125% of direct labour cost) 112,763 126,853

Cost of goods put to production 282,763

Add: Work-in-process opening balance as of 01 Jan 19X1 32,250


Cost of goods in process during the period 315,013
Less: Work-in-process closing balance as of 31 Dec 19X1 27,000
Cost of goods manufactured 288,013

Assignment 1
Cost accumulation systems
Cost Accounting Chapter 2
Ex 2-10 Statement of cost of goods manufactured and sold
i) Cost of goods manufactured statement
ii) Cost of goods sold statement

(a) CHIPPY CHOCOLATE COOKIE COMPANY


COST OF GOODS MANUFACTURED
For the year ended 31 December 19X2
(All amounts in $)

Direct materials cost:


Opening balance as of 01 Jan 19X2 27,000
Add: Purchased and put in process during the period 72,000
Direct materials available for use 99,000
Less: Closing balance as of 31 Dec 19X2 28,500
Direct materials consumed during the period 70,500

Direct Labour cost: 32,000

Factory overhead cost: 73,500

Cost of goods put to production 176,000

Add: Work-in-process opening balance as of 01 Jan 19X2 25,000


Cost of goods in process during the period 201,000
Less: Work-in-process closing balance as of 31 Dec 19X2 22,000
Cost of goods manufactured 179,000

(b) CHIPPY CHOCOLATE COOKIE COMPANY


COST OF GOODS MANUFACTURED
For the year ended 31 December 19X2
(All amounts in $)

Cost of goods manufactured 179,000

Add: Fininshed goods opening balance as of 01 Jan 19X2 49,000


Cost of goods available for sale 228,000
Less: Finished goods closing balance as of 31 Dec 19X2 45,000

Cost of goods sold 183,000

Assignment 1
Cost accumulation systems
Cost Accounting Chapter 2
Ex 2-12 Computation of direct materials cost

BLUM COMPANY
COMPUTATION OF DIRECT MATERIALS COST
For the period 19X2
(All amounts in $)

Direct materials cost:


Opening balance as of 01 Jan 19X2 7,000
Add: Purchased and put in process during the period 43,200
Direct materials available for use 50,200
Less: Closing balance as of 31 Dec 19X2 13,500
(Ans) Direct materials cost for 19X2 36,700

Direct Labour cost: 50,000

Factory overhead cost:


Utilities 62,500
Indirect materials 5,000 67,500

Cost of goods put to production 154,200

Add: Work-in-process opening balance as of 01 Jan 19X2 15,100


Cost of goods in process during the period 169,300
Less: Work-in-process closing balance as of 31 Dec 19X2 17,600
Cost of goods manufactured 151,700

Add: Fininshed goods opening balance as of 01 Jan 19X2 19,500


Cost of goods available for sale 171,200
Less: Finished goods closing balance as of 31 Dec 19X2 21,200

Cost of goods sold 150,000

Assignment 1
Cost accumulation systems
Cost Accounting Chapter 2
Pr 2-3 Cost of goods manufacture & sold and net income or loss.

(a) PARRISH FERTILIZER COMPANY


CALCULATION OF COST OF PRODUCT
For the year ended 19X3
(All amounts in $)

Direct materials cost:


($300,000 x 75%) 225,000
Direct Labour cost:
($350,000 x 60%) 210,000
Factory overhead cost:
Indirect materials ($300,000 x 25%) 75,000
Indirect labour ($350,000 x 40%) 140,000
Heat, light & power 115,000
Depreciation 78,000
Property taxes 65,000
Repairs & maintenance 42,000 515,000
Cost of goods put to production 950,000
Add: Work-in-process opening balance as of 01 Jan 19X3 -
Cost of goods in process during the period 950,000
Less: Work-in-process closing balance as of 31 Dec 19X3 -
Cost of goods manufactured 950,000

(b) Total Cost computation


Cost of goods manufactured $ 950,000
Add: Selling expenses $ 80,000
Add: General & administrative expenses $ 50,000
Total Cost $ 1,080,000
(c) Unit Cost computation
Cost of goods manufactured $ 950,000
Total fininshed goods manufactured during the period (30,000+95,000) 125,000
Per unit cost (950,000 / 125,000) $ 7.60

(d) Prime costs


Direct materials $ 225,000
Direct labour $ 210,000
$ 435,000

(e) Conversion costs


Direct labour $ 210,000
Factory overhead cost: $ 515,000
$ 725,000

(f) Period costs


Selling expenses $ 80,000
General & administrative expenses $ 50,000
$ 130,000

Assignment 1
Cost accumulation systems
Cost Accounting Chapter 2
Pr 2-4 Statement of cost of goods manufactured and sold
i) Cost of goods manufactured statement
ii) Cost of goods sold statement
iii) Net income or loss

(a) BLACKWELL CLOCK COMPANY


PROFIT & LOSS ACCOUNT
For the year ended 19XX
(All amounts in $)

Sales 945,000

Cost of goods sold


Direct materials cost 176,000
Direct Labour cost 250,000
Factory overhead cost 237,500
Cost of goods put to production 663,500

Add: Work-in-process opening balance 60,000


Cost of goods in process during the period 723,500
Less: Work-in-process closing balance 75,000
Cost of goods manufactured 648,500
Add: Fininshed goods opening balance 54,000
Cost of goods available for sale 702,500
Less: Finished goods closing balance 35,000 667,500

Gross profit 277,500

Selling expenses 55,000


General & administrative expenses 117,000

Net income 105,500

Assignment 1
Cost accumulation systems
Cost Accounting Chapter 2
Pr 2-5 Statement of cost of goods manufactured and sold
i) Cost of goods manufactured statement
ii) Cost of goods sold statement
iii) Net income or loss

(a) STIFF SHIRT COMPANY


PROFIT & LOSS ACCOUNT
For the year ended 19XX
(All amounts in $)

Sales 1,300,000

Cost of goods sold


Direct materials cost 365,000
Direct Labour cost 405,000
Factory overhead cost 445,000
Cost of goods put to production 1,215,000

Add: Work-in-process opening balance 100,000


Cost of goods in process during the period 1,315,000
Less: Work-in-process closing balance 95,000
Cost of goods manufactured 1,220,000
Add: Fininshed goods opening balance 64,000
Cost of goods available for sale 1,284,000
Less: Finished goods closing balance 76,000 1,208,000

Gross profit 92,000

Selling expenses 26,000


General & administrative expenses 82,000

Net income/ (loss) (16,000)

Assignment 1
Cost accumulation systems
Cost Accounting Chapter 2
Pr 2-10 Computation of ending WIP inventory

PARRISH FERTILIZER COMPANY


CALCULATION OF ENDING WIP INVENTORY
As of 31 December 19X1
(All amounts in $)

Direct materials cost:


Opening balance as of 01 Jan 19X1 28,000
Add: Purchased and put in process during the period 136,000
Direct materials available for use 164,000
Less: Closing balance as of 31 Dec 19X1 24,000
Direct materials consumed during the period 140,000

Direct Labour cost: 120,000

Factory overhead cost: 135,000

Cost of goods put to production 395,000


Add: Work-in-process opening balance as of 01 Jan 19X1 60,000
Cost of goods in process during the period 455,000
(Ans) Less: Work-in-process closing balance as of 31 Dec 19X1 65,000
Cost of goods manufactured 390,000

Assignment 1