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Chapter 2 Practice Problems Solutions

1. Direct materials used:

Beginning direct materials ……………… 60,000 Direct materials purchased ……………… 690,000 Ending direct materials …………………. Direct materials used ……………………. 705,000

Cost of goods manufactured:

Beginning work in process ……………… 120,000 Direct materials used ……………………. 705,000 Direct labor ……………………………… 135,000 Manufacturing overhead ………………… 370,000 Ending work in process …………………. Cost of goods manufactured …………... 1,200,000

2.
| |Cost |Cost Type |
| |a. The cost of the memory chip used in the radar sets |Product Cost |
| |b. Factory heating costs |Product Cost |
| |c. Factory equipment maintenance costs |Product Cost |
| |d. Training costs for new administrative employees |Period Cost |
| |e. The cost of the solder that is used in assembling the radar sets |Product Cost |
| |f. The travel costs of the company’s salespeople |Period Cost |
| |g. Wages and salaries of factory security personnel |Product Cost |
| |h. The cost of air conditioning the executive offices

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