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Cost

In: Business and Management

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Solution of 2012 Mid Term Exam
Cost Accounting- Third Year Question No. One:

1- ABC Company
Schedule of Cost of Goods Manufactured
For October
Direct material costs
Beginning inventory of Direct Materials 4,000
Direct materials purchased ………………………135,000
=Cost of direct materials available for use………..139,000
(-)Ending inventory of Direct Materials………….. (5,000)
Direct materials used…………………………………………………………….…134,000
Direct manufacturing labor costs………………………………………………….…50,000 Manufacturing overhead costs
Salaries of factory supervisors………………….....15,000
Salaries of factory managers ……………………...10,000
Factory supplies (3000+8000-2500)……………......8,500
Factory rent…………………………………………9,500
Factory depreciation……………………………....25,000
Total Manufacturing overhead costs …………………………………………….…...68,000
Total Manufacturing costs………………………………………………………….252, 000
Add beginning work-in-process inventory, ……………………………………….…13,000
Deduct ending work-in-process inventory, ………………………………………… (15000)
Cost of goods manufactured (to income statement) ………………………………$ 250,000 2- ABC Company
Income Statement
For March 2011
Revenues ( 8000* 50)………………………………………………………………400,000
Cost of units sold:
Beginning finished goods, ……………………………… 0
Cost of goods manufactured ………………………….250,000
Cost of goods available for sale……………………….250, 000
Ending finished goods (2000 units* $25)………....... (50,00)
Cost of Units sold…………………………………………………………………….(200,000)
Gross margin…………………………………………………………………………..200,000
Less: Operating costs:
Salaries of salesmen…………………………………… 17, 000 Sales commission …………………………………….. 12,000
Office supplies (1500+3000-1000)……………………. 3,500
Office rent……………………………………………... 6, 000
Advertising expense…………………………………… 7,000
General and administrative expense………………… 18,500...

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