i AM HAVING TROUBLE WITH THESE TWO QUESTIONS
2-17
Calculate cost for a manufacturer, no inventories
The following data pertains to the Anderson table mfg company for Jan. 2003
the company made 1000 tables durning Jan, and there are no beginning or ending inventories.
wood used in production 25000 $25,000
cleaning supplies $300.00
machine lubricants used in the factory $100.00
factory rent $2,000.00
rent on the sales office $3,000.00
Sales Salaries $20,000.00
production line labor cost $50,000.00
plant security guard $1,200.00
plant supervision $2,500.00
sales office supervision $3,000.00
Depereciation on production equipement $4,000.00
Depereciation on sales office equipment $1,000.00
$112,100
Required
what was the cost of direct material used in production durning Jan 2003 ?
what is the cost of direct labor for Jan 2003 ?
what is the cost for Manufacturing overhead for Jan 2003 ?
what is the total cost of tables manufractured in Jan 2003 ?
whatis the cost of each table manufactured in Jan 2003 ?
Do you think the cost per table is valuable information for Carole Anderson, the
companys owner?
How might she use this information
2-28
INVENTORY AND PRODUCTION COST INCLUDING COST OF GOODS
MANUFACTURED AND COST OF GOODS SOLD
The following data pertain to the Elsea MFG company for the year ended Dec 31, 2004
The company made 60,000 SW20 switching units durning 2004
Beging direct material inventory $42,000.00
Ending direct material inventory $48,000.00
beginning work in process inventory $84,000.00
Ending work in process inventory $93,000.00
Beginning finished goods inventory $124,000.00
Ending finished goods inventory $133,000.00
Direct materials purchased $850,000.00
indirect materials used in production $4,000.00
Factory supplies used $6,200.00
Deprecation on the factory $60,000.00
Deprecation on sales office $4,000.00
Deprecation on the administrative office $3,000.00
Sales Salaries $120,000.00
Assembly line labor cost $820,000.00
Factory security guard cost $12,000.00
Factory supervision $82,600.00
Depreciation on production equipment $560,000.00
Depreciation on sales office equipment $22,200.00
Required
what was the cost of direct material used in production durning Jan 2004 ?
what is the cost of direct labor for Jan 2004 ?
what is the cost for Manufacturing overhead for Jan 2004 ?
what is the total manufracturing cost incurred durning 2004 ?
what is the cost of goods manufractured for 2004 ?
what is the cost of goods sold for 2004 ?
Let's break down the questions one by one.
For the first set of questions related to the Anderson Table Mfg Company (2-17):
1. What was the cost of direct material used in production during Jan 2003?
- The cost of direct materials used in production can be calculated by looking at the "wood used in production" value, which is $25,000.
2. What is the cost of direct labor for Jan 2003?
- The cost of direct labor can be calculated by looking at the "production line labor cost" value, which is $50,000.
3. What is the cost for Manufacturing overhead for Jan 2003?
- The cost for manufacturing overhead can be calculated by adding up the following expenses: "cleaning supplies" ($300), "machine lubricants used in the factory" ($100), "factory rent" ($2,000), "plant security guard" ($1,200), "plant supervision" ($2,500), "depreciation on production equipment" ($4,000), and "depreciation on sales office equipment" ($1,000). The total cost for manufacturing overhead is $11,100.
4. What is the total cost of tables manufactured in Jan 2003?
- The total cost of tables manufactured can be calculated by summing up the costs of direct material ($25,000), direct labor ($50,000), and manufacturing overhead ($11,100). The total cost is $86,100.
5. What is the cost of each table manufactured in Jan 2003?
- The cost of each table manufactured can be calculated by dividing the total cost of tables manufactured ($86,100) by the number of tables made (1,000). The cost per table is $86.10.
6. Do you think the cost per table is valuable information for Carole Anderson, the company's owner?
- Yes, the cost per table is valuable information for Carole Anderson as it helps in determining the profitability of each table sold and making pricing decisions.
7. How might she use this information?
- Carole Anderson can use this information to analyze the company's profitability, make pricing decisions, and evaluate the cost efficiency of production processes.
Now, let's move on to the second set of questions related to the Elsea Mfg Company (2-28):
1. What was the cost of direct material used in production during Jan 2004?
- The cost of direct material used in production can be calculated by subtracting the ending direct material inventory ($48,000) from the beginning direct material inventory ($42,000). The cost of direct material used in production is $-6,000 (negative value indicates an increase in inventory).
2. What is the cost of direct labor for Jan 2004?
- The cost of direct labor can be calculated by looking at the "assembly line labor cost" value, which is $820,000.
3. What is the cost for Manufacturing overhead for Jan 2004?
- The cost for manufacturing overhead can be calculated by adding up the following expenses: "indirect materials used in production" ($4,000), "factory supplies used" ($6,200), "depreciation on the factory" ($60,000), "factory security guard cost" ($12,000), "factory supervision" ($82,600), "depreciation on production equipment" ($560,000), and "depreciation on sales office equipment" ($22,200). The total cost for manufacturing overhead is $746,000.
4. What is the total manufacturing cost incurred during 2004?
- The total manufacturing cost incurred during 2004 can be calculated by summing up the costs of direct material used in production, direct labor, and manufacturing overhead. However, since the cost of direct material used in production for Jan 2004 was negative, we can skip this step and move on to the next question.
5. What is the cost of goods manufactured for 2004?
- The cost of goods manufactured can be calculated by summing up the costs of the beginning work in process inventory ($84,000), direct material used in production (-$6,000), direct labor ($820,000), and manufacturing overhead ($746,000). The cost of goods manufactured is $1,644,000.
6. What is the cost of goods sold for 2004?
- The cost of goods sold can be calculated by summing up the costs of the beginning finished goods inventory ($124,000) and the cost of goods manufactured ($1,644,000), and then subtracting the ending finished goods inventory ($133,000). The cost of goods sold is $1,635,000.
To answer these questions, we need to calculate the cost for each component and then sum them up to find the final answers. Let's go through each question step by step.
For the first question (2-17),
- Cost of direct material used in production: This is given as $25,000.
- Cost of direct labor: This is given as $50,000.
- Cost of manufacturing overhead: This is the sum of all other costs except for direct material and direct labor. So, it would be $300 + $100 + $2,000 + $1,200 + $2,500 + $3,000 + $4,000 + $1,000 = $14,100.
- Total cost of tables manufactured: This is the sum of direct material, direct labor, and manufacturing overhead. So, it would be $25,000 + $50,000 + $14,100 = $89,100.
- Cost of each table manufactured: Divide the total cost of tables manufactured by the number of tables produced. So, it would be $89,100 / 1000 = $89.10 per table.
- The cost per table can be valuable information for Carole Anderson, the company's owner, as it helps her understand the cost structure and profitability of the manufactured tables. She can compare it with the selling price to determine if the business is making a profit or not.
For the second question (2-28),
- Cost of direct material used in production: This can be calculated by subtracting the ending direct material inventory from the beginning direct material inventory and adding the direct materials purchased. So, it would be ($42,000 - $48,000) + $850,000 = $844,000.
- Cost of direct labor: This is given as $820,000.
- Cost of manufacturing overhead: This is the sum of all other costs except for direct material and direct labor. So, it would be $4,000 + $6,200 + $60,000 + $4,000 + $3,000 + $120,000 + $12,000 + $82,600 + $560,000 + $22,200 = $874,000.
- Total manufacturing cost incurred during 2004: This is the sum of direct material, direct labor, and manufacturing overhead. So, it would be $844,000 + $820,000 + $874,000 = $2,538,000.
- Cost of goods manufactured for 2004: This is the sum of the cost of direct material used in production and the cost of manufacturing overhead. So, it would be $844,000 + $874,000 = $1,718,000.
- Cost of goods sold for 2004: This can be calculated by subtracting the ending finished goods inventory from the beginning finished goods inventory and adding the cost of goods manufactured. So, it would be ($124,000 - $133,000) + $1,718,000 = $1,709,000.
I hope this helps! Let me know if you have any further questions.