University:
California State University, Northridge
Course:
ACCT 230 | Introduction to Managerial Accounting
Academic year:

2024
Views:

224

Pages:

20
Author:

Marely Flores

Chapter 1 Managerial Accounting and Cost Concepts Part 2 1-23 Learning Objective 4 Prepare an income statement including calculation of the cost of goods sold. 1-24 The Income Statement Cost of goods sold for manufacturers differs only slightly from cost of goods sold for merchandisers. Merchandising Company Cost of goods sold: Beg. merchandise inventory $ 14,200 + Purchases 234,150 Goods available for sale $ 248,350 - Ending merchandise inventory (12,100) = Cost of goods sold $ 236,250 Manufacturing Company Cost of goods sold: Beg. finished goods inv. + Cost of goods manufactured Goods available for sale - Ending finished goods inventory = Cost of goods sold $ 14,200 234,150 $248,350 (12,100) $236,250 1-25 Inventory Flows Beginning balance + Additions to inventory = Ending balance + Withdrawals from inventory 1-27 Quick Check  If your inventory balance at the beginning of the month was $1,000, you bought $100 during the month, and sold $300 during the month, what would be the balance at the end of the month? $1,000 + $100 = $1,100 A. $1,000. $1,100 - $300 = $800 B. $ 800. C. $1,200. D. $ 200. 1-28 Learning Objective 5 Prepare a schedule of cost of goods manufactured. 1-29 Schedule of Cost of Goods Manufactured Calculates the cost of raw materials, direct labor and manufacturing overhead used in production. Calculates the manufacturing costs associated with goods that were finished during the period. 1-30 Schedule of Cost of Goods Manufactured Raw Materials + = – = Beginning raw materials inventory Raw materials purchased Raw materials available for use in production Ending raw materials inventory Raw materials used in production Manufacturing As items are Costs Work removed from In Process raw materials inventory and placed into the production process, they are called direct materials. 1-31 Schedule of Cost of Goods Manufactured Raw Materials + = – = Beginning raw materials inventory Raw materials purchased Raw materials available for use in production Ending raw materials inventory Raw materials used in production Manufacturing Costs Direct materials + Direct labor + Mfg. overhead = Total manufacturing costs Work Conversion In Process costs are costs incurred to convert the direct materials into a finished product. As items are removed from raw materials inventory and placed into the production process, they are called direct materials. 1-32 Schedule of Cost of Goods Manufactured Raw Materials + = – = Beginning raw materials inventory Raw materials purchased Raw materials available for use in production Ending raw materials inventory Raw materials used in production Manufacturing Costs Direct materials + Direct labor + Mfg. overhead = Total manufacturing costs Work In Process Beginning work in process inventory + Total manufacturing costs = Total work in process for the period – Ending work in All manufacturing costs incurred process inventory during the period are added to the = Cost of goods manufactured. beginning balance of work in process. 1-33 Schedule of Cost of Goods Manufactured Raw Materials Manufacturing Costs Beginning raw Direct materials materials inventory + Direct labor + Raw materials + Mfg. overhead purchased = Total manufacturing = Raw materials costs available for use in production – Ending raw materials inventory Costs associated with the goods that = Raw materials used are in completed during the period are production transferred to finished goods inventory. Work In Process + = – = Beginning work in process inventory Total manufacturing costs Total work in process for the period Ending work in process inventory Cost of goods manufactured. 1-34 Cost of Goods Sold Work In Process + = – = Beginning work in process inventory Manufacturing costs for the period Total work in process for the period Ending work in process inventory Cost of goods manufactured Finished Goods Beginning finished goods inventory + Cost of goods manufactured = Cost of goods available for sale - Ending finished goods inventory Cost of goods sold 1-35 Manufacturing Cost Flows Costs Balance Sheet Inventories Material Purchases Raw Materials Direct Labor Work in Process Manufacturing Overhead Selling and Administrative Finished Goods Period Costs Income Statement Expenses Cost of Goods Sold Selling and Administrative 1-36 Quick Check  Beginning raw materials inventory was $32,000. During the month, $276,000 of raw material was purchased. A count at the end of the month revealed that $28,000 of raw material was still present. What is the cost of direct material used? A. $276,000 B. $272,000 C. $280,000 D. $ 2,000 1-37 Quick Check  Beginning raw materials inventory was $32,000. During the month, $276,000 of raw material was purchased. A count at the end of the month revealed that $28,000 of raw material was still present. is the cost$of32,000 Beg. What raw materials direct material used? + Raw materials purchased 276,000 A. $276,000 = Raw materials available for use in production $ 308,000 B. $272,000 – Ending raw materials C. $280,000 inventory 28,000 D. $ 2,000 = Raw materials used in production $ 280,000 1-38 Quick Check  Direct materials used in production totaled $280,000. Direct labor was $375,000 and factory overhead was $180,000. What were total manufacturing costs incurred for the month? A. $555,000 B. $835,000 C. $655,000 D. Cannot be determined. 1-39 Quick Check  Direct materials used in production totaled $280,000. Direct labor was $375,000 and Direct Materials $ 280,000 factory overhead was $180,000. What were + Direct Labor 375,000 total manufacturing +costs incurred for the180,000 Mfg. Overhead month? = Mfg. Costs Incurred for the Month $ 835,000 A. $555,000 B. $835,000 C. $655,000 D. Cannot be determined. 1-40 Quick Check  Beginning work in process was $125,000. Manufacturing costs incurred for the month were $835,000. There were $200,000 of partially finished goods remaining in work in process inventory at the end of the month. What was the cost of goods manufactured during the month? A. $1,160,000 B. $ 910,000 C. $ 760,000 D. Cannot be determined. 1-41 Quick Check  Beginning work in process was $125,000. Manufacturing costs incurred for the month were $835,000. There were $200,000 of partially finished goods remaining in work in work in process inventory at the Beginning end of month.$ 125,000 processthe inventory + Mfg. costs incurred What was the cost of goods manufactured for the period 835,000 during the month? = Total work in process during the period $ 960,000 A. $1,160,000 – Ending work in B. $ 910,000 process inventory 200,000 C. $ 760,000 = Cost of goods manufactured $ 760,000 D. Cannot be determined. 1-43 Quick Check  Beginning finished goods inventory was $130,000. The cost of goods manufactured for the month was $760,000. The ending finished goods inventory was $150,000. What was the cost of goods sold for the month? A. $ 20,000. $130,000 + $760,000 = $890,000 B. $740,000. $890,000 - $150,000 = $740,000 C. $780,000. D. $760,000.