Case Study 1 Managerial Accounting

In: Business and Management

Submitted By bh90210
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The following cost items are needed before a schedule of cost of goods manufactured can be prepared: Materials used in production: Prime Costs $545,000 Less Direct Labor Cost $220,000 Direct Materials Cost $325,000 Manufacturing Overhead Cost: Direct Labor Cost/ Percentage of Conversion Cost: rounded to nearest dollar $628,571 ( this is total conversion cost) 100%-65% = 35% Conversion Cost $628,571 Less Direct Labor Cost $220,000 Manufacturing Overhead $408,571 Cost of Goods Manufactured: Cost of Goods Available for Sale $1,020,000 Less: finished goods inventory, beginning 35,000 Cost of Goods Manufactured $985,000 The easiest way to proceed from this point is to place all of the amounts that are known in a partially completed schedule of cost of goods manufactured and a partially completed income statement. Then fill in the missing amounts by analyzing the available data.

Direct Materials: Raw Materials Inventory, beginning $41,000 Add: Purchases of Raw Materials 325,000 Raw Materials Available for use 366,000 Deduct: Raw Materials inventory, ending $41,000 Raw Materials Used in Production ( See above) 325,000 Direct Labor Cost 220,000 Manufacturing Overhead Cost (See Above) 408,571 Total Manufacturing Costs 953,571 Add: Work in Process inventory, beginning 56,000 1,009,571 Deduct: Work in Process inventory, ending $24,571 Cost of Goods Manufactured $985,000 Therefore, A is Raw…...

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