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Folk Exam Questions - Chapter 1 1.

The following data (in thousands of dollars) have been taken from the accounting records of Davis Corporation for the just completed year !dministrative e"penses Direct labor 'inished goods inventory( beginning 'inished goods inventory( ending *anufacturing overhead -urchases of raw materials .aw materials inventory( beginning .aw materials inventory( ending /ales /elling e"penses 2ork in process inventory( beginning 2ork in process inventory( ending # $%% &%% )&% $)% +,% )&% 1$% ,&% 0(+$% 1$% ,&% ,%%

2hat was the cost of the raw materials used in production during the year (in thousands of dollars)3 Solution: .aw materials inventory( beginning -urchases of raw materials 4ess raw materials inventory( ending .aw materials used in production #1$% )&% (,&%) #0$%

,. The following data (in thousands of dollars) have been taken from the accounting records of Davis Corporation for the just completed year !dministrative e"penses Direct labor 'inished goods inventory( beginning 'inished goods inventory( ending *anufacturing overhead -urchases of raw materials .aw materials inventory( beginning .aw materials inventory( ending /ales /elling e"penses 2ork in process inventory( beginning 2ork in process inventory( ending # $%% &%% )&% $)% +,% )&% 1$% ,&% 0(+$% 1$% ,&% ,%%

2hat was the cost of goods manufactured (finished) for the year (in thousands of dollars)3 Solution: 2ork in process inventory( beginning .aw materials used in production (calculated above) Direct labor *anufacturing overhead Total manufacturing costs 4ess work in process inventory( ending Cost of goods manufactured # ,&% 0$% &%% +,% ,(0$% (,%%) #,(1$%

0. The following data (in thousands of dollars) have been taken from the accounting records of Davis Corporation for the just completed year !dministrative e"penses Direct labor 'inished goods inventory( beginning 'inished goods inventory( ending *anufacturing overhead -urchases of raw materials .aw materials inventory( beginning .aw materials inventory( ending /ales /elling e"penses 2ork in process inventory( beginning 2ork in process inventory( ending # $%% &%% )&% $)% +,% )&% 1$% ,&% 0(+$% 1$% ,&% ,%%

2hat was the cost of goods sold for the year (in thousands of dollars)3 Solution: 'inished goods inventory( beginning Cost of goods manufactured (calculated above) 4ess finished goods inventory( ending Cost of goods sold ). # )&% ,(1$% ($)%) #,(%%%

The following data (in thousands of dollars) have been taken from the accounting records of Davis Corporation for the just completed year. (5ote that this is the same data as that provided for the 6uestion above.) !dministrative e"penses Direct labor # $%% &%%

'inished goods inventory( beginning 'inished goods inventory( ending *anufacturing overhead -urchases of raw materials .aw materials inventory( beginning .aw materials inventory( ending /ales /elling e"penses 2ork in process inventory( beginning 2ork in process inventory( ending

,&% $)% +,% )&% 1$% ,&% 0(+$% 1$% ,&% ,%%

2hat was the net income for the year (in thousands of dollars)3 Solution: /ales Cost of goods sold (calculated above) 7ross profit 8perating e"penses !dministrative e"penses !dmin istrativ e e"pens es 1$% #0(+$% ,(%%% 1(+$% #$%%

/elling e"penses 5et income

(1(1$%) # &%%