TUGAS 1

1. Sterling Company manufactures laundry detergent. At the beginning of February, the

following information was supplied by its accountant:
Raw materials inventory $73,000
Work-in-process inventory 80,400
Finished goods inventory 62,000
During February, direct labor cost was $210,400, raw materials’ purchases were
$301,800, and the total overhead cost was $478,590. The inventories at the end of
February were :
Raw materials inventory $ 56,000
Work-in-process inventory 103,000
Finished goods inventory 95,240
Required
1. Prepare a statement of cost of goods manufactured for February.
2. Prepare a statement of cost of goods sold for February.

2. Mellon Company, a manufacturing firm, has supplied the following information from
its accounting records for the year 2008 (in thousands of dollars):
Purchases of raw materials $76,000
Direct labor cost 52,500
Supplies used 5,300
Factory insurance 1,050
Commissions paid 7,500
Factory supervision 9,675
Advertising 2,400
Material handling 11,000
Work-in-process inventory, December 31, 2007 47,500
Work-in-process inventory, December 31, 2008 42,000
Materials inventory, December 31, 2007 10,400
Materials inventory, December 31, 2008 28,500
Finished goods inventory, December 31, 2007 20,055
Finished goods inventory, December 31, 2008 10,750
Required
1. Prepare a statement of cost of goods manufactured.
2. Prepare a statement of cost of goods sold.
3. What was total prime cost for 2008? Total conversion cost?

3. Kylie Hepworth has been operating a beauty shop in a college town for the past 10
years. Recently, Kylie rented space next to her shop and opened a tanning salon. She
anticipated that the costs for the tanning service would be primarily fixed but found
that tanning salon costs increased with the number of appointments. Costs for this
service over the past eight months are as follows:
Month Tanning Appointments Total Cost
January 700 $1,758
February 2,000 2,140
March 3,100 2,790
April 2, 500 2,400
May 1, 500 1,800
June 2,300 2,275
July 2,150 2,200
August 3,000 2,640
Required
1. Which month represents the high point? The low point?
2. Using the high-low method, compute the variable rate for tanning. Compute the
fixed cost per month.
3. Using your answers to Requirement 2, write the cost formula for tanning services.
4. Calculate the total predicted cost of tanning services for September for 2,500
appointments using the formula found in Requirement 3. Of that total cost, how much
is the total fixed cost for September? How much is the total predicted variable cost for
September?