COMM305

INTRODUCTION TO MANAGERIAL ACCOUNTING

MIDTERM 1 PRACTICE PROBLEMS

Fall 2021

ISMAHELPS

WRITTEN BY ISMAIL FRANCILLON

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Computing Ending Amount of Raw Materials

At May 31, 2020, Coronado Inc. has $4700 in beginning raw materials, $6100 of direct
labour. If manufacturing overhead was $10800, total manufacturing costs was $50700,
and total raw material purchases were $35600, how much is ending amount of raw
materials?

Computing Cost of Goods Manufactured

Crane Combines, Inc. has $3500 of finished goods inventory as of December 31, 2020. If
beginning finished goods inventory was $1500 and cost of goods sold was $7500, how
much would Crane report for cost of goods manufactured?

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Computing Ending Amount of Raw Materials

The controller of Gutierrez Industries has collected the following monthly expense data
for use in analyzing the cost behaviour of maintenance costs. Determine the fixed and
variable cost components using the high-low method.

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Journal Entries for Raw Materials & WIP

In January, Reyes Tool & Die requisitions raw materials for production as follows: Job 1
$910, Job 2 $1,700, Job 3 $720, and general factory use $700.

Prepare a summary journal entry to record raw materials used.

Computing Total Manufacturing Costs

Concord Company incurred direct materials costs of $87000 during the year.
Manufacturing overhead applied was $82000 and is applied based on direct labour costs.
The predetermined overhead rate is 80%. How much are Concord Company’s total
manufacturing costs for the year?

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Comprehensive CGM Question

Tombert Company is a manufacturer of computers. Its controller resigned in October

2020. An inexperience assistant accountant has prepared the following income
statement for the month of October 2020.

TOMBERT COMPANY
Income Statement
For the Month Ended October 31, 2020
Sales (net) $780,000
Less: Operating Expenses
Raw Materials Purchases $264,000
Direct Labour Cost $190,000
Advertising Expense $90,000
Selling & Admin Salaries $75,000
Rent on Factory Facilities $60,000
Depreciation on Sales Equipment $45,000
Depreciation on Factory Equipment $31,000
Indirect Labour Cost $28,000
Utilities Expense $12,000
Insurance Expense $8,000 $803,000
Net Loss $(23,000)

Prior to October 2020, the company had been profitable every month. The company's
president is concerned about the accuracy of the income statement. As his friend, he has
asked you to review the income statement and make necessary corrections. After
examining other manufacturing cost data, you have acquired the following additional
information.

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Also, the inventory balances at the beginning and end of October were as follows:

October 1 October 31

Raw Materials $18,000 $29,000

Work In Process $16,000 $14,000

Finished Goods $30,000 $45,000

Only 75% of the utilities expense and 60% of the insurance expense apply to factory
operations. The remaining amounts should be charged to selling and administrative
activities.

Requirements:

a. Prepare a schedule of the cost of goods manufactured for October 2020.

b. Prepare a correct income statement for October 2020.

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Comprehensive Process Cost-Accounting Question

A department of Nike Inc. has the following production and cost data for September.

Production: Beginning work in process of 2,000 units that are 100% complete in terms of
materials and 20% complete in terms of conversion costs; 8,000 units started and
finished; and 1,000 units in ending work in process that are 100% complete in terms of
materials and 40% complete in terms of conversion costs.

Manufacturing costs: Work in process, September 1, $15,200; materials added $63,000;

labour and overhead, $143,000.

Nike Inc. uses the FIFO method to calculate equivalent units.

Requirements:

a. Prepare a full production cost report under the FIFO for the month of September.

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Comprehensive Job-Order Cost Accounting Problem

For the year ended December 31, 2016. Nike INC. had the following data on its job cost
sheets:

JOB NUMBER & SPECIFICATIONS DIRECT MATERIALS DIRECT LABOUR MANUFACTURING OVERHEAD

Beginning Balance,
1,000 $ 25,200.00 $ 24,900.00 $ 29,800.00
as per January 1st, 2016

Costs Incurred During the Year $ 30,100.00 $ 35,900.00 $ 43,500.00

Beginning Balance,
1,001 $ 11,400.00 $ 18,900.00 $ 22,100.00
as per January 1st, 2016

Costs Incurred During the Year $ 43,400.00 $ 48,400.00 $ 57,900.00

Beginning Balance,
1,002 $ - $ - $ -
as per January 1st, 2016

Costs Incurred During the Year $ 48,300.00 $ 55,100.00 $ 66,800.00

Consider the following information:

• Beginning balance for raw materials inventory was $15,400. Also, Nike INC.
purchased $140,800 of raw materials during the year.
• Beginning balance for finished goods consisted of Job #998 for $87,300 and Job
#999 for $92,100.
• Job #1000 and Job #1001 were completed during the year.
• Job #998, 999 & 1001 were sold on account for $530,100.
• Manufacturing overhead actually incurred was $114,600.
• Other manufacturing overhead included indirect materials for $13,900, indirect
labour for $19,500, and depreciation on Nike’s factory for $7,800.

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Requirements:

1. Calculate cost of completed goods

2. Calculate ending work in process inventory
3. Calculate cost of goods manufactured
4. Calculate cost of goods sold
5. Calculate under- or over-applied manufacturing overhead
6. Calculate gross profit

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All standardized learning material provided on this document are free-of-charge