Chapter 1: Managerial accounting

Pertains to subunits of the business. Very detailed. Extends beyond double-entry accounting to
any relevant data. Evaluated based on relevance to decisions. No independent audits.
Manufacturing costs
1. Direct materials
 Raw materials are basic materials and parts used in manufacturing process
 Raw materials that can be physically and directly associated with finished goods
are direct materials: sản phẩm đã qua sản xuất
 Inventory (materials, merchandise, finished goods)
2. Indirect Materials: than đá, xăng, dầu
Have one of two characteristics
 Not physically part of finished product
 Are impractical to trace to finished product because their association with finished
product is too small in terms of cost
3. Direct Labor
Work of factory employees that can be physically and directly associated with converting
raw materials into finished goods.
Indirect Labor: những người không tham gia trực tiếp vào sản xuất (chef, bartender...)
 Work of factory employees that has no association with finished product or
 which is impractical to trace costs to goods produced
4. manufactoring overheads
 Costs indirectly associated with manufacturing the finished product
 All manufacturing costs except direct materials and direct labor
 Also called factory overhead, indirect manufacturing costs, or burden
5. Product cost versus priod cost
EXERCISE CHAP 1
CE 1-1
Manufacturing cost data for Banta Company are presented below.
Indicate the missing amounts for each letter (a) through (i).
Option A Option B Option C
Direct materials used $ (a) 1775,575 – $ 85,500 $ 78,050
47,000 – 46,500 =
82,075
Direct labor 47,000 46,000 (g) 178,375 - 78,050
- 47,750 = 52,575
Manufacturing 46,500 45,500 47,750
overhead
Total manufacturing 175,575 (d) 85,500 + 46,000 178,375
costs + 45,500 = 177,000
Work in process (b)197,075 – 21,500 (h) 199,875 -
1/1/20 175,575 = 21,500 178,375 = 21,500
Total cost of work in 197,075 (e) 177,000 + 199,875
process 21,500 = 198,500
Work in Process (c)197,075 – 35,231 35,751
12/31/20 162,844 = 34,231
Cost of goods 162,844 (f) 198,500 – 35,231 (i) 199,875 - 35,751
manufactured = 163,269 = 164,124
Banta Company must choose between options A, B and C. Evaluate the three options and
determine which one is in the best interest of Banta Company. Write a brief paragraph to
explain your reasoning.
Option A uses moderately priced materials from a supplier that usually has the quantities
needed by Banta.

CE 1-2
A, Prepare the cost of goods manufactured schedule for the month ended September 30, 2020.
Williams company
Cost of goods manufactured schedule
For the month ended September 30
Work in process, sep 1 $ 7,500
Direct materials
Raw materials inventory, sep 12,000
1
Raw materials purchased 62,500
Total raw materials available 74,000
 for use
Less: Raw materials, sep 31 11,300
Direct materials used 63,200
Direct labour 51,000
Manufacturing
overhead
indirect labour 6,500
factory insurance 5,000
factory insurance 6,000
machinery repairs 2,800
factory utilities 3,600
miscellaneous factory costs 1,750
Total manufacturing overhead 25,650
Total manufacturing 139,850
cost
Total cost of work in 147,350
process
Less: Work in process inventory, 5,000
sep 31
Cost of goods 142,350
manufactured
B, Show the presentation of the ending inventories on September 30, 2020, balance sheet.
Williams company
Balance sheet (partial)
September 30, 2020
Current assets
Inventory
Finished goods 12,000
Work in process 5,000
Raw materials 11,300
Total current assets 28,300

C, Williams Company is considering the purchase of a new automated assembly line for its
factory. The purchase would result in several changes in Williams’ cost structure. Both
direct labor and indirect labor would decrease by 40%. Factory insurance would
increase to $8,000, machinery depreciation would double, machinery repairs would
decrease to $500, utilities would decrease to $2,500 and miscellaneous factory costs
would increase to $1,850. Materials usage would remain at current levels.

Analyze the new purchase by preparing a cost of goods manufactured schedule for
September 30, 2020 using the new data. Should Williams Company make this
purchase? Explain the factors that should be considered in the decision?

Williams company
Cost of goods manufactured schedule (purchase new)
For the month ended September 30, 2020
Work in process $7,500
Direct materials
Raw materials, sep 1 12,000
Raw materials purchased 62,500
Total raw materials 74,500
available for use
Less: raw material, sep 30 11,300
Direct material used 63,200
Direct labour 30,600 (=51,000 x
60%)
Manufacturing
overhead
Indirect labour 3,900 (=6,500 x
60%)
Factory insurance 8,000
Machinery depreciation 12,000 (=6,000 x 2)
Machinery repairs 500
Factory utilities 2,500
Miscellaneous factory 1,850
costs
Total manufacturing 28,750
overhead
Less: work in 5,000
process, sep 30
Cost of goods 125, 050
manufactured

Cost of goods sold

106. Worth Company reported the following year-end information: beginning work in
process inventory, $180,000; cost of goods manufactured, $816,000; beginning finished
goods inventory, $252,000; ending work in process inventory, $220,000; and ending
finished goods inventory, $264,000. Worth Company's cost of goods sold for the year is
a. $804,000. 252,000 + 816,000 – 264,000 = 804,000
b. $828,000.
c. $776,000.
d. $552,000.
Chapter 2:
Nhiều hơn là overapplied và ngược lại là underapplied
Actual overhead 772,450 but manufactured overhead 775,000 => overapplied
4. 2000+325000-312500=
77. cost of this job (3000 units) = 105,000
FGs on hand = 1,200
105000 / 3000 x 1200 = 42000