Chapter 2 - Lab

1/13/24, 3:11 PM Chapter 2-Gurjant Singh
Instructor: Mouna Selmi

Student: Gurjant Singh
Course: Horngren's Cost Accounting: A Assignment: Chapter 2
Date: 01/13/24
Managerial Emphasis, 9th Edition
1. Roslyn Heninger is awell-known software engineer. Her specialty is writing software code used in maintaining the security of credit card
information. Heninger is approached by the Elliott Commerce Group(ECG). It offers to pay her $165,000 for the right to use her code
under licence in its eprocurement software package. Heninger rejects this offer because it provides her with no additional benefits if the
eprocurement package is a runaway success. Both parties eventually agree to a contract in which ECG pays Heninger a flat fee of
$165,000 for the right to use her code in up to 11,000 packages. If eprocurement sells more than 11,000 packages, Heninger receives
$10.50 for each package sold beyond the 11,000 level.
Required1
Click the icon to see the Worked Solution.
Requirement 1. What is the unit cost of ECG forHeninger's software code included in its eprocurement package if it sells(a) 2,400, (b)
6,400, (c) 11,000, and(d) 16,500 packages? Comment on the results.
Find the unit cost for each number of packages sold. (Round your answers to the nearest cent asneeded.)
Number of packages sold Cost per package

(a) 2,400 $ 68.75
(b) 6,400 $ 25.78
(c) 11,000 $ 15.00
(d) 16,500 $ 13.50
Comment on the results from the previous step. Choose the correct answer below.
A. The unit cost increases as the number of packages sold increases. The total cost is a variable cost based on the number of packag
B. The unit cost decreases as the number of packages sold increases until 11,000, and then the unit cost increases. The total cost is a
C. The unit cost decreases as the number of packages sold increases. The total cost is a fixed cost up to 11,000 units and then is a va
D. The unit cost is fixed as the number of packages sold increases until 11,000, and then the unit cost decreases. The total cost is a va
Requirement 2. For prediction ofECG's total cost of usingHeninger's software code ineprocurement, which unit cost(if any) of(a) to(d)
in requirement 1 would you recommend ECGuse? Explain.
A. ECG should use the unit cost from situation(b) because it has the lowest unit cost.
B. ECG should use the unit cost from situation(a) because it has the lowest unit cost.
C. ECG should use the unit cost from situation(d) because it has the lowest unit cost.
D. ECG should use the unit cost from situation(c) because it has the lowest unit cost.
E. ECG should not use any of the unit costs because the total cost is a fixed amount up to 11,000 units and then is a mixed cost beyon
1: Required
1. What is the unit cost of ECG forHeninger's software code included in its eprocurement package if it sells(a) 2,400, (b) 6,400, (c)
11,000, and(d) 16,500 packages? Comment on the results.
2. For prediction ofECG's total cost of usingHeninger's software code ineprocurement, which unit cost(if any) of(a) to(d) in
requirement 1 would you recommend ECGuse? Explain.
https://tdx.acs.pearsonprd.tech/api/v1/print/highered 1/22
YOUANSWERED: Number of packages sold Cost per package

(a) 2,400 nothing
(b) 6,400 nothing
(c) 11,000 nothing
(d) 16,500 nothing
B.
B.
2. Define cost object and give three examples.
A. A cost object is anything for which a separate measurement of costs is desired. Examples include aproduct, aservice, and a custo
B. A cost object is a resource sacrificed or forgone to achieve a specific objective. Examples include directmaterials, directlabour, and
C. A cost object is a cost incurred(historical or pastcost), as distinguished from a budgetedcost, which is a predicted or
forecasted cost (a futurecost). Examples includematerials, labour, and overhead.
D. None of the above
YOUANSWERED: B.
3. Toronto Office Equipment manufactures and sells metal shelving. It began operations on January1, 2022.
2
(Click the icon to view the costs incurred during 2022.) 3(Click the icon to view the inventorydata.)
Revenues in 2022 were $420,200. The selling price per unit and the purchase price per kilogram of direct materials were stable throughout
the year. Thecompany's ending inventory of finished goods is carried at the average unit manufacturing costs for 2022. Finished goods
inventory at December31, 2022, was $28,800.
Required4
Requirement 1. Calculate direct materialsinventory, totalcost, December31, 2022.

Determine the formula to calculate the total cost of direct materials inventory at December31, 2022.
Ending direct materials in kilograms x Direct materials cost per kilogram = Ending direct materials total cost
The total cost of ending direct materials inventory is $ 1,400 .
Requirement 2. Calculate finished goodsinventory, totalunits, December31, 2022.

Before we calculate the units for ending finishedgoods, we will first calculate the total cost of goods manufactured. (Only complete the
necessary answerboxes.)
Manufacturing costs for 107,500 units

Variable Fixed Total
Direct materials used $ 150,500 $ 150,500
Direct manufacturing labour costs 34,500 34,500
Plant energy costs 2,000 2,000
Indirect manufacturing labour costs 18,000 $ 14,000 32,000
Other indirect manufacturing costs 7,000 32,000 39,000
$ 212,000 $ 46,000 $ 258,000

Cost of goods manufactured
Select the labels used to calculate ending finished goods inventory in totalunits, and then calculate the finished goods inventory in total
units at December31, 2022. (Abbreviations used: manuf. = manufactured; kg= kilograms. Hold all decimals in interim calculations. Round
your final answer to the nearest wholeunit.)
Ending
finished
goods
inventory
Ending finished goods (dollars) / ( Total cost of goods manuf. / Total units produced ) = in units
$ 28,800 / ( $ 258,000 / 107,500 ) = 12,000
Requirement 3. Calculate selling price per unit in 2022.

Determine the formula to calculate the selling price per unit.
Total revenues / Total units sold = Selling price per unit
Now, calculate the selling price per unit. (Round your answer to the nearestcent.)
The 2022 selling price is $ 4.40 per unit.
Requirement 4. Calculate operating income for 2022.

Finish the income statement by entering the amounts and calculating the operatingincome/(loss). (For amounts with a$0 balance, make
sure to enter"0" in the appropriate cell. Use parentheses or a minus sign for a netloss.)
Toronto Office Equipment

Income Statement
For the Year Ended December 31, 2022
Revenues $ 420,200
Cost of goods sold:

Beginning finished goods, Jan 1, 2022 $ 0
Cost of goods manufactured 258,000
Cost of goods available for sale 258,000
Ending finished goods, Dec 31, 2022 28,800 229,200
Gross margin 191,000
Operating costs:
Marketing, distribution, and customer-service costs 168,000
Administrative costs 52,000 220,000
$ (29,000)
Operating income/(loss)
2: Costs incurred
Costs incurred for 2022 are as follows(V stands forvariable; F stands forfixed):
Direct materials used costs $ 150,500 V

Direct manufacturing labour costs 34,500 V
Plant energy costs 2,000 V
Indirect manufacturing labour costs 18,000 V
Indirect manufacturing labour costs 14,000 F
Other indirect manufacturing costs 7,000 V
Other indirect manufacturing costs 32,000 F
Marketing, distribution, and customer-service costs 127,000 V
Marketing, distribution, and customer-service costs 41,000 F
Administrative costs 52,000 F
Variable manufacturing costs are variable with respect to units produced. Variablemarketing, distribution, andcustomer-service costs are
variable with respect to units sold.
3: Inventory data
Inventory data are asfollows:
Beginning, Ending,
January 1, 2022 December 31, 2022
Direct materials 0 kilograms 2,000 kilograms
Work in process 0 units 0 units
Finished goods 0 units ? units
Production in 2022 was 107,500 units. Two kilograms of direct materials is used to make one unit of finished product.
4: Required
1. Calculate direct materialsinventory, totalcost, December31, 2022.
2. Calculate finished goodsinventory, totalunits, December31, 2022.
3. Calculate selling price per unit in 2022.
4. Calculate operating income for 2022.
YOUANSWERED: nothing x nothing = Ending direct materials total cost
55

Direct materials used nothing nothing nothing

Direct manufacturing labour costs nothing nothing nothing
Plant energy costs nothing nothing nothing
Indirect manufacturing labour costs nothing nothing nothing
Other indirect manufacturing costs nothing nothing nothing
nothing nothing nothing

nothing / ( nothing / nothing ) = Ending finished goods inventory in unit
nothing / ( nothing / nothing ) = nothing
nothing / nothing = Selling price per unit
33
Toronto Office Equipment

Income Statement
nothing nothing
Cost of goods sold:
nothing nothing
nothing nothing
nothing nothing
nothing nothing
Operating costs:
nothing nothing
nothing
4. Soo Office Equipment manufactures and sells metal shelving. It began operations on January1, 2022.
5
Required7
Requirement 1. Calculate direct materialsinventory, totalcost, December31, 2022.

Determine the formula to calculate the total cost of direct materials inventory at December31, 2022.
Ending direct materials in kilograms x Direct materials cost per kilogram = Ending direct materials total cost
The total cost of ending direct materials inventory is $ 1,400 .
Requirement 2. Calculate finished goodsinventory, totalunits, December31, 2022.

Before we calculate the units for ending finishedgoods, we will first calculate the total cost of goods manufactured. (Only complete the
necessary answerboxes.)

Direct materials used $ 140,000 $ 140,000
Direct manufacturing labour costs 30,000 30,000
Plant energy costs 5,000 5,000
Indirect manufacturing labour costs 10,000 $ 16,000 26,000
Other indirect manufacturing costs 8,000 24,000 32,000
$ 193,000 $ 40,000 $ 233,000

Select the labels used to calculate ending finished goods inventory in totalunits, and then calculate the finished goods inventory in total
units at December31, 2022. (Abbreviations used: manuf. = manufactured; kg= kilograms. Hold all decimals in interim calculations. Round
your final answer to the nearest wholeunit.)
Ending
finished
goods
inventory
Ending finished goods (dollars) / ( Total cost of goods manuf. / Total units produced ) = in units
$ 20,970 / ( $ 233,000 / 100,000 ) = 9,000
Requirement 3. Calculate selling price per unit in 2022.

Determine the formula to calculate the selling price per unit.
Total revenues / Total units sold = Selling price per unit
Now, calculate the selling price per unit. (Round your answer to the nearestcent.)
The 2022 selling price is $ 4.80 per unit.
Requirement 4. Calculate operating income for 2022.

Soo Office Equipment

Income Statement
Revenues $ 436,800
Cost of goods sold:

Beginning finished goods, Jan 1, 2022 $ 0
Operating costs:
$ 11,920
5: Costs incurred

6: Inventory data
Beginning, Ending,

7: Required
1. Calculate direct materialsinventory, totalcost, December31, 2022.
2. Calculate finished goodsinventory, totalunits, December31, 2022.
3. Calculate selling price per unit in 2022.
4. Calculate operating income for 2022.
YOUANSWERED: nothing x nothing = Ending direct materials total cost
55

Direct materials used nothing nothing nothing

Direct manufacturing labour costs nothing nothing nothing
Plant energy costs nothing nothing nothing
Indirect manufacturing labour costs nothing nothing nothing
Other indirect manufacturing costs nothing nothing nothing

nothing / ( nothing / nothing ) = Ending finished goods inventory in unit
nothing / ( nothing / nothing ) = nothing
nothing / nothing = Selling price per unit
11
Soo Office Equipment

Income Statement
nothing nothing
Cost of goods sold:
nothing nothing
nothing nothing
nothing nothing
nothing nothing
Operating costs:
nothing nothing
nothing
5. Alberta Office Equipment manufactures and sells metal shelving. It began operations on January1, 2022.
8
10
(Click the icon to view additionalinformation.)
Required11
Requirement 1. Calculate the units of finished goods produced in 2023.
Target ending finished goods, Dec. 31, 2023 10,000 units
Forecasted sales for 2023 116,000 units
Total finished goods required in 2023 126,000 units
Beginning finished goods, Jan. 1, 2023 7,000 units
119,000
Finished goods production required in 2023 units
Requirement 2. Prepare a budgeted statement of comprehensive income for 2023.

Alberta Office Equipment

Budgeted Statement of Comprehensive Income
Revenues $ 510,400
Cost of goods sold:

Beginning finished goods, Jan 1, 2023 $ 15,400
Operating costs:
180,037
$ 21,635
8: Costs incurred

9: Inventory data
Beginning, Ending,

10: Additional information

Assume management predicts that the selling price per unit and variable cost per unit will be the same in 2023 as in 2022. Fixed
manufacturing costs andmarketing, distribution, andcustomer-service costs in 2023 are also predicted to be the same as in 2022. Sales in
2023 are forecast to be 116,000 units. The desired ending inventory of finishedgoods, December31, 2023, is 10,000 units. Assume zero
 
ending inventories of both direct materials and work in process. Thecompany's ending inventory of finished goods is carried at the average
unit manufacturing costs for 2023. The company uses thefirst-in, first-out inventory method. Management has asked that you prepare a
budgeted statement of comprehensive income for 2023. On December31, 2022, finished goods inventory is 7,000 units.
11: Required
1. Calculate the units of finished goods produced in 2023.
2. Prepare a budgeted statement of comprehensive income for 2023.
YOUANSWERED: Target ending finished goods, Dec. 31, 2023 nothing units
Forecasted sales for 2023 nothing units
Total finished goods required in 2023 nothing units
Beginning finished goods, Jan. 1, 2023 nothing units
nothing
Finished goods production required in 2023 units
Alberta Office Equipment

Budgeted Statement of Comprehensive Income
nothing nothing
Cost of goods sold:
nothing nothing
nothing nothing
nothing nothing
nothing nothing
Operating costs:
nothing nothing
nothing
6. Consider the following account balances(in thousands) for the Rouse Company:
12
(Click the icon to view the accountbalances.)
Required
1. Prepare a schedule of cost of goods manufactured for 2022.
2. Revenues in 2022 were $345 million. Prepare the 2022 statement of comprehensive income.
Requirement 1. Prepare a schedule of cost of goods manufactured for 2022.

Begin by preparing the schedule of cost of goods manufactured(in thousands). Start with the direct materials and labourcosts, continue
with the indirect manufacturingcosts, and complete the schedule by calculating cost of goods manufactured.
Rouse Company
Schedule of Cost of Goods Manufactured
For the Year Ended December 31, 2022 (in thousands)
Direct materials costs:

Beginning inventory, Jan 1, 2022 $ 22,000
Purchases of direct materials 77,000
Cost of direct materials available for use 99,000
Ending inventory, Dec 31, 2022 29,000
Direct materials used $ 70,000

Direct manufacturing labour costs 21,000
Indirect manufacturing costs:

Plant insurance $ 6,000
Indirect manufacturing labour costs 18,000
Depreciation—plant, building, and equipment 12,000
Repairs and maintenance—plant 5,000 41,000
Manufacturing costs incurred during 2022 132,000
Add: Beginning work-in-process inventory, Jan 1, 2022 23,000
Total manufacturing costs to account for 155,000
Less: Ending work-in-process inventory, Dec 31, 2022 28,000
$ 127,000
Requirement 2. Revenues in 2022 were $345 million. Prepare the 2022 statement of comprehensive income.
Prepare the statement of comprehensive income for Rouse Company(in thousands). (Use parentheses or a minus sign for
operatingloss.)
Rouse Company
Statement of Comprehensive Income
Revenues $ 345,000
Cost of goods sold:

Beginning finished goods, Jan 1, 2022 $ 15,000
Ending finished goods, Dec 31, 2022 25,000
Cost of goods sold 117,000
Operating costs:
General and administrative costs 27,000
Total operating costs 119,000
$ 109,000
12: Account balances

Beginning of End of
2022 2022
Direct materials inventory $ 22,000 $ 29,000
Work-in-process inventory 23,000 28,000
Finished goods inventory 15,000 25,000
Purchases of direct materials 77,000
Direct manufacturing labour 21,000
Indirect manufacturing labour 18,000
Plant insurance 6,000
Depreciation—plant building and equipment 12,000
Repairs and maintenance—plant 5,000
General and administrative costs 27,000
YOUANSWERED: Rouse Company

Schedule of Cost of Goods Manufactured
Direct materials costs:

Beginning inventory, Jan 1, 2022 nothing
nothing nothing
Indirect manufacturing labour costs nothing
Plant insurance nothing
Direct materials used nothing

nothing nothing
Indirect manufacturing costs:

Ending work-in-process inventory, Dec. 31, 2022 nothing
Manufacturing costs incurred during 2022 nothing
Add: Ending inventory, Dec 31, 2022 nothing
Total manufacturing costs to account for nothing
Less: Cost of direct materials available for use nothing
nothing
Rouse Company
Statement of Comprehensive Income
Cost of goods manufactured nothing

Cost of goods sold:
nothing nothing
nothing nothing
nothing nothing
nothing nothing
Cost of goods sold nothing
nothing nothing
Operating costs:
nothing nothing
nothing nothing
Total operating costs nothing
nothing
7. An auditor for the Canada Revenue Agency is trying to reconstruct some partially destroyed records of two taxpayers. For each case in the
accompanyinglist, find the unknowns designated by capital letters(figures are inthousands).
13
(Click the icon to view therecords.)
Required
For each of thecases, find the unknowns designated by the letters A and B for Case 1 and C and D for Case 2.
Case1: Find the unknowns designated by the letters A and B.
First, solve for A. Cost of goods sold.
Revenues $ 44,000
Cost of goods sold (29,200)
$ 14,800
Gross margin
Next, complete the following schedule of cost of goods manufactured. (Complete all answer boxes. Enter a"0" for any zerobalances.)

Indirect manufacturing costs 11,200
Total manufacturing costs incurred $ 27,800
Work in process, January 1, 2021 2,500
Total manufacturing costs to account for $ 30,300
Work in process, December 31, 2021 0
$ 30,300
Now, use the cost of goods sold formula to solve for B. Finished goodsinventory, December31, 2021.
Finished goods inventory, January 1, 2021 $ 2,000
Cost of goods available for sale $ 32,300
Finished goods inventory, December 31, 2021 (3,100)
$ 29,200
Cost of goods sold
Case2: Find the unknowns designated by the letters C and D.
First, solve for C. Gross margin.
Revenues $ 54,900
$ 26,900
Gross margin
Next, complete the cost of goods sold formula.
Finished goods inventory, January 1, 2021 $ 10,000
Cost of goods available for sale $ 36,200
Finished goods inventory, December 31, 2021 (8,200)
$ 28,000
Cost of goods sold
Finally, complete the schedule of cost of goods manufactured to solve for D. Manufacturing overhead costs.
Indirect manufacturing costs 9,400
Work in process, January 1, 2021 800
Total manufacturing costs to account for $ 31,000
Work in process, December 31, 2021 (4,800)
$ 26,200
13: Records
Case 1 Case 2
(in thousands)
Accounts receivable, December 31, 2021 $ 6,000 $ 1,620
Cost of goods sold A 28,000
Accounts payable, January 1, 2021 4,200 1,920
Accounts payable, December 31, 2021 2,800 3,010
Finished goods inventory, December 31, 2021 B 8,200
Gross margin 14,800 C
Work in process, January 1, 2021 2,500 800
Work in process, December 31, 2021 0 4,800

Finished goods inventory, January 1, 2021 2,000 10,000
Direct materials used 12,000 13,000
Direct manufacturing labour 4,600 7,800

Indirect manufacturing costs 11,200 D
Purchases of direct material 12,500 9,500
Revenues 44,000 54,900
Accounts receivable, January 1, 2021 2,500 2,400
YOUANSWERED: nothing nothing
nothing nothing
nothing
Gross margin
nothing nothing
nothing nothing
nothing nothing
Total manufacturing costs incurred nothing
nothing nothing
nothing nothing
nothing
nothing nothing
nothing nothing
Cost of goods available for sale nothing
nothing nothing
nothing
Cost of goods sold
nothing nothing
nothing nothing
nothing
Gross margin
nothing nothing
nothing nothing
Cost of goods available for sale nothing
nothing nothing
nothing
Cost of goods sold
nothing nothing
nothing nothing
nothing nothing
Total manufacturing costs incurred nothing
nothing nothing
nothing nothing
nothing
8. What is the relevantrange? What role does therelevant-range concept play in explaining how costsbehave?
A. The relevant range is the band of normal activity level or volume in which there is a specific relationship between the level of activity
B. The relevant range is the band of normal activity level or volume in which there is no relationship between the level of activity or vol
of activity.
C. The relevant range is the band of normal activity level or volume in which there is a specific relationship between the level of activity
D. The relevant range is the band of normal activity level or volume in which there is an abnormal relationship between the level of act
activity.
YOUANSWERED: B.
9. Holbrook PlasticsInc.'s selected data for the month of August 2022 are shown in the provided table(in millions).
14
(Click the icon to view thedata.)
Required15
Requirement 1. Calculate direct materials inventory on August31, 2022.

Determine the formula and then calculate the direct materials inventory value at August31, 2022. (Work in millions. Use a minus sign or
parentheses for numbers to besubtracted.)
Direct materials inventory, August 1, 2022 $ 115
Direct materials purchased 350
Direct materials available for production 465
Direct materials used (380)
$ 85
Direct materials inventory, August 31, 2022
Requirement 2. Calculate fixed manufacturing overhead costs for August. (Work in millions. Use a minus sign or parentheses for numbers
to besubtracted.)
Total manufacturing overhead costs $ 460
Variable manufacturing overhead costs (240)
$ 220
Fixed manufacturing overhead costs
Requirement 3. Calculate direct manufacturing labour costs for August.

Choose the labels used to calculate direct manufacturing labour cost and then calculate the costs for the month of August. (Work in
millions. Use a minus sign or parentheses for numbers to besubtracted.)
Less: Direct materials used (380)
Total manufacturing overhead costs (460)
$ 730
Direct manufacturing labour costs for August
Requirement 4. Calculate work-in-process inventory on August31, 2022.

Determine the formula and then calculate thework-in-process inventory value at August31, 2022. (Work in millions. Use a minus sign or
parentheses for numbers to besubtracted.)
Work-in-process inventory, August 1, 2022 $ 210
Total manufacturing costs incurred 1,570
Work-in-process available for production 1,780
Cost of goods manufactured (1,690)
$ 90
Work-in-process inventory, August 31, 2022
Requirement 5. Calculate cost of goods available for sale in August.

Select the labels used to calculate cost of goods available for sale and calculate those costs for August. (Work inmillions.)
Finished goods inventory, August 1, 2022 $ 220
$ 1,910
Finished goods available for sale in August
Requirement 6. Calculate finished goods inventory on August31, 2022.

Choose the labels used to calculate finished goods inventory at the end of the period and then calculate the inventory value at August31,
2022. (Work in millions. Use a minus sign or parentheses for numbers to besubtracted.)
Finished goods available for sale in August $ 1,910
$ 170
Finished goods inventory, August 31, 2022
14: August 2022 data
Work-in-process inventory, August 1, 2022 $ 210

Direct materials inventory, August 1, 2022 115
Direct materials purchased 350
Direct materials used 380
Variable manufacturing overhead 240
Total manufacturing overhead 460
Total manufacturing costs incurred during August 2022 1,570
Cost of goods sold 1,740
Finished goods inventory, August 1, 2022 220
15: Required
Calculate the followingcosts:
1. Direct materials inventory on August31, 2022.
2. Fixed manufacturing overhead costs for August.
3. Direct manufacturing labour costs for August.
4. Work-in-process inventory on August31, 2022.
5. Cost of goods available for sale in August.
6. Finished goods inventory on August31, 2022.
YOUANSWERED: nothing nothing
nothing nothing
Direct materials available for production nothing
nothing nothing
nothing
Direct materials inventory, August 31, 2022
nothing nothing
nothing nothing
nothing
Fixed manufacturing overhead costs
nothing nothing
Less: nothing nothing
nothing nothing
nothing
Direct manufacturing labour costs for August
nothing nothing
nothing nothing
Work-in-process available for production nothing
nothing nothing
nothing
Work-in-process inventory, August 31, 2022
nothing nothing
nothing nothing
nothing
Finished goods available for sale in August
nothing nothing
nothing nothing
nothing
Finished goods inventory, August 31, 2022
10. TheFremont, California, plant of NUMMI(New United MotorManufacturing, Inc.), a joint venture of General Motors andToyota,
assembles two types of cars(Corollas and GeoPrisms). A separate assembly line is used for each type of car.
Required
Classify each of the following cost itemsas:
a. Direct or indirect(D orI) costs with respect to the type of car assembled(Corolla or GeoPrism).
b. Variable or fixed(V orF) costs with respect to how the total costs of the plant change as the number of cars assembled
changes.(If indoubt, select the cost type based on whether the total costs will change substantially if a large number of cars
areassembled.)
Cost Item (a) D or I (b) V or F
A. Cost of tires used on Geo Prisms. D V
B. Salary of public relations manager for NUMMI plant. I F
C. Annual awards dinner for Corolla suppliers. D F
D. Salary of engineer who monitors design changes on Geo Prism. D F
E. Freight costs of Corolla engines shipped from Toyota City, Japan, to Fremont, California D V
F. Electricity costs for NUMMI plant (single bill covers entire plant). I V
Wages paid to temporary assembly-line workers hired in periods of high production (paid on
G. hourly basis). D V
H. Annual fire-insurance policy cost for NUMMI plant. I F
YOUANSWERED: Cost Item (a) D or

A. Cost of tires used on Geo Prisms. nothing
B. Salary of public relations manager for NUMMI plant. nothing

C. Annual awards dinner for Corolla suppliers. nothing
D. Salary of engineer who monitors design changes on Geo Prism. nothing
E. Freight costs of Corolla engines shipped from Toyota City, Japan, to Fremont, California nothing
F. Electricity costs for NUMMI plant (single bill covers entire plant). nothing
G. Wages paid to temporary assembly-line workers hired in periods of high production (paid on hourly basis). nothing
H. Annual fire-insurance policy cost for NUMMI plant. nothing
 

Chapter 2 - Lab

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1/13/24, 3:11 PM Chapter 2-Gurjant Singh

Instructor: Mouna Selmi

Click the icon to see the Worked Solution.

Number of packages sold Cost per package

(b) 6,400 $ 25.78

(c) 11,000 $ 15.00

(d) 16,500 $ 13.50

YOU​ANSWERED: Number of packages sold Cost per package

2. Define cost object and give three examples.

Requirement 1. Calculate direct materials​inventory, total​cost, December​31, 2022.

The total cost of ending direct materials inventory is ​$ 1,400 .

Requirement 2. Calculate finished goods​inventory, total​units, December​31, 2022.

Manufacturing costs for 107,500 units

Direct materials used $ 150,500 $ 150,500

Direct manufacturing labour costs 34,500 34,500

Plant energy costs 2,000 2,000

Indirect manufacturing labour costs 18,000 $ 14,000 32,000

Other indirect manufacturing costs 7,000 32,000 39,000

$ 212,000 $ 46,000 $ 258,000

Requirement 3. Calculate selling price per unit in 2022.

Total revenues / Total units sold = Selling price per unit

The 2022 selling price is ​$ 4.40 per unit.

Requirement 4. Calculate operating income for 2022.

Toronto Office Equipment

Cost of goods sold:

Cost of goods manufactured 258,000

Cost of goods available for sale 258,000

Ending finished goods, Dec 31, 2022 28,800 229,200

Gross margin 191,000

Administrative costs 52,000 220,000

Direct materials used costs $ 150,500 V

YOU​ANSWERED: nothing x nothing = Ending direct materials total cost

Manufacturing costs for 107,500 units

Direct materials used nothing nothing nothing

Other indirect manufacturing costs nothing nothing nothing

nothing nothing nothing

nothing / ( nothing / nothing ) = Ending finished goods inventory in unit

nothing / ( nothing / nothing ) = nothing

nothing / nothing = Selling price per unit

Toronto Office Equipment

nothing nothing nothing

nothing nothing nothing

Requirement 1. Calculate direct materials​inventory, total​cost, December​31, 2022.

The total cost of ending direct materials inventory is ​$ 1,400 .

Requirement 2. Calculate finished goods​inventory, total​units, December​31, 2022.

Manufacturing costs for 100,000 units

Direct materials used $ 140,000 $ 140,000

Direct manufacturing labour costs 30,000 30,000

Plant energy costs 5,000 5,000

Indirect manufacturing labour costs 10,000 $ 16,000 26,000

Other indirect manufacturing costs 8,000 24,000 32,000

$ 193,000 $ 40,000 $ 233,000

Requirement 3. Calculate selling price per unit in 2022.

Total revenues / Total units sold = Selling price per unit

The 2022 selling price is ​$ 4.80 per unit.

Requirement 4. Calculate operating income for 2022.

Soo Office Equipment

Cost of goods sold:

Cost of goods manufactured 233,000

Cost of goods available for sale 233,000

Ending finished goods, Dec 31, 2022 20,970 212,030

Gross margin 224,770

YOUANSWERED: Number of packages sold Cost per package

Requirement 1. Calculate direct materialsinventory, totalcost, December31, 2022.

The total cost of ending direct materials inventory is $ 1,400 .

Requirement 2. Calculate finished goodsinventory, totalunits, December31, 2022.

The 2022 selling price is $ 4.40 per unit.

YOUANSWERED: nothing x nothing = Ending direct materials total cost

Requirement 1. Calculate direct materialsinventory, totalcost, December31, 2022.

The total cost of ending direct materials inventory is $ 1,400 .

Requirement 2. Calculate finished goodsinventory, totalunits, December31, 2022.

The 2022 selling price is $ 4.80 per unit.

YOUANSWERED: nothing x nothing = Ending direct materials total cost

YOUANSWERED: Rouse Company