Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Textbook Question
Chapter 2, Problem 2.22AE
Construct an income statement using product and period costs (Learning Objectives 4 & 5)
Outdoor Amenities is a manufacturer of backyard and deck furniture. Its products are in high demand, and it carries no inventory. Following is a list of selected account balances from its
| Salaries and wages (for administrative and sales staff) | $ 37,400 |
| Stain (used in manufacturing furniture) | $ 12,700 |
| Indirect labor costs (wages of maintenance workers in factory) | $ 21,300 |
| Other manufacturing |
$ 9,800 |
| Rent and utilities (for administrative offices) | $ 12,000 |
| Utility costs (related to factory) | $ 11,200 |
| Labor costs (wages of carpenters who build furniture) | $ 36,900 |
| Accounts receivable | $ 27,100 |
| Marketing costs | $ 17,300 |
| Wood (used in manufacturing furniture) | $ 57,800 |
| Sales revenues | $ 255,000 |
| Accounts payable | $ 7,100 |
Requirements
Using the income statement accounts in the table, calculate:
- 1. Cost of goods sold. Hint: Cost of goods sold can be calculated by summing the total product costs since there is no inventory.
- 2. Operating expenses. Hint: Operating expenses are the company’s period costs.
- 3. Gross profit
- 4. Operating income
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Personal Protective Gears & More (PPGM) design and manufacture masks for students. Afterproduction, the masks are placed into individual cases, before being transferred into Finished Goods. Theaccounting records of the business reflect the following data at June 30, 2021, for the manufacturing ofmasks for Mount Marlie High School.
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Personal Protective Gears & More (PPGM) design and manufacture masks for students. After production, the masks are placed into individual cases, before being transferred into Finished Goods. The accounting records of the business reflect the following data at June 30, 2021, for the manufacturing of masks for Mount Marlie High School.Inventory 1/7/2020 30/6/2021Raw Materials $230,000 $260,000Factory Supplies $35,000 $24,000Work in Progress $348,300 $203,300Finished Goods $632,900 $485,000Other information:Sales Revenue $5,731,000Factory Supplies Purchased 64,000Direct Factory Labor 792,000Raw Materials Purchased 560,000Plant janitorial service 37,000Depreciation: Plant & Equipment 186,000Total Utilities 1 481,250Production Supervisor’s Salary 450,000Design Costs (School Logo) 26,000Packaging Cases Cost 42,000Total Insurance 2 168,000Delivery Vehicle Drivers’ Wages 181,500Depreciation: Delivery Vehicle 53,290Property Taxes 3 240,000Administrative Wages & Salaries…
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Chapter 2 Solutions
Managerial Accounting (5th Edition)
Ch. 2 - (Learning Objective 1) Which of the following...Ch. 2 - (Learning Objective 2) Which of the following is...Ch. 2 - (Learning Objective 3) A cost that can be traced...Ch. 2 - (Learning Objective 4) Period costs are often...Ch. 2 - (Learning Objective 4) Conversion costs consist of...Ch. 2 - (Learning Objective 4) Which of the following is...Ch. 2 - Prob. 7QCCh. 2 - (Learning Objective 5) Which of the following...Ch. 2 - Prob. 9QCCh. 2 - Prob. 10QC
Ch. 2 - Short Exercises S2-1 Identify types of companies...Ch. 2 - Identify type of company from balance sheets...Ch. 2 - Classify costs by value chain function (Learning...Ch. 2 - Classify costs as direct or indirect (Learning...Ch. 2 - Prime costs Cost objects Product costs Assigned...Ch. 2 - Prob. 2.6SECh. 2 - Classify product costs and period costs (Learning...Ch. 2 - Classify a manufacturers costs (Learning Objective...Ch. 2 - Classify costs incurred by a dairy processing...Ch. 2 - Determine total manufacturing overhead (Learning...Ch. 2 - Prepare a retailers income statement (Learning...Ch. 2 - Compute Cost of Goods Sold for a merchandiser...Ch. 2 - Calculate direct materials used (Learning...Ch. 2 - Compute Cost of Goods Manufactured (Learning...Ch. 2 - Describe other cost terms (Learning Objectives 6...Ch. 2 - Classify costs as fixed or variable (Learning...Ch. 2 - Prob. 2.17SECh. 2 - Classify costs along the value chain for a...Ch. 2 - Classify costs along the value chain for a...Ch. 2 - Value chain and sustainability efforts (Learning...Ch. 2 - Prob. 2.21AECh. 2 - Construct an income statement using product and...Ch. 2 - Work backward to find missing amounts (Learning...Ch. 2 - Prepare a retailers income statement (Learning...Ch. 2 - Compute direct materials used and Cost of Goods...Ch. 2 - Compute Cost of Goods Manufactured and Cost of...Ch. 2 - Continues E2-26A: Prepare income statement...Ch. 2 - Determine whether information is relevant...Ch. 2 - Prob. 2.29AECh. 2 - Classify costs along the value chain for a...Ch. 2 - Classify costs along the value chain for a...Ch. 2 - Value chain and sustainability efforts (Learning...Ch. 2 - Classify and calculate a manufacturers costs...Ch. 2 - Construct an income statement using product and...Ch. 2 - Work backward to find missing amounts (Learning...Ch. 2 - Prob. 2.36BECh. 2 - Compute direct materials used and Cost of Goods...Ch. 2 - Compute Cost of Goods Manufactured and Cost of...Ch. 2 - Continues E2-38B: Prepare income statement...Ch. 2 - Determine whether information is relevant...Ch. 2 - Prob. 2.41BECh. 2 - Classify costs along the value chain (Learning...Ch. 2 - Determine ending inventory balances (Learning...Ch. 2 - Prepare income statements (Learning Objective 5)...Ch. 2 - Prob. 2.45APCh. 2 - Prob. 2.46APCh. 2 - Classify costs along the value chain (Learning...Ch. 2 - Determine ending inventory balances (Learning...Ch. 2 - Prepare income statements (Learning Objective 5)...Ch. 2 - Prob. 2.50BPCh. 2 - Prob. 2.51BPCh. 2 - Calculate operating income (Learning Objective 5)...Ch. 2 - Prob. 2.53ACT
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