Introduction to Managerial Accounting

Chapter 16

Exercises

Introduction to Managerial Accounting

Managerial Cost ClassificationsManagerial Cost ClassificationsManagerial Cost ClassificationsManagerial Cost Classifications

• In-Class Exercise (Form groups and work exercise):

• Exercise No. Page E16-20 988 Classifying Costs

• In-Class Exercise (Form groups and work exercise):

• Exercise No. Page E16-20 988 Classifying Costs

Managerial Cost ClassificationsManagerial Cost ClassificationsManagerial Cost ClassificationsManagerial Cost Classifications

Exercise E16-20:

Wheels, Inc. manufactures wheels for bicycles, tricycles, and scooters.

For each cost given in the exercise, determine if the cost is a product cost or a period cost.

If the cost is a product cost, further determine if the cost is a direct materials (DM), direct labor (DL), or manufacturing overhead (MOH).

Then determine if the product cost is a prime cost, conversion cost, or both.

If the cost is a period cost, further determine if the cost is a selling expense or administrative expense.

Exercise E16-20:

Wheels, Inc. manufactures wheels for bicycles, tricycles, and scooters.

For each cost given in the exercise, determine if the cost is a product cost or a period cost.

If the cost is a product cost, further determine if the cost is a direct materials (DM), direct labor (DL), or manufacturing overhead (MOH).

Then determine if the product cost is a prime cost, conversion cost, or both.

If the cost is a period cost, further determine if the cost is a selling expense or administrative expense.

Managerial Cost ClassificationsManagerial Cost ClassificationsManagerial Cost ClassificationsManagerial Cost Classifications

Managerial Cost ClassificationsManagerial Cost ClassificationsManagerial Cost ClassificationsManagerial Cost Classifications

End of ExerciseEnd of Exercise

• In-Class Exercise (Form groups and work exercise):

• Exercise No. Page E16-22 989 Schedule of Cost of Goods

Manufactured

• In-Class Exercise (Form groups and work exercise):

• Exercise No. Page E16-22 989 Schedule of Cost of Goods

Manufactured

Schedule of Cost of Goods ManufacturedSchedule of Cost of Goods ManufacturedSchedule of Cost of Goods ManufacturedSchedule of Cost of Goods Manufactured

Schedule of Cost of Goods ManufacturedSchedule of Cost of Goods ManufacturedSchedule of Cost of Goods ManufacturedSchedule of Cost of Goods Manufactured

Exercise E16-22:

Knight Corp., a lamp manufacturer, provided the following information for the year ended December 31, 2014.

Inventories Beginning EndingRaw Materials $ 56,000 $ 23,000Work-in-Process 103,000 63,000Finished Goods 41,000 48,000

Other Information:Depreciation, plant building and equipment…… $ 16,000Raw materials purchases………………………….. 159,000Insurance on plant…………………………………... 22,000Sales salaries………………………………………… 46,000Repairs and maintenance – plant………………… 8,000Indirect labor…………………………………………. 32,000Direct labor……………………………………………. 122,000Administrative expenses…………………………… 59,000

Requirements:(1) Use the information to prepare a schedule of cost of goods manufactured.(2) Compute unit product cost if Knight manufactured 2,160 lamps.

Exercise E16-22:

Knight Corp., a lamp manufacturer, provided the following information for the year ended December 31, 2014.

Inventories Beginning EndingRaw Materials $ 56,000 $ 23,000Work-in-Process 103,000 63,000Finished Goods 41,000 48,000

Other Information:Depreciation, plant building and equipment…… $ 16,000Raw materials purchases………………………….. 159,000Insurance on plant…………………………………... 22,000Sales salaries………………………………………… 46,000Repairs and maintenance – plant………………… 8,000Indirect labor…………………………………………. 32,000Direct labor……………………………………………. 122,000Administrative expenses…………………………… 59,000

Requirements:(1) Use the information to prepare a schedule of cost of goods manufactured.(2) Compute unit product cost if Knight manufactured 2,160 lamps.

Schedule of Cost of Goods ManufacturedSchedule of Cost of Goods ManufacturedSchedule of Cost of Goods ManufacturedSchedule of Cost of Goods Manufactured

Schedule of Cost of Goods ManufacturedSchedule of Cost of Goods ManufacturedSchedule of Cost of Goods ManufacturedSchedule of Cost of Goods Manufactured

Schedule of Cost of Goods ManufacturedSchedule of Cost of Goods ManufacturedSchedule of Cost of Goods ManufacturedSchedule of Cost of Goods Manufactured

End of ExerciseEnd of Exercise