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Week 2 Assignment Solution

The document provides financial information for Marwick Manufacturing Co. for the month of January. It includes sales, inventory amounts, materials purchased, labor costs, depreciation expenses, and other costs. The solutions prepare a statement of cost of goods manufactured for January showing a total cost of $511,000. It also determines the cost of goods sold for January was $505,000. The document also provides a list of costs for Sitka Products Co. for June and the journal entries to record issuing materials, distributing labor costs, recording factory overhead, and transferring overhead to work in process.

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tucker jacobs
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578 views

Week 2 Assignment Solution

The document provides financial information for Marwick Manufacturing Co. for the month of January. It includes sales, inventory amounts, materials purchased, labor costs, depreciation expenses, and other costs. The solutions prepare a statement of cost of goods manufactured for January showing a total cost of $511,000. It also determines the cost of goods sold for January was $505,000. The document also provides a list of costs for Sitka Products Co. for June and the journal entries to record issuing materials, distributing labor costs, recording factory overhead, and transferring overhead to work in process.

Uploaded by

tucker jacobs
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Week 2 Assignments Solutions:

The following data was taken from the general ledger and other records of Marwick Manufacturing Co. at
January31, the end of the first month of operations in the current fiscal year:

Sales $650,000
Inventories at January 1:
Materials inventory 25,000
Work in process inventory 29,000
Finished goods inventory 48,000
Inventories at January 31:
Materials inventory 20,000
Work in process inventory 32,000
Finished goods inventory 54,000
Materials purchased 154,000
Labor Costs:
Assembly workers’ wages 185,000
Supervisors’ salaries 30,000
Sales personnel salaries 52,000
Depreciation:
Factory building 73,000
Sales office 28,000
Indirect materials used 3,000
Factory utilities 67,000

a. Prepare a statement of cost of goods manufactured.


b. Determine the cost of goods sold for the month.
ANSWER: (a)
Marwick Manufacturing Co.
Statement of Cost of Goods Manufactured
For the Month Ended January 31, 20--
Direct Materials:
Inventory, January 1 $25,000
Purchases 154,000
Total cost of available materials $179,000
Less inventory, July 31 20,000
Cost of materials used $159,000
Less indirect materials used 3,000
Cost of direct materials used in production $156,000
Direct labor 185,000
Factory overhead:
Indirect materials $ 3,000
Indirect labor (Supervisors) 30,000
Depreciation 73,000
Utilities 67,000
Total factory overhead 173,000
Total manufacturing cost $514,000
Add work in process inventory, January 1 29,000
Total $543,000
Less work in process inventory, January 31 32,000
Cost of goods manufactured during the month $511,000
(b)

Finished goods inventory, January 1 $48,000


Add cost of goods manufactured during July 511,000
Goods available for sale $559,000
Less finished goods inventory, January 31 54,000
Cost of goods sold $505,000

2. Following is a list of costs incurred by the Sitka Products Co. during the month of June:
Direct materials used $12,000 Expired insurance $3,000
Indirect materials used 3,000 Utilities 800
Direct labor employed 20,000 Repairs 700
Indirect labor employed 4,500 Depreciation expense
Selling expenses 6,000 --Machinery and equipment 1,200

Prepare the journal entries necessary to record the issuance of materials, the distribution of labor cost, the
recording of factory overhead, and the entry transferring Factory Overhead to Work in Process.

ANSWER: Work in Process (Direct Materials) 12,000


Factory Overhead (Indirect Materials) 3,000
Materials 15,000
Work in Process (Direct Labor) 20,000
Factory Overhead (Indirect Labor) 4,500
Payroll 24,500
Factory Overhead 5,700
Prepaid Insurance 3,000
Accounts Payable (Utilities) 800
Accounts Payable (Repairs) 700
Accumulated Depreciation (Machinery and Equipment) 1,200
Work in Process 13,200
Factory Overhead 13,200

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