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Cae08 - Activity Chapter 1

This document contains 5 solutions to cost accounting problems. Each solution shows the calculations to determine values such as cost of goods sold, cost of goods manufactured, beginning finished goods inventory, and net operating income based on data provided about sales, inventory levels, costs, and margins. The calculations demonstrate how to apply the accounting equation of assets = liabilities + equity to solve for unknown values.

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Jr Villariez
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621 views

Cae08 - Activity Chapter 1

This document contains 5 solutions to cost accounting problems. Each solution shows the calculations to determine values such as cost of goods sold, cost of goods manufactured, beginning finished goods inventory, and net operating income based on data provided about sales, inventory levels, costs, and margins. The calculations demonstrate how to apply the accounting equation of assets = liabilities + equity to solve for unknown values.

Uploaded by

Jr Villariez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ACTIVITY CAE08: COST ACCOUNTING AND CONTROL

ACTIVITY CHAPTER 1

RIVERA, KIM JEAN V.


20195683
BSA
OL22E46

DIRECTIONS:
Show your solution on POST TEST in good form.

Solution 1
The following data pertain to a recent period’s operations:
Sales…………………………………………………..?
Beginning finished goods inventory……….$12,000
Cost of goods manufactured………………….$36,000
Ending finished goods inventory……………$6,000
Cost of goods sold………………………………..?
Gross margin……………………………………….40% of Sales
Administrative and selling expenses……….$10,000
Net operating income……………………………?

Net operating income was:


A)$18,000
B)$10,000
C)$14,000
D)$46,000

SOLUTION:

Cost of Beginning finished Cost of goods Ending finished


goods sold = goods inventory + manufactured ¯ goods inventory

Cost of
goods sold = $12,000 + $36,000 – $6,000

Cost of goods sold = $42,000


Sales – Cost of goods sold = Gross margin

Sales – $42,000 = Gross margin

Gross margin = 40% x Sales

Sales – $42,000 = 40% x Sales

60% x Sales = $42,000

Sales = $70,000

Gross margin – Administrative and selling expenses = Net operating income

Gross margin = 40% x Sale


= $28,000

$28,000 – $10,000 = Net operating income

Net operating income = $18,000

Solution 2

The following data are for a recent period’s operations:


Beginning finished goods inventory……….$150,475
Ending finished goods inventory……………$145,750
Sales…………………………………………………..$400,000
Gross margin……………………………………….$120,000

The cost of goods manufactured was:


A)$115,275
B)$284,725
C)$275,275
D)$124,725
SOLUTION:

Sales – Cost of goods sold = Gross margin


$400,000 – Cost of goods sold = $120,000
Cost of goods sold = $280,000

Beginning finished Cost of goods Ending finished Cost of goods


goods inventory + manufactured – goods inventory = sold

$150,475 + Cost of goods − $145,750. = $280,000


manufactured

Cost of goods manufactured = $275,275

Solution 3

The following inventory balances have been provided for the most recent year:

Beginning Ending
Raw materials…………………$21,000 $15,000
Work in process……………..$18,000. $29,000
Finished goods……………….$57,000 $33,000

The cost of goods manufactured was $714,000. What was the cost of goods
sold?
A)$738,000
B)$693,000
C)$714,000
D)$733,000

SOLUTION

Finished goods inventory, beginning…………………………….$57,000


Add: Cost of goods manufactured……………………………….. 714,000
Goods available for sale………………………………………………771,000
Deduct: Finished goods inventory, ending……………………. 33,000
Cost of goods sold………………………………………………………$738,000
Solution 4

Using the following data for a recent period, calculate the beginning finished
goods inventory:
Sales…………………………………………………..$40,000
Beginning finished goods inventory……….?
Cost of goods manufactured………………….$16,000
Ending finished goods inventory……………$5,000
Cost of goods sold………………………………..?
Gross margin……………………………………….$17,000
Administrative and selling expenses……….?
Net operating income……………………………$10,000

The beginning finished goods inventory was:


A)$24,000
B)$23,000
C)$7,000
D)$12,000

SOLUTION:

Cost of goods sold = Sales – Gross margin


Cost of goods sold = $40,000 − $17,000
Cost of goods sold = $23,000

Beginning finished Cost of goods Ending finished Cost of goods


goods inventory + manufactured − goods inventory = sold

Beginning finished
goods inventory + $16,000 − $5,000 = $23,000

Beginning finished goods inventory = $12,000


ACTIVITY CAE08: COST ACCOUNTING AND CONTROL

Solution 5

Last month a manufacturing company had the following operating results:


Beginning finished goods inventory……….$77,000
Ending finished goods inventory……………$72,000
Sales…………………………………………………..$593,000
Gross margin……………………………………….$67,000

What was the cost of goods manufactured for the month?


A)$588,000
B)$526,000
C)$521,000
D)$531,000

SOLUTION:

Sales – Cost of goods sold = Gross margin


$593,000 – Cost of goods sold = $67,000
Cost of goods sold = $526,000

Beginning finished Cost of goods Ending finished Cost of goods


goods inventory + manufactured − goods inventory = sold

$77,000 + Cost of goods $72,000 $526,000


Manufactured − =

Cost of goods manufactured = $521,000

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