Period Product
Expired Unexpired Expired UnexpiredTotal
Insurance 3100 15500 18600
Seminar fee 1000 1000
Property taxes 5000 10000 15000
President's bonus 10000 10000
Utility cost 8000 12000 20000
21100 16500 17000 10000 64600
Indicate whether each of the following terms is associated with a
manufacturing (Mfg.), a retailing or merchandising (Mer.), or a service (Ser.)
company. There can be more than one correct answer for each term.
a. Depreciation—factory equipment
b. Prepaid rent
c. Auditing fees expense
d. Merchandise inventory
e. Sales salaries expense
f. Finished goods inventory
g. Cost of services rendered
h. Cost of goods sold
i. Direct labor wages
a. Mfg
b. All
c. All
d. Merchandising
e. All
f. Mfg
g. Services
h. Mfg and Mdsng
i. Mfg and Service
Indicate whether each of the following types of organizations is characterized
by a high, low, or moderate degree of conversion.
a. Textbook publisher
b. Convenience store
c. Sporting goods retailer
d. Christmas tree farm
e. Custom print shop
f. Bakery in a grocery store
g. Greek restaurant
h. Jelly manufacturer
i. Auto manufacturer
j. Concert ticket seller
a. high
b. low
c. low
d. high
e. high
f. high
g. moderate
h. high
i. high
j. low or moderate
Barbieri Co. makes aluminum canoes. The company’s June 2010
costs for material and labor were as follows:
Material costs
Janitorial supplies $ 1,800 Indirect
Chrome rivets to assemble canoes 12,510 Direct
Sealant 1,230 Indirect
Aluminum 1,683,000 Direct
Labor costs
Janitorial wages $ 9,300 Indirect
Aluminum cutters 56,160 Direct
Salespeople salaries 43,050 Period
Welders 156,000 Direct
Factory supervisor salaries 101,250 Indirect
a. What is the direct material cost for June? 1,695,510
b. What is the direct labor cost for June? 212,160
c. What is the overhead cost for June? 113,580
How much is the prime cost? 1,907,670
How much is the conversion cost 325,740
How much is the product cost 2,021,250
Forham Inc. manufactures stainless steel knives.
Following are factory costs incurred during 2010:
Material costs
Stainless steel $ 800,000 Direct
Equipment oil and grease 6,000 Indirect
Plastic for handles 5,600 Direct
Wood blocks for knife storage 24,800 Direct
Labor costs
Equipment operators $ 500,000 Direct
Equipment mechanics 82,000 Indirect
Factory supervisors 272,000 Indirect
a. What is the direct material cost for 2010? 830,400
b. What is the direct labor cost for 2010? 500,000
c. What is the total indirect material cost and the indirect labor
cost for 2010? 360,000
How much is the prime cost? 1,330,400
How much is the conversion cost 860,000
How much is the product cost 1,690,400
Work-in-process
BB 0 EB 23000
DM 24000 CGM 169000
DL 126000
FOH 42000
192000 192000
Raw materials inventory
BB 58,000 EB 84,000
Pur 638,000 Issued 612,000
696,000 696,000
Work-in-process
BB 372,000 EB 436,000
1,924,000 DM 612,000 CGM 1,860,000
DL 748,000
FOH 564,000
2,296,000 2,296,000
Finished goods inventory
BB 224,000 EB 196,000
CGM 1,860,000 CGS 1,888,000
2,084,000 2,084,000
Raw materials inventory
BB 93,200 EB 69,600 DM
Pur 656,000 Issued 679,600 IM
RMAU 749,200 749,200
Work-in-process
BB 146,400 EB 120,000
2,067,600 DM 504,000 CGM 2,094,000
DL 591,000 DL
FOH 972,600 IL
TGPIP 2,214,000 2,214,000
Finished goods inventory
BB 72,000 EB 104,800
CGM 2,094,000 CGS 2,061,200
CGAS 2,166,000 2,166,000
504000
175600
679600
591000
197000
788000
Raw materials inventory
BB 30,000 EB 42,000 DM
Pur 1,182,000 Issued 1,170,000 DL
RMAU 1,212,000 1,212,000 PC
Work-in-process
BB 90,000 EB 22,500
2,470,000 DM 1,170,000 CGM 2,537,500
1,300,000 DL 400,000 DL
FOH 900,000 OH
TGPIP 2,560,000 2,560,000 CC
Finished goods inventory
BB 125,000 EB 18,400
CGM 2,537,500 CGS 2,644,100
CGAS 2,662,500 2,662,500
1,170,000
400,000
1570000
100 400000
225 900000
325 1300000
