CHAPTER 1

SOLUTIONS TO EXERCISESSET B
EXERCISE 1-1B
(a) Factory utilities.....................................................................................
Depreciation on factory equipment...............................................
Indirect factory labor ..........................................................................
Indirect materials.................................................................................
Factory managers salary .................................................................
Property taxes on factory building ................................................
Factory repairs .....................................................................................
Manufacturing overhead ...................................................................

$ 15,600
12,650
48,900
80,800
13,000
2,500
2,000
$175,450

(b) Direct materials ....................................................................................

Direct labor ............................................................................................
Manufacturing overhead ...................................................................
Product costs........................................................................................

$137,600
89,100
175,450
$402,150

(c) Depreciation on delivery trucks......................................................

Sales salaries........................................................................................
Repairs to office equipment.............................................................
Advertising ............................................................................................
Office supplies used...........................................................................
Period costs ..........................................................................................

8,800
46,400
2,300
18,000
5,640
$ 81,140

EXERCISE 1-2B
(a)

Delivery service (product) costs:

Indirect materials .......................................................................
Depreciation on delivery equipment ...................................
Dispatchers salary....................................................................
Gas and oil for delivery trucks ..............................................
Drivers salaries..........................................................................
Delivery equipment repairs ....................................................
Total.....................................................................................

Copyright 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

$ 8,400
11,200
7,000
2,200
15,000
300
$44,100

(For Instructor Use Only)

1-1

EXERCISE 1-2B (Continued)

(b)

Period costs:
Property taxes on office building..........................................
CEOs salary ................................................................................
Advertising ...................................................................................
Office supplies ............................................................................
Office utilities...............................................................................
Repairs on office equipment ..................................................
Total......................................................................................

$ 2,870
22,000
1,600
650
990
680
$28,790

EXERCISE 1-3B
(a) Work-in-process, 1/1.....................................
Direct materials used....................................
Direct labor.......................................................
Manufacturing overhead
Depreciation on plant ...........................
Factory supplies used..........................
Property taxes on plant .......................
Total manufacturing overhead ..................
Total manufacturing costs..........................
Total cost of work-in-process....................
Less: Ending work-in-process...................
Cost of goods manufactured .....................

$ 10,000
$120,000
110,000
$60,000
25,000
19,000
104,000

(b) Finished goods, 1/1 .......................................

Cost of goods manufactured ....................
Cost of goods available for sale ...............
Finished goods, 12/31 ..................................
Cost of goods sold ........................................

334,000
344,000
14,000
$330,000
$ 60,500
330,000
390,500
50,600
$339,900

EXERCISE 1-4B
Total raw materials available for use:
Direct materials used..................................................................
Add: Raw materials inventory (12/31) ...................................
Total raw materials available for use.....................................

$190,000
17,500
$207,500

Raw materials inventory (1/1):

Direct materials used..................................................................
Add: Raw materials inventory (12/31) ...................................
Less: Raw materials purchases ..............................................
Raw materials inventory (1/1)...................................................

$190,000
17,500
165,000
$ 42,500

1-2

Copyright 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

EXERCISE 1-4B (Continued)

Total cost of work in process:
Cost of goods manufactured .......................................................
Add: Work in process (12/31).....................................................
Total cost of work in process ......................................................

$550,000
80,000
$630,000

Total manufacturing costs:

Total cost of work in process .......................................................
Less: Work in process (1/1) .........................................................
Total manufacturing costs.............................................................

$630,000
210,000
$420,000

Direct labor:
Total manufacturing costs.............................................................
Less: Total overhead......................................................................
Direct materials used .........................................................
Direct labor .........................................................................................

$420,000
119,000
190,000
$111,000

EXERCISE 1-5B
A + $57,400 + $46,500 = $175,650
A = $71,750

$252,100 $11,000 = F
F = $241,100

$175,650 + B = $221,500
B = $45,850

$130,600 + G + $102,000 = $273,700

G = $41,100

$221,500 C = $180,725
C = $40,775

$273,700 + H = $335,000
H = $61,300

$68,400 + $86,500 + $81,600 = D

D = $236,500

$335,000 $90,000 = I
I = $245,000

$236,500 + $15,600 = E
E = $252,100

Copyright 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

1-3

EXERCISE 1-5B (Continued)

Additional explanation to EXERCISE 1-5B solution:
Case A
(a) Total manufacturing costs .............................................................
Less: Manufacturing overhead.....................................................
Direct labor..............................................................................
Direct materials used.......................................................................

$175,650
(46,500)
(57,400)
$ 71,750

(b) Total cost of work in process........................................................

Less: Total manufacturing costs................................................
Work in process (1/1/11) .................................................................

$221,500
175,650
$ 45,850

(c) Total cost of work in process........................................................

Less: Cost of goods manufactured ...........................................
Work in process (12/31/11).............................................................

$221,500
180,725
$ 40,775

Case B
(d) Direct materials used.......................................................................
Direct labor..........................................................................................
Manufacturing overhead.................................................................
Total manufacturing costs .............................................................

$ 68,400
86,500
81,600
$236,500

(e) Total manufacturing costs .............................................................

Work in process (1/1/11) .................................................................
Total cost of work in process........................................................

$236,500
15,600
$252,100

(f)

$252,100
11,000
$241,100

Total cost of work in process........................................................

Less: Work in process (12/31/11) ...............................................
Cost of goods manufactured ........................................................

Case C
(g) Total manufacturing costs .............................................................
Less: Manufacturing overhead....................................................
Direct materials used..........................................................
Direct labor..........................................................................................

1-4

Copyright 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

$273,700
(102,000)
(130,600)
$ 41,100

(For Instructor Use Only)

EXERCISE 1-5B (Continued)

(h) Total cost of work in process .......................................................
Less: Total manufacturing costs................................................
Work in process (1/1/11)..................................................................

$335,000
273,700
$ 61,300

(i)

$335,000
90,000
$245,000

Total cost of work in process .......................................................

Less: Work in process (12/31/11) ...............................................
Cost of goods manufactured ........................................................

EXERCISE 1-6B
(a) (a) $127,000 + $140,000 + $89,000 = $356,000
(b) $356,000 + $33,000 $360,000 = $29,000
(c) $430,000 ($200,000 + $123,000) = $107,000
(d) $40,000 + $470,000 $430,000 = $80,000
(e) $257,000 ($80,000 + $100,000) = $77,000
(f)

$257,000 + $60,000 $80,000 = $237,000

(g) $308,000 ($67,000 + $75,000) = $166,000

(h) $308,000 + $45,000 $270,000 = $83,000
(b)

HEINTZ COMPANY
Cost of Goods Manufactured Schedule
For the Year Ended December 31, 2011
Work in process, January 1......................................
Direct materials ............................................................
Direct labor ....................................................................
Manufacturing overhead ...........................................
Total manufacturing costs...............................
Total cost of work in process ..................................
Less: Work in process inventory,
December 31 ....................................................
Cost of goods manufactured ...................................

Copyright 2010 John Wiley & Sons, Inc.

$ 33,000
$127,000
140,000
89,000

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

356,000
389,000
29,000
$360,000

(For Instructor Use Only)

1-5

EXERCISE 1-7B
(a)

TART CORPORATION
Cost of Goods Manufactured Schedule
For the Month Ended June 30, 2011
Work in process, June 1 ..................................
Direct materials used........................................
Direct labor...........................................................
Manufacturing overhead
Indirect labor...............................................
Factory managers salary.......................
Indirect materials.......................................
Maintenance, factory equipment..........
Depreciation, factory equipment..........
Factory utilities ..........................................
Total manufacturing overhead.......
Total manufacturing costs ..............................
Total cost of work in process.........................
Less: Work in process, June 30...................
Cost of goods manufactured .........................

(b)

$ 3,000
$25,000
30,000
$4,500
5,000
2,200
1,800
1,400
400
70,300
73,300
2,800
$70,500

TART CORPORATION
Income Statement (Partial)
For the Month Ended June 30, 2011
Net sales............................................................................
Cost of goods sold
Finished goods inventory, June 1 ...................
Cost of goods manufactured [from (a)]............
Cost of goods available for sale.......................
Finished goods inventory, June 30.................
Cost of goods sold ......................................
Gross profit ......................................................................

1-6

15,300

Copyright 2010 John Wiley & Sons, Inc.

$85,100
$ 5,000
70,500
75,500
9,500

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

66,000
$19,100

(For Instructor Use Only)

EXERCISE 1-8B
(a)
PARE, ASH, AND TOCY
Schedule of Cost of Contract Services Provided
For the Month Ended August 31, 2011
Supplies used (direct materials) ..........................................
$ 2,500
Salaries of professionals (direct labor) .............................
15,600
Service overhead:
Utilities for contract operations ..................................... $1,900
Contract equipment depreciation..................................
900
Insurance on contract operations .................................
800
Janitorial services for professional offices................
300
Total overhead ..............................................................
3,900
Cost of contract services provided...............................
$22,000
(b) The costs not included in the cost of contract services provided would
all be classified as period costs. As such, they would be reported on
the income statement under administrative expenses.
EXERCISE 1-9B
(a) Work-in-process, 1/1....................................
Direct materials
Materials inventory, 1/1 ...................... $ 22,000
Materials purchased ............................ 170,000
Materials available for use ................ 192,000
Less: Materials inventory, 12/31.....
30,000
Direct materials used ..................................
Direct labor .....................................................
Manufacturing overhead ............................
Total manufacturing costs ........................
Total cost of work-in-process...................
Less: Work-in-process, 12/31..................
Cost of goods manufactured....................
(b) Sales .................................................................
Cost of goods sold
Finished goods, 1/1 .............................
Cost of goods manufactured ..........
Cost of goods available for sale .....
Finished goods, 12/31 ........................
Cost of goods sold .......................
Gross profit.....................................................
Copyright 2010 John Wiley & Sons, Inc.

$ 18,500

$162,000
200,000
183,000
545,000
563,500
17,200
$546,300
$920,000
$ 27,000
546,300
573,300
31,000

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

542,300
$377,700
(For Instructor Use Only)

1-7

EXERCISE 1-9B (Continued)

(c) Current assets
Inventories
Finished goods........................................................
Work in process .....................................................
Raw materials ..........................................................

$31,000
17,200
30,000

$78,200

(d) In a merchandising companys income statement, the only difference would

be in the computation of cost of goods sold. Beginning and ending finished
goods would be replaced by beginning and ending merchandise inventory, and cost of goods manufactured would be replaced by purchases. In
a merchandising companys balance sheet, there would be one inventory
account (merchandise inventory) instead of three.

EXERCISE 1-10B
(a)

KURT MANUFACTURING
Cost of Goods Manufactured Schedule
For the Month Ended June 30, 2011
Work in process inventory, June 1 .................
Direct materials
Raw materials inventory, June 1.............
Raw materials purchases ..........................
Total raw materials available for use ........
Less: Raw materials inventory, June 30 .....
Direct materials used ..................................
Direct labor..............................................................
Manufacturing overhead
Indirect labor.................................................. $7,500
Factory insurance ........................................ 4,000
Machinery depreciation.............................. 5,000
Factory utilities ............................................. 3,100
Machinery repairs ........................................ 1,800
Miscellaneous factory costs..................... 1,500
Total manufacturing overhead...........
Total manufacturing costs .................................
Total cost of work in process............................
Less: Work in process inventory, June 30 .......
Cost of goods manufactured ............................

1-8

Copyright 2010 John Wiley & Sons, Inc.

5,000

$10,000
64,000
74,000
13,100
60,900
57,000

22,900

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

140,800
145,800
13,000
$132,800

(For Instructor Use Only)

EXERCISE 1-10B (Continued)

(b)

KURT MANUFACTURING
(Partial) Balance Sheet
June 30, 2011
Current assets
Inventories
Finished goods..................................................
Work in process ................................................
Raw materials.....................................................

$ 6,000
13,000
13,100

$32,100

EXERCISE 1-11B
(a) Raw Materials account:
(5,000 4,650) X $8 = $2,800
Work in Process account:
(4,600 X 10%) X $8 = $3,680
Finished Goods account:
(4,600 X 90% X 25%) X $8 = $8,280
Cost of Goods Sold account: (4,600 X 90% X 75%) X $8 = $24,840
Selling Expenses account:
50 X $8 = $400
Proof of cost of head lamps allocated (5,000 X $8 = $40,000)
Raw materials
Work in process
Finished goods
Cost of goods sold
Selling expenses
Total
(b) To:

$ 2,800
3,680
8,280
24,840
400
$40,000

Chief Accountant

From:

Student

Subject:

Statement Presentation of Accounts

Two accounts will appear in the income statement. Cost of Goods Sold
will be deducted from net sales in determining gross profit. Selling expenses will be shown under operating expenses and will be deducted
from gross profit in determining net income. Sometimes, the calculation
for Cost of Good Sold is shown on the income statement. In these cases,
the balance in Finished Goods inventory would also be shown on the
income statement.
The other accounts associated with the head lamps are inventory accounts which contain end-of-period balances. Thus, they will be reported
under inventories in the current assets section of the balance sheet in
the following order: finished goods, work in process, and raw materials.
Copyright 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

1-9

1-10

Finished Goods Inventory

Work in Process Inventory
Raw Materials Inventory
Raw Materials Purchases
Direct Labor
Indirect Labor
Factory Insurance
Machinery Depreciation
Machinery Repairs
Factory Utilities
Miscellaneous Factory Costs
Totals
Cost of Goods Manufactured
Totals

10,000
5,000
10,000
64,000
57,000
7,500
4,000
5,000
1,800
3,100
1,500

Adjusted
Trial Balance
Dr.
Cr.
5,000
13,000
10,000
13,100
64,000
57,000
7,500
4,000
5,000
1,800
3,100
1,500 000,000
158,900
26,100
000,000 132,800
158,900 158,900

Cost of Goods
Manufactured
Dr.
Cr.

Copyright 2010 John Wiley & Sons, Inc.

10,000

6,000

Income
Statement
Dr.
Cr.

132,800

KURT MANUFACTURING
Worksheet (Partial)
For the Month Ended June 30, 2011

6,000
13,000
13,100

Balance
Sheet
Dr.
Cr.

*EXERCISE 1-12B

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

Cost Item

Copyright 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

$20,000
55,000
17,800
$92,800

000,000
$20,000

$20,000

Direct
Materials

000,000
$55,000

$55,000
2,000
$17,800

800

700
6,000
3,000

$ 1,300
4,000

Product Costs
Direct
Manufacturing
Labor
Overhead

Production cost per motorcycle helmet = $92,800/1,000 = $92.80

(b) Total production costs

Direct materials
Direct labor
Manufacturing overhead
Total production cost

Maintenance costs on factory building

Factory managers salary
Advertising for helmets
Sales commissions
Depreciation on factory building
Rent on factory equipment
Insurance on factory building
Raw materials
Utility costs for factory
Supplies for general office
Wages for assembly line workers
Depreciation on office equipment
Miscellaneous materials

(a)

500
000,000
$13,700

200

8,000
5,000

Period
Costs

SOLUTIONS TO PROBLEMSSET C
PROBLEM 1-1C

(For Instructor Use Only)

1-11

1-12

Cost Item

Copyright 2010 John Wiley & Sons, Inc.

$24 X 2,500 = 60,000.

$13 X 2 X 2,500 = $65,000.
$3 X 2,500 = $7,500.
$9,600/12 = $800.
$7,200/12 = $600.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

$ 60,000
65,000
15,300
$140,300

000,000
$60,000

$60,000

Direct
Materials

000,000
$65,000

$65,000

800
600
$15,300

$ 1,500
7,500
3,500
1,400

Product Costs
Direct
Manufacturing
Labor
Overhead

Production cost per racket = $140,300/2,500 = $56.12

(b) Total production costs

Direct materials
Direct labor
Manufacturing overhead
Total production cost

(1)
(2)
(3)
(4)
(5)

Raw materials (1)

Wages for workers (2)
Rent on equipment
Indirect materials (3)
Factory supervisors salary
Janitorial costs
Advertising
Depreciation on factory building (4)
Property taxes on factory building (5)

(a)

00,000
$6,000

$6,000

Period
Costs

PROBLEM 1-2C

(For Instructor Use Only)

PROBLEM 1-3C

(a) Case A
A = $6,300 + $3,000 + $6,000 = $15,300
$15,300 + $1,000 B = $14,600
B = $15,300 + $1,000 $14,600 = $1,700
$14,600 + C = $18,300
C = $18,300 $14,600 = $3,700
D = $18,300 $1,500 = $16,800
E = ($22,500 $1,500) $16,800 = $4,200
F = $4,200 $2,700 = $1,500
Case B
G + $4,000 + $5,000 = $16,000
G = $16,000 $4,000 $5,000 = $7,000
$16,000 + H $2,000 = $20,000
H = $20,000 + $2,000 $16,000 = $6,000
(I $1,200) K = $6,000
(I $1,200) $21,500 = $6,000
I = $1,200 + $21,500 + $6,000 = $28,700
(Note: Item I can only be solved after item K is solved.)
J = $20,000 + $4,000 = $24,000
K = $24,000 $2,500 = $21,500
$6,000 L = $2,200
L = $3,800

Copyright 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

1-13

PROBLEM 1-3C (Continued)

(b)

CASE A
Cost of Goods Manufactured Schedule
Work in process, beginning.......................................
Direct materials..............................................................
Direct labor......................................................................
Manufacturing overhead.............................................
Total manufacturing costs ................................
Total cost of work in process....................................
Less: Work in process, ending................................
Cost of goods manufactured ....................................

(c)

$ 1,000
$6,300
3,000
6,000
15,300
16,300
1,700
$14,600

CASE A
Income Statement
Sales ..................................................................................
Less: Sales discounts ................................................
Net sales...........................................................................
Cost of goods sold
Finished goods inventory, beginning ...........
Cost of goods manufactured............................
Cost of goods available for sale......................
Finished goods inventory, ending..................
Cost of goods sold .....................................
Gross profit .....................................................................
Operating expenses .....................................................
Net income.......................................................................

$22,500
1,500
$21,000
$ 3,700
14,600
18,300
1,500
16,800
4,200
2,700
$ 1,500

CASE A
(Partial) Balance Sheet
Current assets
Cash..........................................................................
Receivables (net)..................................................
Inventories
Finished goods ............................................
Work in process...........................................
Raw materials ...............................................
Prepaid expenses.................................................
Total current assets....................................

1-14

Copyright 2010 John Wiley & Sons, Inc.

$ 3,000
10,000
$1,500
1,700
700

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

3,900
200
$17,100

(For Instructor Use Only)

PROBLEM 1-4C

(a)

JIMEY MANUFACTURING COMPANY

Cost of Goods Manufactured Schedule
For the Year Ended December 31, 2011
Work in process inventory,
January 1 .......................................
Direct materials
Raw materials inventory,
January 1...............................
Raw materials
purchases .............................
Total raw materials
available for use ................
Less: Raw materials
inventory,
December 31................
Direct materials used.............
Direct labor ........................................
Manufacturing overhead
Plant managers salary .........
Indirect labor ............................
Factory utilities........................
Factory machinery
depreciation .........................
Factory insurance...................
Factory property taxes..........
Factory repairs.........................
Total manufacturing
overhead.......................
Total manufacturing costs............
Total cost of work in process ......
Less: Work in process,
December 31 ........................
Cost of goods manufactured .......

Copyright 2010 John Wiley & Sons, Inc.

9,500

$ 47,000
62,500
109,500

44,800
$ 64,700
145,100
40,000
18,100
12,900
7,700
7,400
6,900
800
93,800

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

303,600
313,100
7,500
$305,600

(For Instructor Use Only)

1-15

PROBLEM 1-4C (Continued)

(b)

JIMEY MANUFACTURING COMPANY

(Partial) Income Statement
For the Year Ended December 31, 2011
Sales revenues
Sales .....................................................................
Less: Sales discounts ...................................
Net sales..............................................................
Cost of goods sold
Finished goods inventory,
January 1 ........................................................
Cost of goods manufactured (see
schedule) ........................................................
Cost of goods available for sale..................
Finished goods inventory,
December 31..................................................
Cost of goods sold .................................
Gross profit .................................................................

(c)

$465,000
2,500
$462,500

85,000
305,600
390,600
77,800
312,800
$149,700

JIMEY MANUFACTURING COMPANY

(Partial) Balance Sheet
December 31, 2011
Assets
Current assets
Cash......................................................................
Accounts receivable........................................
Inventories
Finished goods ........................................
Work in process.......................................
Raw materials ...........................................
Total current assets.......................

1-16

Copyright 2010 John Wiley & Sons, Inc.

$ 28,000
27,000
$77,800
7,500
44,800

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

130,100
$185,100

(For Instructor Use Only)

PROBLEM 1-5C

(a)

MAYO COMPANY
Cost of Goods Manufactured Schedule
For the Month Ended August 31, 2011
Work in process, August 1 .....................
Direct materials
Raw materials inventory,
August 1 ..........................................
Raw materials purchases...............
Total raw materials
available for use ...........................
Less: Raw materials inventory,
August 31................................
Direct materials used.......................
Direct labor ..................................................
Manufacturing overhead
Factory facility rent ..........................
Depreciation on factory
equipment .......................................
Indirect labor ......................................
Factory utilities* ................................
Factory insurance**..........................
Total manufacturing
overhead.................................
Total manufacturing costs......................
Total cost of work in process ................
Less: Work in process,
August 31 ........................................
Cost of goods manufactured .................

$ 20,000

$ 19,500
210,000
229,500
30,000
$199,500
160,000
$ 60,000
35,000
15,000
5,000
3,500
118,500
478,000
498,000
21,000
$477,000

*$10,000 X 50%
**$5,000 X 70%

Copyright 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)

1-17

PROBLEM 1-5C (Continued)

(b)

MAYO COMPANY
Income Statement
For the Month Ended August 31, 2011
Sales (net)......................................................................
Cost of goods sold
Finished goods inventory, August 1 ...........
Cost of goods manufactured..........................
Cost of goods available for sale....................
Less: Finished goods inventory,
August 31.................................................
Cost of goods sold ...................................
Gross profit ...................................................................
Operating expenses
Advertising expense .........................................
Selling and administrative salaries ..............
Depreciation expensesales
equipment ........................................................
Utilities expense*................................................
Insurance expense** .........................................
Total operating expenses .......................
Net loss...........................................................................

$675,000
$ 40,000
477,000
517,000
49,000
468,000
207,000
75,000
70,000
50,000
5,000
1,500
201,500
$ 5,500

*$10,000 X 50%
**$5,000 X 30%

1-18

Copyright 2010 John Wiley & Sons, Inc.

Weygandt, Managerial Accounting, 5/e, Exercise B/Problem Set C

(For Instructor Use Only)