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Cost Accounting and Financial Statement Preparation: A Comprehensive Analysis of Manufacturing Costs

A cost accounting assignment analyzing the preparation of financial statements and manufacturing costs.

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    Cost Accounting and Financial Statement Preparation: A Comprehensive Analysis of Manufacturing Costs 1. Kennedy Company reports the following costs and expenses in May. Factory utilities $ 16,500 Direct labor $79,100 Depreciation on factory Sales salaries 51,400 equipment 12,650 Property taxes on factory Depreciation on delivery trucks 3,800 building 2,500 Indirect factory labor 48,900 Repairs to office equipment 1,300 Indirect materials 70,800 Factory repairs 2,000 Direct materials used 157,600 Advertising 23,000 Factory manager's salary 8,000 Office supplies used 2,640 Instructions From the information, determine the total amount of: (a) Manufacturing overhead. (b) Product costs. (c) Period costs. SHOW YOUR WORK. (a) Factory utilities ...................................................................... $ 16,500 Depreciation on factory equipment ........................................ 12,650 Indirect factory labor .............................................................. 48,900 Indirect materials ................................................................... 70,800 Factory manager's salary ...................................................... 8,000 Property taxes on factory building ......................................... 2,500 Factory repairs ...................................................................... 2,000 Manufacturing overhead ........................................................ $161,350 (b) Direct materials ..................................................................... $157,600 Direct labor ............................................................................ 79,100 Manufacturing overhead ........................................................ 161,350 Product costs ........................................................................ $398,050 (c) Depreciation on delivery trucks ................................................ $ 3,800 Sales salaries .......................................................................... 51,400 Repairs to office equipment ..................................................... 1,300 Advertising ............................................................................... 23,000 Office supplies used ................................................................ 2,640 Period costs ............................................................................. $ 82,140

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    2. From their accounting records, Lane prepares the following schedule and financial statements on a yearly basis: (a) Cost of goods manufactured schedule. (b) Income statement. (c) Balance sheet. For each of the items, complete the following matrix by placing an X mark under the appropriate schedule or financial statement in which the item will appear. ( An item may appear in more than one financial statement). Item Cost of Goods Manufactured Income Statemen t Balance Sheet None of These (indicate where it would be found) Direct labor X Office supplies used X Depreciation on printing machines X Finished goods inventory, 12/31 X X Work in process, 12/31 Raw materials inventory, 1/1 X Cost of goods manufactured X X Work in process, 1/1 X Office supplies inventory, 12/31 X Indirect labor X Heat and electricity for the print shop X Raw materials inventory, 12/31 X Factory Supervisory Salaries X Finished goods inventory, 1/1 X X Raw Materials Purchases X Sales salaries X

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