Brisson Company Case Study

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Case 19-3: Brisson Company
Approach
This problem takes the student through a complete cycle of transactions in a standard cost system in a simple setting. It shows how such a system works, including the development of variances, and ties cost accounting to the accounting cycle the student learned in Part 1 of the book. (Brisson’s system is the same as the one depicted in Illustration 19-2.) This seems to be a valuable exercise, especially in helping to minimize the omnipresent problems students have with production cost variance analysis in the next chapter. If not assigned for class, this makes a good exam case. (For ease in grading, I suggest you prepare forms with all needed T accounts preprinted on them.)

Question 1

Materials Inventory| | Work in Process Inventory|
Bal.| 50,250| (4)| 118,810| | Bal.| 75,600| (9)| 267,684| (2)| 104,980| | 36,420| | (4)| 116,696| | | Bal.| 36,420| | | | (5a,8)| 79,200| | |

| | | | | (8)| 99,000| | 102,812|
Finished Goods Inventory| | Bal.| 102,812| | |
Bal.| 155,400| (10b)| 232,602| | | | | |
(9)| 267,684| | 190,482| | | | | |
Bal.| 190,482| | | | | | | |
| | | | | | | | |

Accounts Payable| | All Other Assets|
(3a)| 102,300| Bal.| 104,700| | Bal.| 325,500| (3a)| 102,300| | | (2)| 103,535| | (3b)| 192,000| (3b)| 192,000| | 143,435| (6)| 37,500| | (10a)| 375,150| (5b)| 116,700| | | Bal.| 143,435| | | | (6)| 18,300|

| | | | | | | (7)| 78,750|
All Other Liabilities| | | | | 384,600|
| | Bal.| 47,250| | Bal.| 384,600| | |
| | | | | | | | |
Overhead| | Wages Payable|
(5a)| 40,500| (8)| 99,000| | (5b)| 116,700| Bal.| 6,150| (6)| 55,800| | | | | 2,250...
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