Exam 1

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Exam #1-Chapters 1, 2 & 4
Spring 2010

Ethical Statement – I ____ _________________ hereby
attest that I completed this exam on my own with no assistance from others. If you e-mail this, you MUST include this statement in the body of your e-mail that has the exam attached.

Presented below is a list of costs and expenses incurred in the factory by Nu-Way Corporation, a manufacturer of recreational vehicles. Complete the following matrix by placing an X mark under the appropriate heading(s) for each cost item.

Cost itemDirect MaterialsDirect LaborManufacturing OverheadPeriod Costs Property taxes on the factory landX
Indirect factory laborX
Metal used in manufacturing X
Sales commissionsX
Cabinet maker's wagesX
Nails and glue used in productionx
Repairs to office equipmentX
Income tax expenseX
Indirect materialsX
Factory supervisors’ salariesX
Depreciation on factory machinesX
Factory utilitiesX
Carpeting for the recreational vehiclesX
Depreciation on office machinesX
Property taxes on the factory buildingX
Insurance on factory equipmentX
Office salaries expenseX
Sales manager's salaryX
Office suppliesX

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). ItemCost of Goods ManufacturedIncome StatementBalance SheetNone of These (indicate where it would be found) Direct labor

Office supplies used
Depreciation on printing machinesX
Finished goods inventory, 12/31XX
Work in process, 12/31
Raw materials inventory, 1/1X
Cost of goods manufacturedXX
Work in process, 1/1
Office supplies inventory, 12/31X
Indirect labor
Heat and electricity for the print shopX
Raw materials inventory, 12/31XX
Factory Supervisory SalariesX
Finished goods inventory, 1/1X
Raw Materials Purchases
Sales salaries

Complete the following Cost of Goods Manufactured Schedule. You MUST show what calculations you performed to reach each answer:

Cost of Goods Manufactured Schedule
For the Year Ended December 31, 2004

Work in process (1/1)$320,000
Direct materials
Raw materials inventory (1/1)$ 26,000(a)
Raw materials purchases 246,000
Raw materials available for use 272,000 (b)
Raw materials inventory (12/31) 37,000
Direct materials used$235,000
Direct labor 81,000(c)
Manufacturing overhead
Indirect labor19,000
Factory depreciation38,000
Factory utilities39,000
Total overhead 96,000(d)
Total manufacturing costs412,000(e)
Total cost of work in process732,000(f)
Less: Work in Process (12/31) 292,000
Cost of goods manufactured$440,000

a)Raw materials avail. for use $272,000 (from (b)) less $246,000 raw materials purchases = $26,000. b)Direct materials used $235,000 less raw mat. Inv. 12/31 $37,000 = $272,000 c)Total manufacturing costs $412,000 (from(e)) less direct materials $235,000 less total overhead $96,000 (from(d)) = $81,000 d)Sum of indirect labor, factory depreciation and utilities: $19,000+$38,000+$39,000=$96,000 e)Total cost of WIP $732,000 (from(f)) less WIP 1/1 $320,000 = $412,000. f)COGM $440,000 plus WIP 12/31 $292,000 =$732,000

Watson Manufacturing Company employs a job order cost accounting system and keeps perpetual inventory records. The following transactions occurred in the first month of operations:

1.Direct materials requisitioned during the...
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