Cost of Direct Materials, Cost of Goods Manufactured, Cost of

School: Algonquin College - Course: ACC 2354 - Subject: Accounting

Quiz 1 Basic Managerial Accounting Concepts (5%) This assignment relates to the following Course Learning Requirements: CLR 1: Explain the role of managerial accounting in the global environment. CLR 2: Classify the various kinds of costs and calculate product costs. Objective of this Assignment: Prepare Cost of Direct Materials, Cost of Goods Manufactured, Cost of Goods Sold andIncome Statement Pre-Assignment Instructions: 1.To prepare for this assignment, read the modules 1 and 2 content and follow the embedded learning activities. 2.Read Chapters 1 and 2 of the Textbook. 3.Complete Modules 1 and 2 Learning Activities. Assignment Tasks: For this quiz, you are required to complete the two problems below and answer the questions that follow. Demonstrate your comprehension of the chapter material, as well as the ability to apply this knowledge through analysis and computations. Problem 1 COST OF DIRECT MATERIALS, COST OF GOODS MANUFACTURED, COST OF GOODS SOLD (LO 3) Bisby Company manufactures fishing rods. At the beginning of July, the following information was supplied by its accountant: Raw materials inventory$40,000 Work-in-process inventory 21,000 Finished goods inventory23,200 During July, the direct labour cost was $43,500, raw materials purchases were $64,000 and the total overhead cost was

$108,750. The inventories at the end of July were: Raw materials inventory$19,800 Work-in-process inventory 32,500 Finished goods inventory22,100 Required: 1.What is the cost of the direct materials used in production during July? 3 Marks 2.What is the cost of goods manufactured for July? 5 Marks 3.What is the cost of goods sold for July? 5 Marks Problem 2 PREPARATION OF INCOME STATEMENT: MANUFACTURING OBJECTIVE FIRM (LO 3) Laworld Inc. manufactures small camping tents. Last year, 200,000 tents were made and sold for $60 each. Each tent includes the following costs: Direct materials$18 Direct labour12 Manufacturing overhead16 The only selling expenses were a commission of $2 per unit sold and advertising totalling $100,000. Administrative expenses, all fixed, equalled $300,000. There were no beginning or ending finished goods inventories. There were no beginning or ending work-in-process inventories.