Solution manual for Managerial Accounting
8th edition
by john wild, ken shaw, barbara chiappetta
Verified Chapter's 1 - 13 | Complete
,TABLE OF CONTENTS
Chapter 1: Managerial Accounting Concepts and Principles
Chapter 2: Job Order Costing and Analysis
Chapter 3: Process Costing and Analysis
Chapter 4: Activity-Based Costing and Analysis
Chapter 5: Cost Behavior and Cost-Volume-Profit Analysis
Chapter 6: Variable Costing and Analysis
Chapter 7: Master Budgets and Planning
Chapter 8: Flexible Budgets and Standard Costs
Chapter 9: Performance Measurement and Responsibility Accounting
Chapter 10: Relevant Costs for Managerial Decisions
Chapter 11: Capital Budgeting and Investment Analysis
Chapter 12: Reporting Cash Flows
Chapter 13: Analysis of Financial Statements
,Chapter 1
Managerial Accounting Concepts
and Principles
QUICK STUDIES
Quick Study 1-1 (5 minutes)
1. Its primary users are company managers .............................. Managerial
2. Its information is often available only after an audit is complete . Financial
3. Its primary focus is on the organization as a whole .............. Financial
4. Its principles and practices are relatively flexible ................. Managerial
5. It focuses mainly on past results............................................. Financial
Quick Study 1-2 (10 minutes)
1. Indirect cost
2. Direct cost
3. Indirect cost
4. Indirect cost
5. Direct cost
Quick Study 1-3 (10 minutes)
1. Direct materials
2. Factory overhead
3. Direct labor
4. Factory overhead
5. Factory overhead
6. Direct materials
,Quick Study 1-4 (10 minutes)
1. Product cost
2. Period cost
3. Product cost
4. Period cost
5. Product cost
6. Period cost
7. Period cost
8. Product cost
Quick Study 1-5 (10 minutes)
1. Prime cost
2. Conversion cost (Glue is an indirect material)
3. Both
4. Conversion cost
5. Conversion cost
6. Prime cost
Quick Study 1-6 (10 minutes)
Ending work in process inventory is computed as:
Work in process inventory, beginning ............... $ 26,000
Direct materials used ....................................... 74,000
Direct labor used .............................................. 55,000
Factory overhead ............................................. 95,000
Total manufacturing costs .............................. 224,000
Total cost of work in process .............................. 250,000
Less cost of goods manufactured ...................... 220,000
Work in process inventory, ending ..................... $ 30,000
,Quick Study 1-6 (continued)
Alternative calculation using T-account:
Work in Process Inventory
Beginning 26,000
Direct materials 74,000
Direct labor 55,000
Factory overhead 95,000
220,000 COGM
Ending 30,000
Quick Study 1-7 (10 minutes)
Cost of goods sold is computed as:
Finished goods inventory, beginning ................. $ 500
Cost of goods manufactured ............................... 4,000
Goods available for sale ...................................... 4,500
Less finished goods inventory, ending .............. 700
Cost of goods sold ............................................... $3,800
Quick Study 1-8 (10 minutes)
Finished goods inventory, beginning ................ $ 345,000
Cost of goods manufactured .............................. 918,000
Goods available for sale ..................................... 1,263,000
Less finished goods inventory, ending ............. 283,000
Cost of goods sold .............................................. $ 980,000
Alternative calculation using T-account:
Finished Goods Inventory
Beginning 345,000
COGM 918,000
980,000 COGS
Ending 283,000
,Quick Study 1-9 (5 minutes)
Cost of goods sold is computed as:
Merchandise inventory, beginning ..................... $12,000
Cost of merchandise purchased ......................... 85,000
Goods available for sale ...................................... 97,000
Less merchandise inventory, ending ................. 18,000
Cost of goods sold ............................................... $79,000
Quick Study 1-10 (10 minutes)
(1) (2) (3)
Cost of merchandise purchased......... $181,000 $140,000 $289,000
Merchandise inventory, beginning .... 106,000 21,000 28,000
Merchandise inventory, ending .......... 82,000 33,000 50,000
Cost of goods sold ............................... 205,000 128,000 267,000
Calculations:
(1) $106,000 + Purchases - $205,000 = $82,000 Purchases = $181,000
(2) Beg. Inv. + $140,000 - $128,000 = $33,000 Beg. Inv. = $21,000
(3) $28,000 + $289,000 - $267,000 = End. Inv. End. Inv. = $50,000
,Quick Study 1-11 (15 minutes)
REX MANUFACTURING
Income Statement
For Year Ended December 31
Sales.................................................................. $92,000
Cost of goods sold
Finished goods inventory, beginning ......... $ 19,000
Cost of goods manufactured ....................... 40,000
Goods available for sale .............................. 59,000
Less finished goods inventory, ending ...... 16,000
Cost of goods sold ....................................... 43,000
Gross profit ...................................................... 49,000
Selling expenses.............................................. 12,000
General and administrative expenses ........... 14,000
Net income........................................................ $23,000
Quick Study 1-12 (10 minutes)
BIN MANUFACTURING
Current Assets Section of the Balance Sheet
December 31
Cash ........................................................ $22,000
Accounts receivable, net ...................... 12,000
Raw materials inventory ....................... 8,000
Work in process inventory.................... 18,000
Finished goods inventory ..................... 22,000
Prepaid insurance.................................. 4,000
Total current assets............................... $86,000
,Quick Study 1-13 (10 minutes)
Raw materials inventory, beginning ............................... $ 855
Raw materials purchased ................................................ 3,646
Raw materials available for use ...................................... 4,501
Less raw materials inventory, ending............................. 717
Direct materials used ....................................................... $3,784
Alternative calculation using T-account:
Raw Materials Inventory
Beginning 855
Purchased 3,646
3,784 Used
Ending 717
Quick Study 1-14 (15 minutes)
(1) (2) (3)
Direct materials used ................ $ 8,000 $14,000 $32,000
Direct labor used ....................... 4,000 13,000 18,000
Factory overhead ...................... 5,000 23,000 22,000
Total manufacturing costs ........ 17,000 50,000 72,000
Calculations:
(1) $8,000 + $4,000 + $5,000 = $17,000
(2) $14,000 + Direct labor + $23,000 = $50,000 DL = $13,000
(3) Direct materials + $18,000 + $22,000 = $72,000 DM = $32,000
,Quick Study 1-15 (15 minutes)
Barton Company
Schedule of Cost of Goods Manufactured
For Year Ended December 31
Direct materials .................................................... $190,000
Direct labor .......................................................... 63,000
Factory overhead ................................................. 24,000
Total manufacturing costs ................................. 277,000
Add work in process inventory, beginning........ 157,000
Total cost of work in process.............................. 434,000
Less work in process inventory, ending............ 142,000
Cost of goods manufactured .............................. $292,000
Verification calculation (not substitute) using T-account:
Work in Process Inventory
Beginning 157,000
Direct materials 190,000
Direct labor 63,000
Factory overhead 24,000
292,000 COGM
Ending 142,000
Quick Study 1-16 (10 minutes)
Raw materials inventory, beginning ................ $ 6,000
Raw materials purchased ................................. 123,000
Raw materials available for use ....................... 129,000
Less raw materials inventory, ending.............. 7,000
Direct materials used ........................................ $122,000
, Quick Study 1-17 (20 minutes)
Part A
Direct materials used*......................................... $122,000
Direct labor ......................................................... 94,000
Factory overhead ................................................ 39,000
Total manufacturing costs ................................ $255,000
*$6,000 + $123,000 - $7,000 = $122,000 direct materials used
Part B
Schedule of Cost of Goods Manufactured
Direct materials
Raw materials inventory, beginning............... $ 6,000
Raw materials purchases ............................... 123,000
Raw materials available for use ..................... 129,000
Less raw materials inventory, ending ............ 7,000
Direct materials used ...................................... $122,000
Direct labor .......................................................... 94,000
Factory overhead
Indirect labor..................................................... 20,000
Depreciation expense—Factory...................... 15,000
Factory utilities ................................................. 4,000
Total factory overhead ..................................... 39,000
Total manufacturing costs ................................ 255,000
Add work in process inventory, beginning....... 12,000
Total cost of work in process ............................ 267,000
Less work in process inventory, ending........... 9,000
Cost of goods manufactured ............................. $258,000
8th edition
by john wild, ken shaw, barbara chiappetta
Verified Chapter's 1 - 13 | Complete
,TABLE OF CONTENTS
Chapter 1: Managerial Accounting Concepts and Principles
Chapter 2: Job Order Costing and Analysis
Chapter 3: Process Costing and Analysis
Chapter 4: Activity-Based Costing and Analysis
Chapter 5: Cost Behavior and Cost-Volume-Profit Analysis
Chapter 6: Variable Costing and Analysis
Chapter 7: Master Budgets and Planning
Chapter 8: Flexible Budgets and Standard Costs
Chapter 9: Performance Measurement and Responsibility Accounting
Chapter 10: Relevant Costs for Managerial Decisions
Chapter 11: Capital Budgeting and Investment Analysis
Chapter 12: Reporting Cash Flows
Chapter 13: Analysis of Financial Statements
,Chapter 1
Managerial Accounting Concepts
and Principles
QUICK STUDIES
Quick Study 1-1 (5 minutes)
1. Its primary users are company managers .............................. Managerial
2. Its information is often available only after an audit is complete . Financial
3. Its primary focus is on the organization as a whole .............. Financial
4. Its principles and practices are relatively flexible ................. Managerial
5. It focuses mainly on past results............................................. Financial
Quick Study 1-2 (10 minutes)
1. Indirect cost
2. Direct cost
3. Indirect cost
4. Indirect cost
5. Direct cost
Quick Study 1-3 (10 minutes)
1. Direct materials
2. Factory overhead
3. Direct labor
4. Factory overhead
5. Factory overhead
6. Direct materials
,Quick Study 1-4 (10 minutes)
1. Product cost
2. Period cost
3. Product cost
4. Period cost
5. Product cost
6. Period cost
7. Period cost
8. Product cost
Quick Study 1-5 (10 minutes)
1. Prime cost
2. Conversion cost (Glue is an indirect material)
3. Both
4. Conversion cost
5. Conversion cost
6. Prime cost
Quick Study 1-6 (10 minutes)
Ending work in process inventory is computed as:
Work in process inventory, beginning ............... $ 26,000
Direct materials used ....................................... 74,000
Direct labor used .............................................. 55,000
Factory overhead ............................................. 95,000
Total manufacturing costs .............................. 224,000
Total cost of work in process .............................. 250,000
Less cost of goods manufactured ...................... 220,000
Work in process inventory, ending ..................... $ 30,000
,Quick Study 1-6 (continued)
Alternative calculation using T-account:
Work in Process Inventory
Beginning 26,000
Direct materials 74,000
Direct labor 55,000
Factory overhead 95,000
220,000 COGM
Ending 30,000
Quick Study 1-7 (10 minutes)
Cost of goods sold is computed as:
Finished goods inventory, beginning ................. $ 500
Cost of goods manufactured ............................... 4,000
Goods available for sale ...................................... 4,500
Less finished goods inventory, ending .............. 700
Cost of goods sold ............................................... $3,800
Quick Study 1-8 (10 minutes)
Finished goods inventory, beginning ................ $ 345,000
Cost of goods manufactured .............................. 918,000
Goods available for sale ..................................... 1,263,000
Less finished goods inventory, ending ............. 283,000
Cost of goods sold .............................................. $ 980,000
Alternative calculation using T-account:
Finished Goods Inventory
Beginning 345,000
COGM 918,000
980,000 COGS
Ending 283,000
,Quick Study 1-9 (5 minutes)
Cost of goods sold is computed as:
Merchandise inventory, beginning ..................... $12,000
Cost of merchandise purchased ......................... 85,000
Goods available for sale ...................................... 97,000
Less merchandise inventory, ending ................. 18,000
Cost of goods sold ............................................... $79,000
Quick Study 1-10 (10 minutes)
(1) (2) (3)
Cost of merchandise purchased......... $181,000 $140,000 $289,000
Merchandise inventory, beginning .... 106,000 21,000 28,000
Merchandise inventory, ending .......... 82,000 33,000 50,000
Cost of goods sold ............................... 205,000 128,000 267,000
Calculations:
(1) $106,000 + Purchases - $205,000 = $82,000 Purchases = $181,000
(2) Beg. Inv. + $140,000 - $128,000 = $33,000 Beg. Inv. = $21,000
(3) $28,000 + $289,000 - $267,000 = End. Inv. End. Inv. = $50,000
,Quick Study 1-11 (15 minutes)
REX MANUFACTURING
Income Statement
For Year Ended December 31
Sales.................................................................. $92,000
Cost of goods sold
Finished goods inventory, beginning ......... $ 19,000
Cost of goods manufactured ....................... 40,000
Goods available for sale .............................. 59,000
Less finished goods inventory, ending ...... 16,000
Cost of goods sold ....................................... 43,000
Gross profit ...................................................... 49,000
Selling expenses.............................................. 12,000
General and administrative expenses ........... 14,000
Net income........................................................ $23,000
Quick Study 1-12 (10 minutes)
BIN MANUFACTURING
Current Assets Section of the Balance Sheet
December 31
Cash ........................................................ $22,000
Accounts receivable, net ...................... 12,000
Raw materials inventory ....................... 8,000
Work in process inventory.................... 18,000
Finished goods inventory ..................... 22,000
Prepaid insurance.................................. 4,000
Total current assets............................... $86,000
,Quick Study 1-13 (10 minutes)
Raw materials inventory, beginning ............................... $ 855
Raw materials purchased ................................................ 3,646
Raw materials available for use ...................................... 4,501
Less raw materials inventory, ending............................. 717
Direct materials used ....................................................... $3,784
Alternative calculation using T-account:
Raw Materials Inventory
Beginning 855
Purchased 3,646
3,784 Used
Ending 717
Quick Study 1-14 (15 minutes)
(1) (2) (3)
Direct materials used ................ $ 8,000 $14,000 $32,000
Direct labor used ....................... 4,000 13,000 18,000
Factory overhead ...................... 5,000 23,000 22,000
Total manufacturing costs ........ 17,000 50,000 72,000
Calculations:
(1) $8,000 + $4,000 + $5,000 = $17,000
(2) $14,000 + Direct labor + $23,000 = $50,000 DL = $13,000
(3) Direct materials + $18,000 + $22,000 = $72,000 DM = $32,000
,Quick Study 1-15 (15 minutes)
Barton Company
Schedule of Cost of Goods Manufactured
For Year Ended December 31
Direct materials .................................................... $190,000
Direct labor .......................................................... 63,000
Factory overhead ................................................. 24,000
Total manufacturing costs ................................. 277,000
Add work in process inventory, beginning........ 157,000
Total cost of work in process.............................. 434,000
Less work in process inventory, ending............ 142,000
Cost of goods manufactured .............................. $292,000
Verification calculation (not substitute) using T-account:
Work in Process Inventory
Beginning 157,000
Direct materials 190,000
Direct labor 63,000
Factory overhead 24,000
292,000 COGM
Ending 142,000
Quick Study 1-16 (10 minutes)
Raw materials inventory, beginning ................ $ 6,000
Raw materials purchased ................................. 123,000
Raw materials available for use ....................... 129,000
Less raw materials inventory, ending.............. 7,000
Direct materials used ........................................ $122,000
, Quick Study 1-17 (20 minutes)
Part A
Direct materials used*......................................... $122,000
Direct labor ......................................................... 94,000
Factory overhead ................................................ 39,000
Total manufacturing costs ................................ $255,000
*$6,000 + $123,000 - $7,000 = $122,000 direct materials used
Part B
Schedule of Cost of Goods Manufactured
Direct materials
Raw materials inventory, beginning............... $ 6,000
Raw materials purchases ............................... 123,000
Raw materials available for use ..................... 129,000
Less raw materials inventory, ending ............ 7,000
Direct materials used ...................................... $122,000
Direct labor .......................................................... 94,000
Factory overhead
Indirect labor..................................................... 20,000
Depreciation expense—Factory...................... 15,000
Factory utilities ................................................. 4,000
Total factory overhead ..................................... 39,000
Total manufacturing costs ................................ 255,000
Add work in process inventory, beginning....... 12,000
Total cost of work in process ............................ 267,000
Less work in process inventory, ending........... 9,000
Cost of goods manufactured ............................. $258,000
