|
|
|
|
Junior Member
|
|
Jul 19, 2008, 05:46 AM
|
|
This is the cost of one loveseat at the beginning of the year. Based on this, we can calculate the number of loveseats seat manufactured as
Cost of goods manufactured
. $1,304,000
Divided by: $267
Number of loveseats manufactured = 1304000/267 = 4883
Add: beginning number of loveseats available = + 600
Total number of loveseats available for sale = 5483
Less: loveseats available at the end of the year = - 800
Total number of loveseats sold = 4683
You got this one wrong. It should not be this complicated. Here's the formula you should use.
Number of Seats Sold = Beginning + Produced - Ending
All the items in the formula are given.
B.H. Roberts Company produced 4,000 loveseats during the year. The loveseats sell for $800 each. Roberts had 600 loveseats in finished goods inventory at the beginning of the year. At the end of the year, there were 800 loveseats in finished goods inventory. Roberts accounting records provide the following information
Number 9 and 10 are perfect :)
|
|
|
Junior Member
|
|
Jul 19, 2008, 05:52 AM
|
|
In addition,
Average Cost of Producing One Loveseat in the Current Period = Cost of Goods Manufactured divided by Number of Loveseats Produced in the Current Period.
B.H. Roberts Company produced 4,000 loveseats during the year
|
|
|
Junior Member
|
|
Jul 19, 2008, 11:41 PM
|
|
Criado,
So are you saying the number of loveseats produced in the current period is 4000 loveseats so I do not need to compute anything?
pmonica
|
|
|
Junior Member
|
|
Jul 19, 2008, 11:43 PM
|
|
This means the average cost of producing one loveseat is 1304000/4000 = $326
Am I right?
pmonica
|
|
|
Junior Member
|
|
Jul 19, 2008, 11:47 PM
|
|
and the total number of loveseats sold in the current period is
Number of loveseats sold = Beginning + produced - Ending
= 600 + 4000 - 800
= 3800 loveseats
Am I on the right track here?
|
|
|
Junior Member
|
|
Jul 19, 2008, 11:49 PM
|
|
You got them right! :)
|
|
|
Junior Member
|
|
Jul 20, 2008, 12:09 AM
|
|
Criado,
Is there a difference between manufacturing cost of goods sold and manufacturing cost incurred or do the mean the same thing?
pmonica
|
|
|
Junior Member
|
|
Jul 20, 2008, 12:10 AM
|
|
Thanks, I now understand.
|
|
|
Junior Member
|
|
Jul 20, 2008, 12:12 AM
|
|
Can you now look at the income statement I prepared and advise me, please?
Also, in this case did the company se lifo or fifo, how do I determine that?
|
|
|
Junior Member
|
|
Jul 20, 2008, 12:16 AM
|
|
I am unsure of how I came up with my sales figure,
Did I use the correct formula and is my computation correct?
|
|
|
Junior Member
|
|
Jul 20, 2008, 12:21 AM
|
|
I think sales should be calculated as follows:
the total number of loveseats sold in the current period* selling price
3800 * 800 = $3040000
am I thinking right?
|
|
|
Junior Member
|
|
Jul 20, 2008, 12:35 AM
|
|
This is my new income statement, please advise
Sales is calculated as
Total # of loveseats sold in the current period = 3800
Multiplied by selling price of one loveseat = $800
Sales = 3800* 800 = $3,040,000
Sales
$3,040,000
Less expenses:
Cost of services sold:
Beginning work in process
26, 080
Service cost added:
Direct materials
600,000
Direct labor
400,000
Overhead
307,912 1,307,912
Total
1,333,992
Less: Ending work in process
29,992 $1,304,000
Gross margin
.. $1,736,000
Less operating expenses:
Selling expenses:
Salary, sales supervisor
. 180,000
Add: Commissions, sales persons
360,000
Selling expenses = 180000 + 360000 = 540,000
Selling expenses
540, 000
Administrative expenses
.. 600,000 $1,140,000
Income before income taxes
.. $596,000
|
|
|
Junior Member
|
|
Jul 20, 2008, 12:53 AM
|
|
This is how I computed the manufacturing cost of goods sold, am on the right track?
14. Manufacturing cost of goods sold is calculated as follows
Total number of loveseats sold in the current period = 3800
Multiplied by the average cost of one loveseat in the current period = $326
Manufacturing cost of goods sold = 3800*326
= $1,238,800
|
|
|
Junior Member
|
|
Jul 20, 2008, 01:29 AM
|
|
Nope; remember that in your inventory; you have 600 loveasets that worth $267 each and 4,000 loveseats that worth 326 each. During that time that you sold 3,800 we don't know which are the ones that are sold and which are not.
Please go back to your post #10. You already computed for Cost of Goods Sold and I confirm that your computation is correct.
Thank you. I did not realize it was that simple. You are a great tutor for me.
These are my remaining questions for my assignment this week.
How do I Calculate the cost of goods available for sale.
I worked it out this way, is this right
The cost of goods available for sale is calculated as follows
Finished goods inventory, December 31, 2005
$160,000
Add: Cost of manufactured goods
.. $1,304,000
Cost of available goods for sale
$1,464,000
Determine the cost of goods sold.
Is this right?
Cost of goods sold is calculated as follows:
Cost of goods sold = cost of goods available ending inventory balance
Cost of goods available
. $1,464,000
Less: Finished goods inventory December 31, 2006
.. 228,200
Cost of goods sold $1,235,800
|
|
|
Junior Member
|
|
Jul 20, 2008, 02:39 AM
|
|
Thanks criado,
In this case how do I compute the sales figure for the income statement?
|
|
|
Junior Member
|
|
Jul 20, 2008, 02:48 AM
|
|
Can we not assume that out of the available loveseats for sale, each one was sold for $800
|
|
|
Junior Member
|
|
Jul 20, 2008, 05:37 AM
|
|
Sales is computed as number of seats sold (you already computed this previously) multiplied by selling price (which is given above).
Definitely. As the problem gave, each one of the seats sold was sold at $800 each. :)
|
|
|
Junior Member
|
|
Jul 20, 2008, 05:43 AM
|
|
I don't know why I am missing to read some of your post from time to time.
Regarding your Income Statement, it is perfect. :)
|
|
|
Junior Member
|
|
Jul 20, 2008, 06:35 AM
|
|
Criado,
I want to thank you for helping me through this assignment.
Now for the lifo, fifo part, which on is used in the inventory account, how do I determine that?
|
|
|
Junior Member
|
|
Jul 20, 2008, 06:47 AM
|
|
Now the average cost for producing one love seat in the current period = $326
Cost of one loveseat (beginning) = $267
Cost of one loveseat (ending) = $285
Based on these figures, how can I determeine whether LIFO or FIFO is being used?
|
|
Question Tools |
Search this Question |
|
|
Add your answer here.
Check out some similar questions!
Schedule Cost of goods manufactured and cost of goods sold
[ 10 Answers ]
I am taking my first class in Accounting and I am having difficulties with my homework.
I have the following problem, that I have done in several ways and I always get an answer that is greater that the correct one. These are the figures (in thousands of dollars):
Direct Labor Cost: $10,500...
Need help with cost of goods manufactured
[ 1 Answers ]
B3 Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year:
Beginning Ending
Balance Balance
Raw materials $26,000 $31,000
Work in process 77,000 59,000
Finished goods 124,000 139,000...
Cost of goods manufactured
[ 2 Answers ]
Hi! I'm having some problems w/my homework. This is my last trimester and I want to make sure to pass my subject.
Pena manufacturing company presented the following data:
1. cost of goods manufactured and cost of goods sold were P373,000 and P300,000 respectively
2. Purchases of raw materials...
View more questions
Search
|