(WIP) ACC 350 Exam 1 Study Material
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Be 7-15<br />
#2 – COGM / COGS<br />
Hanks Corporation produced 120,000 toy pianos last year. These pianos sell for $100<br />
each. Hanks had 11,<strong>350</strong> pianos in finished goods inventory at the beginning of the year.<br />
At the end of the year, there were 7,600 pianos in finished goods inventory. Hanks uses<br />
FIFO method of accounting and the accounting records from last year show the following<br />
information<br />
a. Purchases of Raw <strong>Material</strong>s $900,000<br />
b. Rent on the factory building 250,000<br />
c. Utilities (50% factory, 50% sales office) 60,000<br />
d. Insurance on the factory 10,000<br />
e. Depreciation, factory equipment 70,000<br />
f. General Administration 175,000<br />
g. Raw <strong>Material</strong>s used as supplies 35,000<br />
h. Plant receptionist, Plant landscaping, etc. 100,000<br />
i. Salaries<br />
Direct labor 2,500,000<br />
Factory Supervisors 500,000<br />
Plant Manager 90,000<br />
Plant Controller 40,000<br />
Receiving personnel 60,000<br />
Quality Inspectors 150,000<br />
Salespeople 300,000<br />
Machine Maintenance salary 100,000<br />
RM Inventory manager 40,000<br />
Total Salaries 3,780,000<br />
Raw <strong>Material</strong>s Inventory, January 1 310,000<br />
Raw <strong>Material</strong>s Inventory, December 31 100,000<br />
Work In Process Inventory, January 1 450,000<br />
Work In Process Inventory, December 31 600,000<br />
Finished Goods Inventory, January 1 454,000
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