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(WIP) ACC 350 Exam 1 Study Material

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Seed 1=7-16 Required: a.

Seed 1=7-16 Required: a. Prepare a Cost of Goods Manufactured Statement. Beginning RM Inventory + Raw Material Purchases = RM Available for Use - RM used as supplies - Ending RM Inventory = DM Used in Production + Direct Labor + Manufacturing Overhead = Total Manufacturing Cost + Beginning WIP - Ending WIP = COGM b. What was the cost of producing one toy piano last year? c. Based on the COGM Statement, what is the value of ending FG inventory? d. What was COGS? = COGM + Beginning FG - Ending FG = COGS

a. t 7- it Solutions ACC 350 In-Class Problems – Chapter 2 #1 – Identify Costs The Temp Company manufactures bicycles and has the following costs: DM DL MOH Period or Product Fixed or Variable 1. Assembly-line worker’s wages X Product Variable 2. Factory heating and air conditioning X Product Fixed 3. Salaries of the company’s top executives Period Fixed 4. Sales Commissions Period Variable 5. Production supervisor’s salary X Product Fixed 6. Research and development costs Period Fixed 7. Chains used to make bicycles X Product Variable 8. Supplies (e.g. lubricant) used to make bicycles X Product Variable 9. Freight-in on direct materials X Product Variable 10. Freight-out to ship goods Period Variable 11. Quality inspectors’ salaries X Product Fixed 12. Material handler salaries X Product Fixed 13. Process design engineer salaries X Product Fixed 14. Electricity for the machines X Product Variable 15. OT premium paid to assembly workers X Product Variable 16. Property taxes on the factory & office* X 17. Office rental for cost-management staff* X Product or Period Product or Period Fixed Fixed Identify each cost as Direct Material (DM), Direct Labor (DL), or Manufacturing Overhead (MOH), as a Period or Product Cost, and as a Fixed or Variable Cost. * Depends on location. If a factory office—MOH; if an administrative office—Period Expense. Note: many of the fixed costs are fixed within a relevant range. As volume increases beyond the relevant range, additional supervisors, inspectors, etc. will need to be hired. 2 - 14