Cost Accounting and Financial Statement Preparation: A Comprehensive Analysis of Manufacturing Costs

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Cost Accounting and Financial Statement Preparation: A ComprehensiveAnalysis of Manufacturing Costs1.Kennedy Company reports the following costs and expenses in May.Factory utilities$16,500Direct labor$79,100Depreciation on factorySales salaries51,400equipment12,650Property taxes on factoryDepreciation on delivery trucks3,800building2,500Indirect factory labor48,900Repairs to office equipment1,300Indirect materials70,800Factory repairs2,000Direct materials used157,600Advertising23,000Factory manager's salary8,000Office supplies used2,640InstructionsFrom the information, determine the total amount of:(a)Manufacturing overhead.(b)Product costs.(c)Period costs.SHOW YOUR WORK.(a)Factory utilities ......................................................................$ 16,500Depreciation on factory equipment ........................................12,650Indirect factory labor ..............................................................48,900Indirect materials ...................................................................70,800Factory manager's salary ......................................................8,000Property taxes on factory building .........................................2,500Factory repairs ......................................................................2,000Manufacturing overhead ........................................................$161,350(b)Direct materials .....................................................................$157,600Direct labor ............................................................................79,100Manufacturing overhead ........................................................161,350Product costs ........................................................................$398,050(c)Depreciation on delivery trucks ................................................$ 3,800Sales salaries ..........................................................................51,400Repairs to office equipment .....................................................1,300Advertising ...............................................................................23,000Office supplies used ................................................................2,640Period costs .............................................................................$ 82,140

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2.From their accounting records, Lane prepares the following schedule and financialstatements on a yearly basis:(a)Cost of goods manufactured schedule.(b)Income statement.(c)Balance sheet.For each of the items, complete the following matrix by placing an X mark under theappropriate schedule or financial statement in which the item will appear. (An item mayappear in more than one financial statement).ItemCost of GoodsManufacturedIncomeStatementBalanceSheetNone of These (indicatewhere it would be found)Direct laborXOffice supplies usedXDepreciation on printingmachinesXFinished goods inventory,12/31XXWork in process, 12/31Raw materials inventory,1/1XCost of goodsmanufacturedXXWork in process, 1/1XOffice supplies inventory,12/31XIndirect laborXHeat and electricity forthe print shopXRaw materials inventory,12/31XFactory SupervisorySalariesXFinished goods inventory,1/1XXRaw Materials PurchasesXSales salariesX

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