Review Ch.2

1. Review Ch.2 Costs Terms, Concepts and Classifications

2. Messinger Manufacturing Company had the following account balances for the quarter ending March 31, unless otherwise noted: Work-in-process inventory (January 1) $ 140,400 Work-in-process inventory (March 31) 171,000 Finished goods inventory (January 1) 540,000 Finished goods inventory (March 31) 510,000 Direct materials used 378,000 Indirect materials used 84,000 Direct manufacturing labor 480,000 Indirect manufacturing labor 186,000 Property taxes on manufacturing plant building 28,800 Salespersons' company vehicle costs 12,000 Depreciation of manufacturing equipment 264,000 Depreciation of office equipment 123,600 Miscellaneous plant overhead 135,000 Plant utilities 92,400 General office expenses 305,400 Marketing distribution costs 30,000

3. Required: a. Prepare a cost of goods manufactured schedule for the quarter. b. Prepare a cost of goods sold schedule for the quarter.

4. Answer: a. Messinger Manufacturing Company Cost of Goods Manufactured Schedule for quarter ending March 31 Direct materials used$ 378,000 Direct manufacturing labor480,000 Manufacturing overhead Depreciation of manufacturing equipment $264,000 Indirect manufacturing labor186,000 Indirect materials84,000 Miscellaneous plant overhead135,000 Plant utilities92,400 Property taxes on building28,800 Total Manufacturing overhead 790,200 Total Manufacturing costs incurred $1,648,200

5. Work-in-process Statement Beginning work-in-process inventory 140,400 Add Total Manufacturing costs incurred $1,648,200 = Total work-in-process for the period $1,788,600 Less ending work-in-process inventory 171,000 = Cost of goods manufactured $1,617,600 a.

6. Finished goods Statement b. Messinger Manufacturing Company Cost of Goods Sold Schedule For the quarter ending March 31 Beginning finished goods inventory $ 540,000 Cost of goods manufactured 1,617,600 Cost of goods available for sale 2,157,600 Ending finished goods inventory (510,000) Cost of goods sold $1,647,600