Students may simply use the $208,400 cost of goods sold computation from E 2-42B, rather than repeating the details of the computation here. (25 min.) E 2-44B Instructional note: This is a fairly challenging exercise that requires students to work backwards through financial statement elements. a. Revenues $27,900 Cost of goods sold 15,500 profit $12,400 b. To determine beginning raw materials inventory, with the materials used computation and work backwards: Beginning raw materials inventory $ 2,400 Purchases of direct materials 9,600 Available for use 12,000 Ending raw materials inventory (3,500) Direct materials used $ 8,500 c. To determine ending finished goods inventory, start by computing the cost of goods manufactured: Beginning work in process inventory $ 0 Direct materials used $8,500 Direct labor 3,400 Manufacturing overhead 6,300 18,200 Total manufacturing costs to account for 18,200 Ending work in process inventory (1,000) Cost of goods manufactured $17,200 Now use the cost of goods sold computation to determine ending finished goods inventory: Beginning finished goods inventory $ 4,900 Cost of goods manufactured (from above) 17,200 Cost of goods available for sale 22,100 Ending finished goods inventory (6,600) Cost of sold (from part A) $15,500 (15-20 min.) E 2-45B a. Fuel economy when purchasing new trucks for the Relevant. delivery fleet b. Real estate property tax when selecting the location Relevant for a new order processing center c. The purchase of the old computer when replacing it Irrelevant with a new computer with improved features d. The average cost of vehicle operation when purchasing Relevant a new delivery van e. The original cost of the current stove when selecting a Irrelevant new, more efficient stove for a restaurant f. The fair market value (trade-in value) of the existing Relevant forklift when deciding whether to replace it with a new, more efficient model
Students may simply use the $208,400 cost of goods sold computation from E 2-42B, rather than repeating the details of the computation here. (25 min.) E 2-44B Instructional note: This is a fairly challenging exercise that requires students to work backwards through financial statement elements. a. Revenues $27,900 Cost of goods sold 15,500 profit $12,400 b. To determine beginning raw materials inventory, with the materials used computation and work backwards: Beginning raw materials inventory $ 2,400 Purchases of direct materials 9,600 Available for use 12,000 Ending raw materials inventory (3,500) Direct materials used $ 8,500 c. To determine ending finished goods inventory, start by computing the cost of goods manufactured: Beginning work in process inventory $ 0 Direct materials used $8,500 Direct labor 3,400 Manufacturing overhead 6,300 18,200 Total manufacturing costs to account for 18,200 Ending work in process inventory (1,000) Cost of goods manufactured $17,200 Now use the cost of goods sold computation to determine ending finished goods inventory: Beginning finished goods inventory $ 4,900 Cost of goods manufactured (from above) 17,200 Cost of goods available for sale 22,100 Ending finished goods inventory (6,600) Cost of sold (from part A) $15,500 (15-20 min.) E 2-45B a. Fuel economy when purchasing new trucks for the delivery fleet Relevant. b. Real estate property tax when selecting the location for a new order processing center Relevant c. The purchase of the old computer when replacing it with a new computer with improved features Irrelevant d. The average cost of vehicle operation when purchasing a new delivery van Relevant e. The original cost of the current stove when selecting a new, more efficient stove for a restaurant Irrelevant f. The fair market value (trade-in value) of the existing forklift when deciding whether to replace it with a new, more efficient model Relevant
Solution-Manual-for-Managerial-Accounting-3E-3rd-Edition.docx