Question

evony BUS2102-Spring 2019-Chapter 2 Fun &Exciting Exercises Always show your work when doing fun &exciting exercises Question 1) Supply the missing data in the four cases below. Each case is independent of the others Case 1Case 2Case 3 Case4 S 14,000$ 9,00o $ 6,000 $ 8,000 Direct materials Direct labor Manufacturing overhead Total manufacturing costs Beginning work in process inventory Ending work in process inventory Cost of goods manufactured 4,000 4,000 5,000 20,000 G 7,000 31,000 25,00018.000 1,000 2,000 4,000 $48,500 8,000 36,000 $ 16,000 Sales Beginning finished goods inventory Cost of goods manufactured Goods available for sale Ending finished goods inventory Cost of goods sold Gross margin Selling and administrative expenses Net operating income $50,000 $40,000 $30,000 $70,000 9,000 12,000 7,000 36,000 16,000 4,000 7,000 26.500 18,000 12,000 10,000 S 5,500 3,000 B- 6,000 C-48,00o D- 30,000 E-80,000 N- G- 12,000 H=

Answer 1

Total manufacturing costs = Direct material + Direct labor + Manufacturing overhead

Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory - Ending work in process inventory.

Goods available for sale = Beginning finished goods inventory + Cost of goods manufactured

Cost of goods sold = Goods available for sale - Ending finished goods inventory

Gross Margin = sales - Cost of goods sold

Net operating income = Gross Margin - Selling & administrative Expenses.

Follow up the above formulas  in the attached below table .

Particulars	CASE 1	CASE 2	CASE 3	CASE 4
Direct Materials	14000	9000	6000	8000
Direct labor	4000	4000	5000	5000
Manufacturing overhead	20000	12000	7000	31000
Total manufacturing costs	38000	25000	18000	44000
Beginning work in process inventory	6600	1000	2000	8500
Ending work in process inventory	8600	3500	4000	4000
Cost of goods manufactured	36000	22500	16000	48500
Sales	50000	40000	30000	70000
Beginning Finished goods inventory	1200	8000	7000	9000
Cost of goods manufactured	36000	22500	16000	48500
Goods available for sale	37200	30500	23000	57500
Ending finished goods inventory	18000	4000	5000	7000
cost of goods sold	19200	26500	18000	50500
Gross Margin	30800	13500	12000	19500
Selling & Administrative Expenses	12000	8000	9000	10000
Net Operating Income	18800	5500	3000	9500

In Case 2 Total manufacturing costs given as 25000

SO Manufacturing overhead = 25000 - 9000 -4000 = 12000.

Cost of goods Manufactured in Case 2 = Total manufacturing costs( 25000) + Beginning work in process inventory (1000)- Ending work in process inventory (3500)

In case 2 Goods available for sale is not given & also Beginning finished goods inventory , Cost of gods manufactured also not given but alraedy calculated in above step it is 22500

First calculate Goods available for sale by adding cost of goods sold & Ending finished goods inventory.

Like wise we can calculate all the boxes by using above formulas.