Exam 25: Standard Cost Systems: a Financial Reporting Perspective Using Microsoft Excel

Jakeman Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows: The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $351,000 and budgeted activity of 27,000 hours. During the year, the company completed the following transactions: a. Purchased 76,600 gallons of raw material at a price of $7.90 per gallon. b. Used 70,960 gallons of the raw material to produce 20,900 units of work in process. c. Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 18,710 hours at an average cost of $19.40 per hour. d. Applied fixed overhead to the 20,900 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $334,600. Of this total, $252,600 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $82,000 related to depreciation of manufacturing equipment. e. Completed and transferred 20,900 units from work in process to finished goods. f. Sold (for cash) 17,700 units to customers at a price of $74.30 per unit. g. Transferred the standard cost associated with the 17,700 units sold from finished goods to cost of goods sold. h. Paid $93,000 of selling and administrative expenses. i. Closed all standard cost variances to cost of goods sold. The company calculated the following variances for the year: To answer the following questions, it would be advisable to record transactions a through i in the worksheet below. This worksheet is similar to the worksheets in your text except that it has been split into two parts to fit on the page. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. -When the company closes its standard cost variances,the Cost of Goods Sold will increase (decrease)by:

Pioli Corporation manufactures one product.It does not maintain any beginning or ending Work in Process inventories.The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.There is no variable manufacturing overhead.The standard cost card for the company's only product is as follows: The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $132,000 and budgeted activity of 12,000 hours. During the year,the company completed the following transactions: a.Purchased 22,300 kilos of raw material at a price of $7.40 per kilo. b.Used 20,800 kilos of the raw material to produce 9,500 units of work in process. c.Assigned direct labor costs to work in process.The direct labor workers (who were paid in cash)worked 6,900 hours at an average cost of $19.80 per hour. d.Applied fixed overhead to the 9,500 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed.Actual fixed overhead costs for the year were $143,000.Of this total,$60,000 related to items such as insurance,utilities,and indirect labor salaries that were all paid in cash and $83,000 related to depreciation of manufacturing equipment. e.Transferred 9,500 units from work in process to finished goods. f.Sold for cash 10,100 units to customers at a price of $54.30 per unit. g.Completed and transferred the standard cost associated with the 10,100 units sold from finished goods to cost of goods sold. h.Paid $43,000 of selling and administrative expenses. i.Closed all standard cost variances to cost of goods sold. Required: 1.Compute all direct materials,direct labor,and fixed overhead variances for the year. 2.Record the above transactions in the worksheet that appears below.Because of the width of the worksheet,it is in two parts.In your text,these two parts would be joined side-by-side to make one very wide worksheet.The beginning balances have been provided for each of the accounts,including the Property,Plant,and Equipment (net)account which is abbreviated as PP&E (net). 3.Determine the ending balance (e.g.,12/31 balance)in each account. 4.Prepare an income statement for the year.

Woodhead Inc. manufactures one product. It does not maintain any beginning or ending inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. Its standard cost per unit produced is $37.45. During the year, the company produced and sold 24,400 units at a price of $47.40 per unit and its selling and administrative expenses totaled $92,000. The company does not have any variable manufacturing overhead costs. It recorded the following variances during the year: -The adjusted Cost of Goods Sold after closing all of the variances to Cost of Goods Sold will be closest to:

Sousa Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The standards for direct materials for the company's only product specify 2.8 kilos per unit at $7.50 per kilo or $21.00 per unit.During the year,the company purchased 82,100 kilos of raw material at a price of $7.40 per kilo and used 78,020 kilos of the raw material to produce 27,900 units of work in process. Assume that all transactions are recorded on a worksheet as shown in the text.On the left-hand side of the equals sign in the worksheet are columns for Cash,Raw Materials,Work in Process,Finished Goods,and PP&E (net).All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings. When the raw materials used in production are recorded,which of the following entries will be made?

Alvino Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows: The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $70,000 and budgeted activity of 14,000 hours. During the year, the company completed the following transactions: a. Purchased 32,200 kilos of raw material at a price of $7.80 per kilo. The materials price variance was $22,540 F. b. Used 30,480 kilos of the raw material to produce 27,800 units of work in process. The materials quantity variance was $850 F. c. Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 18,260 hours at an average cost of $20.50 per hour. The direct labor rate variance was $9,130 U. The labor efficiency variance was $24,000 F. d. Applied fixed overhead to the 27,800 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $59,500. Of this total, -$22,500 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $82,000 related to depreciation of manufacturing equipment. The fixed manufacturing overhead budget variance was $10,500 F. The fixed manufacturing overhead volume variance was $27,300 F. e. Completed and transferred 27,800 units from work in process to finished goods. f. Sold (for cash) 29,000 units to customers at a price of $31.90 per unit. g. Transferred the standard cost associated with the 29,000 units sold from finished goods to cost of goods sold. h. Paid $101,000 of selling and administrative expenses. i. Closed all standard cost variances to cost of goods sold. To answer the following questions, you will need to record transactions a through i in the worksheet below. This worksheet is similar to the worksheets in your text except that it has been split into two parts to fit on the page. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. -The ending balance in the Retained Earnings account at the end of the year is closest to:

Dougher Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The standard cost card for the company's only product is as follows: During the year,the company started and completed 26,900 units.Direct labor employees worked 14,250 hours at an average cost of $20.20 per hour. Assume that all transactions are recorded on a worksheet as shown in the text.On the left-hand side of the equals sign in the worksheet are columns for Cash,Raw Materials,Work in Process,Finished Goods,and PP&E (net).All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings. When the direct labor cost is recorded,which of the following entries will be made?

Alvino Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows: The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $70,000 and budgeted activity of 14,000 hours. During the year, the company completed the following transactions: a. Purchased 32,200 kilos of raw material at a price of $7.80 per kilo. The materials price variance was $22,540 F. b. Used 30,480 kilos of the raw material to produce 27,800 units of work in process. The materials quantity variance was $850 F. c. Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 18,260 hours at an average cost of $20.50 per hour. The direct labor rate variance was $9,130 U. The labor efficiency variance was $24,000 F. d. Applied fixed overhead to the 27,800 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $59,500. Of this total, -$22,500 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $82,000 related to depreciation of manufacturing equipment. The fixed manufacturing overhead budget variance was $10,500 F. The fixed manufacturing overhead volume variance was $27,300 F. e. Completed and transferred 27,800 units from work in process to finished goods. f. Sold (for cash) 29,000 units to customers at a price of $31.90 per unit. g. Transferred the standard cost associated with the 29,000 units sold from finished goods to cost of goods sold. h. Paid $101,000 of selling and administrative expenses. i. Closed all standard cost variances to cost of goods sold. To answer the following questions, you will need to record transactions a through i in the worksheet below. This worksheet is similar to the worksheets in your text except that it has been split into two parts to fit on the page. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. -The ending balance in the Raw Materials account will be closest to:

Alvino Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows: The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $70,000 and budgeted activity of 14,000 hours. During the year, the company completed the following transactions: a. Purchased 32,200 kilos of raw material at a price of $7.80 per kilo. The materials price variance was $22,540 F. b. Used 30,480 kilos of the raw material to produce 27,800 units of work in process. The materials quantity variance was $850 F. c. Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 18,260 hours at an average cost of $20.50 per hour. The direct labor rate variance was $9,130 U. The labor efficiency variance was $24,000 F. d. Applied fixed overhead to the 27,800 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $59,500. Of this total, -$22,500 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $82,000 related to depreciation of manufacturing equipment. The fixed manufacturing overhead budget variance was $10,500 F. The fixed manufacturing overhead volume variance was $27,300 F. e. Completed and transferred 27,800 units from work in process to finished goods. f. Sold (for cash) 29,000 units to customers at a price of $31.90 per unit. g. Transferred the standard cost associated with the 29,000 units sold from finished goods to cost of goods sold. h. Paid $101,000 of selling and administrative expenses. i. Closed all standard cost variances to cost of goods sold. To answer the following questions, you will need to record transactions a through i in the worksheet below. This worksheet is similar to the worksheets in your text except that it has been split into two parts to fit on the page. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. -The ending balance in the Work in Process account will be closest to:

Neuhaus Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows: During the year, the company completed the following transactions: a. Purchased 52,900 gallons of raw material at a price of $7.60 per gallon. b. Used 46,820 gallons of the raw material to produce 27,600 units of work in process. Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. -When recording the raw materials purchases in transaction (a)above,the Cash account will increase (decrease)by:

Arena Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows: The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $81,000 and budgeted activity of 18,000 hours. During the year, the company completed the following transactions: a. Purchased 35,400 pounds of raw material at a price of $4.60 per pound. b. Used 32,180 pounds of the raw material to produce 26,900 units of work in process. c. Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 23,810 hours at an average cost of $20.60 per hour. d. Applied fixed overhead to the 26,900 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $67,800. Of this total, $3,800 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $64,000 related to depreciation of manufacturing equipment. e. Completed and transferred 26,900 units from work in process to finished goods. f. Sold (for cash) 27,100 units to customers at a price of $36.60 per unit. g. Transferred the standard cost associated with the 27,100 units sold from finished goods to cost of goods sold. h. Paid $149,000 of selling and administrative expenses. i. Closed all standard cost variances to cost of goods sold. The company calculated the following variances for the year: To answer the following questions, you will need to record transactions a through i in the worksheet below. This worksheet is similar to the worksheets in your text except that it has been split into two parts to fit on the page. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. -The ending balance in the Cash account will be closest to:

Lakatos Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the company's only product contains the following information concerning direct materials: During the year, the company completed the following transactions concerning direct materials: a. Purchased 151,800 kilos of raw material at a price of $9.70 per kilo. b. Used 140,870 kilos of the raw material to produce 38,100 units of work in process. The company calculated the following direct materials variances for the year: Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. -When recording the raw materials purchases in transaction (a)above,the Cash account will increase (decrease)by:

Karim Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The standard cost card for the company's only product is as follows: During the year,the company started and completed 31,500 units.Direct labor employees worked 23,650 hours at an average cost of $19.50 per hour. Assume that all transactions are recorded on a worksheet as shown in the text.On the left-hand side of the equals sign in the worksheet are columns for Cash,Raw Materials,Work in Process,Finished Goods,and PP&E (net).All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings. When recording the direct labor costs,the Work in Process inventory account will increase (decrease)by:

Bohon Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the company's only product contains the following information concerning direct materials: During the year, the company completed the following transactions concerning direct materials: a. Purchased 19,700 pounds of raw material at a price of $4.70 per pound. b. Used 18,500 pounds of the raw material to produce 18,400 units of work in process. The company calculated the following direct materials variances for the year: Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. -When recording the raw materials used in production in transaction (b)above,the Work in Process inventory account will increase (decrease)by:

Neuhaus Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows: During the year, the company completed the following transactions: a. Purchased 52,900 gallons of raw material at a price of $7.60 per gallon. b. Used 46,820 gallons of the raw material to produce 27,600 units of work in process. Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. -When recording the raw materials purchases in transaction (a)above,the Raw Materials inventory account will increase (decrease)by:

Shankland Corporation manufactures one product.It does not maintain any beginning or ending Work in Process inventories.The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.There is no variable manufacturing overhead.The standard cost card for the company's only product is as follows: The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $67,500 and budgeted activity of 7,500 hours.During the year,24,600 units were started and completed.Actual fixed overhead costs for the year were $84,800. Assume that all transactions are recorded on a worksheet as shown in the text.On the left-hand side of the equals sign in the worksheet are columns for Cash,Raw Materials,Work in Process,Finished Goods,and PP&E (net).All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings. When applying fixed manufacturing overhead to production,the Work in Process inventory account will increase (decrease)by:

Signore Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The standard cost card for the company's only product is as follows: During the year,the company purchased 34,600 gallons of raw material at a price of $9.10 per gallon and used 30,050 gallons of the raw material to produce 20,100 units of work in process. Assume that all transactions are recorded on a worksheet as shown in the text.On the left-hand side of the equals sign in the worksheet are columns for Cash,Raw Materials,Work in Process,Finished Goods,and PP&E (net).All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings. When the purchase of raw materials is recorded,which of the following entries will be made?

Ciresi Corporation manufactures one product.It does not maintain any beginning or ending Work in Process inventories.The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The company has provided the following information: The company does not have any variable manufacturing overhead costs and it recorded the following variances during the year: The adjusted Cost of Goods Sold after closing all of the variances to Cost of Goods Sold will be closest to:

Eagan Corporation manufactures one product.The company uses a standard cost system in which inventories are recorded at their standard costs.The standard cost card for the company's only product is as follows: During the year,direct labor workers (who were paid in cash)worked 11,250 hours at an average cost of $19.70 per hour on 22,300 units.These units were started and completed during the year. Required: Completely record the direct labor costs,along with any direct labor variances,in the below worksheet.Because of the width of the worksheet,it is in two parts.In your text,these two parts would be joined side-by-side to make one very wide worksheet.The beginning balances have been provided for each of the accounts,including the Property,Plant,and Equipment (net)account which is abbreviated as PP&E (net).

Jakeman Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows: The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $351,000 and budgeted activity of 27,000 hours. During the year, the company completed the following transactions: a. Purchased 76,600 gallons of raw material at a price of $7.90 per gallon. b. Used 70,960 gallons of the raw material to produce 20,900 units of work in process. c. Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 18,710 hours at an average cost of $19.40 per hour. d. Applied fixed overhead to the 20,900 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $334,600. Of this total, $252,600 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $82,000 related to depreciation of manufacturing equipment. e. Completed and transferred 20,900 units from work in process to finished goods. f. Sold (for cash) 17,700 units to customers at a price of $74.30 per unit. g. Transferred the standard cost associated with the 17,700 units sold from finished goods to cost of goods sold. h. Paid $93,000 of selling and administrative expenses. i. Closed all standard cost variances to cost of goods sold. The company calculated the following variances for the year: To answer the following questions, it would be advisable to record transactions a through i in the worksheet below. This worksheet is similar to the worksheets in your text except that it has been split into two parts to fit on the page. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. -The net operating income for the year is closest to:

Phann Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows: The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $90,000 and budgeted activity of 7,500 hours. During the year, the company completed the following transactions: a. Purchased 59,000 kilos of raw material at a price of $9.20 per kilo. b. Used 51,340 kilos of the raw material to produce 18,300 units of work in process. c. Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 8,850 hours at an average cost of $23.70 per hour. d. Applied fixed overhead to the 18,300 units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed. Actual fixed overhead costs for the year were $79,400. Of this total, $22,400 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $57,000 related to depreciation of manufacturing equipment. e. Completed and transferred 18,300 units from work in process to finished goods. Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. -When recording the raw materials purchases in transaction (a)above,the Raw Materials inventory account will increase (decrease)by: