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

Trundle Corporation manufactures one product.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 concerning raw materials: a.Purchased 99,100 pounds of raw material at a price of $7.90 per pound. b.Used 89,020 pounds of the raw material to produce 34,200 units of work in process. Required: 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).

Dews 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 fixed manufacturing overhead standards for the company's only product specify 0.90 hours per unit at $20.50 per hour.The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $369,000 and budgeted activity of 18,000 hours.During the year,14,100 units were started and completed.Actual fixed overhead costs for the year were $386,200. 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 fixed manufacturing overhead cost is recorded,which of the following entries will be made?

Newbery 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 fixed manufacturing overhead standards for the company's only product specify 0.60 hours per unit at $9.50 per hour.The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $199,500 and budgeted activity of 21,000 hours.During the year,44,000 units were started and completed.Actual fixed overhead costs for the year were $216,200. 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 fixed manufacturing overhead cost is recorded,which of the following entries will be made?

When Raw Materials,Work in Process,and Finished Goods are recorded and carried at their standard cost,the actual prices paid for inputs and the actual quantities of inputs that are used in production affect the costs recorded in the inventory accounts.

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 Finished Goods account will be closest to:

Sobus 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 fixed manufacturing overhead standards for the company's only product specify 0.70 hours per unit at $4.00 per hour.The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $70,000 and budgeted activity of 17,500 hours.During the year,19,700 units were started and completed.Actual fixed overhead costs for the year were $57,700. 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:

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 Raw Materials inventory account will increase (decrease)by:

Robnett 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 106,900 liters of raw material at a price of $6.80 per liter. b. Used 93,760 liters of the raw material to produce 24,700 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:

Grafton Corporation 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 $38.85.During the year,the company produced and sold 28,200 units at a price of $50.10 per unit and its selling and administrative expenses totaled $120,000.The company does not have any variable manufacturing overhead costs.It recorded the following variances during the year: Required: Prepare an income statement for the year.

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 Work in Process account will be closest to:

Ferrini 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 $82,500 and budgeted activity of 7,500 hours. During the year,the company completed the following transactions: a.Purchased 57,700 pounds of raw material at a price of $8.50 per pound. b.Used 52,750 pounds of the raw material to produce 19,500 units of work in process. c.Assigned direct labor costs to work in process.The direct labor workers (who were paid in cash)worked 9,950 hours at an average cost of $20.70 per hour. d.Applied fixed overhead to the 19,500 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 $97,100.Of this total,-$12,900 related to items such as insurance,utilities,and indirect labor salaries that were all paid in cash and $110,000 related to depreciation of manufacturing equipment. e.Transferred 19,500 units from work in process to finished goods. f.Sold for cash 20,200 units to customers at a price of $44.20 per unit. g.Completed and transferred the standard cost associated with the 20,200 units sold from finished goods to cost of goods sold. h.Paid $61,000 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.

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 the raw materials used in production are recorded in transaction (b)above,which of the following entries will be made?

Kita 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 assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 24,820 hours at an average cost of $21.20 per hour. 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 direct labor costs,the Cash account will increase (decrease)by:

Kellems 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:

Robins 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 $360,000 and budgeted activity of 20,000 hours. During the year, the company completed the following transactions: a. Purchased 134,700 pounds of raw material at a price of $9.10 per pound. b. Used 122,080 pounds of the raw material to produce 32,100 units of work in process. c. Assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 26,680 hours at an average cost of $17.20 per hour. d. Applied fixed overhead to the 32,100 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 $378,400. Of this total, $297,400 related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $81,000 related to depreciation of manufacturing equipment. e. Completed and transferred 32,100 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 direct labor costs in transaction (c)above,the Work in Process inventory account will increase (decrease)by:

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: -When the company closes its standard cost variances,the Cost of Goods Sold will increase (decrease)by:

Ladue 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 3.6 kilos per unit at $7.00 per kilo.During the year,the company purchased 67,600 kilos of raw material at a price of $6.40 per kilo and used 60,220 kilos of the raw material to produce 16,700 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 recording the raw materials used in production,the Work in Process inventory account will increase (decrease)by:

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 used in production in transaction (b)above,the Work in Process inventory account will increase (decrease)by:

Mccreary 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 standard cost of the company's product is $28.00per unit.During the year the company sold 27,500 units at $36.30 per unit.The actual selling and administrative expenses were $121,000 for the year.The company does not have any variable manufacturing overhead costs and it recorded the following variances during the year: The net operating income for the year is closest to:

Siciliano Corporation manufactures one product.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 concerning raw materials: a.Purchased 34,800 kilos of raw material at a price of $4.60 per kilo. b.Used 32,750 kilos of the raw material to produce 21,900 units of work in process. Required: 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).