Cost of Goods Manufactured, Cost Identification, Solving for Unknowns Objective 2 - Explain the cost assignment process., 4 - Prepare income statements for manufacturing and service organizations. Allight Test Design Company creates, produces, and sells Intemet-based CPA and CMA review courses for individual use. Davis Webber, head of human resources, is convinced that question development employees must have strong analytical and problem-solving skills. He asked Andrea Benson, controller for Allright Test Design, to help develop problems for use in screening applicants before they are interviewed. One of the problems Andrea developed is based on the following data for a mythical company (Mythic, Inc.) for the previous year: a. Conversion cost was $140,000 and was four times the prime cost, b. Direct materials used in production equaled $5,000. c. Cost of goods manufactured was $154,000. d. Ending work in process is 40 percent of the cost of beginning work in process. e. There are no beginning or ending inventories for direct materials. f. Cost of goods sold was 110 percent of cost of goods manufactured. g. Beginning finished goods inventory was S22,400. Required: 1. Using the above information, prepare a cost of goods manufactured statement. 2. Using the above information, prepare a cost of goods sold statement.
Cost of Goods
Objective 2 - Explain the cost assignment process., 4 - Prepare income
statements for manufacturing and service organizations.
Allight Test Design Company creates, produces, and sells Intemet-based
CPA and CMA review courses for individual use. Davis Webber, head of
human resources, is convinced that question development employees must
have strong analytical and problem-solving skills. He asked Andrea Benson,
controller for Allright Test Design, to help develop problems for use in
screening applicants before they are interviewed. One of the problems Andrea
developed is based on the following data for a mythical company (Mythic, Inc.)
for the previous year:
a. Conversion cost was $140,000 and was four times the prime cost,
b. Direct materials used in production equaled $5,000.
c. Cost of goods manufactured was $154,000.
d. Ending work in process is 40 percent of the cost of beginning work in
process.
e. There are no beginning or ending inventories for direct materials.
f. Cost of goods sold was 110 percent of cost of goods manufactured.
g. Beginning finished goods inventory was S22,400.
Required:
1. Using the above information, prepare a cost of goods manufactured
statement.
2. Using the above information, prepare a cost of goods sold statement.
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