Refer to Brief Exercise 2.1. For next year, Bob's Bistro predicts that 50,000 units will be produced with the following total costs: Direct materials Direct labor $100,000 Variable overhead 60,000 Fixed overhead 260,000 Next year, Bob's Bistro expects to purchase $195,500 of direct materials. Pro- jected beginning and ending inventories for irect materials and work in process are as follows: Direct Materials Inven- Work-in-Process Inven- tory tory Beginning $9,500 $4,500 Ending 5,000 2,500 Required: 1. Prepare a statement of cost of goods manufactured in good form. 2. What if the ending inventory of direct materials decreased by $3,000? Which line items on the statement of cost of goods manufac- tured would be affected and in what direction (increase or decrease)?
Refer to Brief Exercise 2.1. For next year, Bob's Bistro predicts that 50,000 units will be produced with the following total costs: Direct materials Direct labor $100,000 Variable overhead 60,000 Fixed overhead 260,000 Next year, Bob's Bistro expects to purchase $195,500 of direct materials. Pro- jected beginning and ending inventories for irect materials and work in process are as follows: Direct Materials Inven- Work-in-Process Inven- tory tory Beginning $9,500 $4,500 Ending 5,000 2,500 Required: 1. Prepare a statement of cost of goods manufactured in good form. 2. What if the ending inventory of direct materials decreased by $3,000? Which line items on the statement of cost of goods manufac- tured would be affected and in what direction (increase or decrease)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Refer to Brief Exercise 2.1. For next year, Bob's Bistro predicts that 50,000
units will be produced with the following total costs:
Direct materials
?
Direct labor
$100,000
Variable overhead
60,000
Fixed overhead
260,000
Next year, Bob's Bistro expects to purchase $195,500 of direct materials. Pro-
jected beginning and ending inventories for direct materials and work in
process are as follows:
Direct Materials Inven- Work-in-Process Inven-
tory
tory.
Beginning
$9,500
$4,500
Ending
5,000
2,500
Required:
1. Prepare a statement of cost of goods manufactured in good form.
2. What if the ending inventory of direct materials decreased by
$3,000? Which line items on the statement of cost of goods manufac-
tured would be affected and in what direction (increase or decrease)?
Transcribed Image Text:Bob's Bistro produces party-sized hoagie sandwiches. For next year, Bob's
Bistro predicts that 50,000 units will be produced with the following total costs:
Direct materials
$200,000
Direct labor
100,000
Variable overhead
60,000
Fixed overhead
260,000
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