**Accounting Records of Willow Creek Co. - Educational Resource**The following data are available from the accounting records of Willow Creek Co. for the month ended May 31. During the accounting period, 17,000 units were manufactured and sold at a price of $60 per unit. There were no beginning inventories, and all units were completed (no work in process).### Cost Breakdown#### Manufacturing Costs:| Cost Type | Total Cost | Number of Units | Unit Cost ||------------|------------|-----------------|-----------||**Variable**| $442,000 | 17,000 | $26 ||**Fixed** | $170,000 | 17,000 | $10 ||**Total** | $612,000 | - | $36 |#### Selling and Administrative Expenses:| Cost Type | Total Cost ||------------|------------||**Variable ($2 per unit sold)** | $34,000 ||**Fixed** | $32,000 ||**Total** | $66,000 |### Income Statement Preparation:**Willow Creek Co.** **Variable Costing Income Statement** **For the Month Ended May 31**| Description | Amount | |---------------------------------|------------|| Sales (17,000 units at $60) | $1,020,000 || Less: Variable Costs | - || - Manufacturing Costs ($442,000)| $442,000 || - Selling & Administration ($34,000)| $34,000 || Total Variable Costs | $476,000 || Contribution Margin | $544,000 || Less: Fixed Costs | - || - Manufacturing Costs ($170,000)| $170,000 || - Selling & Administration ($32,000)| $32,000 || Total Fixed Costs | $202,000 || Net Operating Income | $342,000 | ### Educational Resource on Income Statements#### a. Variable Costing Income StatementTo prepare a Variable Costing Income Statement, we follow these steps:1. **Sales**: Record the total sales revenue.2. **Variable Costs**: Record and subtract the total variable costs.3. **Manufacturing Margin**: The difference between sales and variable costs.4. **Fixed Costs**: Subtract fixed costs from the manufacturing margin to get the income from operations.#### b. Absorption Costing Income StatementTo prepare an Absorption Costing Income Statement, follow these steps:1. **Willow Creek Co.**2. **Absorption Costing Income Statement**: 3. **For the Month Ended May 31**: This heading specifies the period covered by the statement.4. **Sales**: Record the total sales revenue.5. **Less: Cost of Goods Sold**: Record the cost of goods sold and subtract it from sales.6. **Gross Profit**: The difference between sales and cost of goods sold.7. **Less: Selling and Administrative Expenses**: Subtract selling and administrative expenses from gross profit.8. **Income from Operations**: The final income from operations after subtracting selling and administrative expenses.### Example: Filling in ValuesLet us assume we have the following hypothetical data to complete the income statements:**Variable Costing Income Statement**1. Sales: $ \_\_\_\_\_\_\_\_ $2. Variable Costs: $ \_\_\_\_\_\_\_\_ $3. Manufacturing Margin: $ \_\_\_\_\_\_\_\_ $4. Fixed Costs: - Fixed Manufacturing Costs: $ \_\_\_\_\_\_\_\_ $ - Fixed Selling and Administrative Costs: $ \_\_\_\_\_\_\_\_ $5. Income from Operations: $ \_\_\_\_\_\_\_\_ $**Absorption Costing Income Statement (Willow Creek Co.)**1. Sales: $ \_\_\_\_\_\_\_\_ $2. Less: Cost of Goods Sold: $ \_\_\_\_\_\_\_\_ $3. Gross Profit: $ \_\_\_\_\_\_\_\_ $4. Less: Selling and Administrative Expenses: $ \_\_\_\_\_\_\_\_ $5. Income from Operations: \( \_\_\_\_\_\_\

Variable Costing -Under Variable Costing Method That Only Includes Variable Overhead Incurred In…

The following data are available from the accounting records of Willow Creek Co. for the month ended May 31. During the accounting period, 17,000 units were manufacture and sold at a price of $60 per unit. There were no beginning inventories, and all units were completed (no work in process). Cost Total Cost Number of Units Unit Cost

The following data are available from the accounting records of Willow Creek Co. for the month ended May 31. During the accounting period, 17,000 units were manufacture and sold at a price of $60 per unit. There were no beginning inventories, and all units were completed (no work in process). Cost Total Cost Number of Units Unit Cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Lights Incorporated calculates cost for an equivalent unit of production using the welghted-average method. Data for July: Work-in-process inventory, July 1 (36,000 units): Direct materials (100% completed) $ 122,400 Conversion (5e% completed) 76,800 Balance in work in process inventory, July 1 $ 199, 200 Units started during July Units completed and transferred Work-in-process inventory, July 31: 90,000 102,000 Direct materials (180% completed) Conversion (50% completed) Cost incurred during July: 24,000 Direct materials $ 180,000 Conversion costs 288, 000 Cost per equlvalent unit for materials under the welghted-average method is calculated to be: Multiple Choice $3.10. O $3.20. O $2.00. O $240. $3.00.
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost Beginning and ending inventory balances were as follows: Raw materials Work in process Finished goods Beginning $ 59,000 ? $ 31,000 Ending $ 38,000 $ 25,000 ? $ 215,000 $ 261,000 ? $ 154,000 $ 376,000 $ 358,000 The total manufacturing costs added to production for the year were $670,000; the cost of goods available for sale totaled $735,000; the unadjusted cost of goods sold totaled $664,000; and the net operating income was $32,000. The company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods…
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost Inventory balances at the beginning and end of the year were as follows: Raw materials Work in process Finished goods Beginning $ 60,000 ? $ 40,000 Income Statement Ending $ 37,000 $ 32,000 ? The total manufacturing costs added to production for the year were $685,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $668,000; and the net operating income was $30,000. The company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. COGS Schedule Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.…
During March, the following costs were charged to the manufacturing department: $15,480 for materials; $14,900 for labor; and $13,900 for manufacturing overhead. The records show that 31,000 units were completed and transferred, while 3,400 remained in ending inventory. There were 34,400 equivalent units of material and 32,360 of conversion costs. Using the weighted-average method, what is the cost of inventory transferred and the balance in work in process inventory? When required, round cost per unit to two decimal places and the final answers to the nearest dollar. Cost of inventory transferred $fill in the blank 1 Balance in work in process $fill in the blank 2
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Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost Inventory balances at the beginning and end of the year were as follows: Ending $ 38,000 $ 33,000 ? Raw materials in process Finished goods Beginning $ 54,000 ? $ 33,000 $ 217,000 $ 264,000 ? $152,000 $368,000 $ 353,000 The total manufacturing costs added to production for the year were $675,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $661,000; and the net operating income was $35,000. The company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost…
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 140,000 Purchases of raw materials $ 290,000 Direct labor ? Administrative expenses $ 100,000 Manufacturing overhead applied to work in process $ 285,000 Actual manufacturing overhead cost $ 270,000 Inventory balances at the beginning and end of the year were as follows: Beginning Ending Raw materials $ 40,000 $ 10,000 Work in process ? $ 35,000 Finished goods $ 50,000 ? The total manufacturing costs added to production for the year were $683,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $660,000; and the net operating income was $30,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint:…
The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct-labor hours as its cost driver for overhead costs. Month January February March April May June Direct-Labor Hours 37,000 39,000 52,000 40,000 44,000 42,000 March's costs consisted of machine supplies ($296,400), depreciation ($32,500), and plant maintenance ($570,100). These costs exhibit the following respective behavior: variable, fixed, and semivariable. Manufacturing Overhead $701,000 740,000 899,000 754, 250 805,500 802,500 The manufacturing overhead figures presented in the preceding table do not include Metcalf's supervisory labor cost, which is step- fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $77,500. The cost is $155,000 from 15,000- 29,999 hours and $232,500 when activity reaches 30,000 hours or more. Required: 4. 1. Determine the machine supplies cost and depreciation for January. 2. Using the high-low method,…
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost Inventory balances at the beginning and end of the year were as follows: Ending $ 31,000 $ 27,000 ? Raw materials. Work in process Finished goods Beginning $ 55,000 ? $ 34,000 The total manufacturing costs added to production for the year were $685,000; the cost of goods available for sale totaled $720,000; the unadjusted cost of goods sold totaled $668,000; and the net operating income was $37,000. The company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule…
The following information is available for Ethtridge Manufacturing Company for the month ending July 31: Cost of direct materials used in production $1,150,000 Direct labor 966,000 Work in process inventory, July 1 316,400 Work in process inventory, July 31 355,500 Total factory overhead 490,500 Determine Ethtridge's cost of goods manufactured for the month ended July 31. Ethtridge Manufacturing CompanyStatement of Cost of Goods ManufacturedFor the Month Ended July 31 $- Select - Add manufacturing costs incurred during July: $- Select - - Select - - Select - Total manufacturing costs incurred fill in the blank 9 Total manufacturing costs $fill in the blank 10 - Select - Cost of goods manufactured $fill in the blank 13
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