Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 2, Problem 14E
The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes:
- Purchased $480,000 of materials.
- Used $434,500 of direct materials in production.
- Incurred $125,000 of direct labor wages.
- Applied factory
overhead at a rate of 40% of direct labor cost. - Transferred $578,000 of work in process to finished goods.
- Sold goods with a cost of $550,000.
- Revenues earned by selling bikes, $910,000.
- Incurred $185,000 of selling expenses.
- Incurred $90,000 of administrative expenses.
- a. Prepare the income statement for Rushmore Biking for the month ending February 28.
- b. Determine the inventory balances on February 28, the end of the first month of operations.
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The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes:
Purchased $430,000 of materials.
Used $389,200 of direct materials in production.
Incurred $112,000 of direct labor wages.
Applied factory overhead at a rate of 35% of direct labor cost.
Transferred $512,500 of work in process to finished goods.
Sold goods with a cost of $487,700.
Revenues earned by selling bikes, $806,900.
Incurred $164,100 of selling expenses.
Incurred $79,800 of administrative expenses.
Prepare the income statement for Rushmore Biking for the month ending February 28. Round your answers to the nearest dollar.
Determine the inventory balances on February 28, the end of the first month of operations. Round your answers to the nearest dollar.
Materials inventory, February 28
$fill in the blank 15
Work in process inventory, February 28
$fill in the blank 16
Finished goods inventory, February 28
The following events took place for Rushmore Biking Inc. duringFebruary, the first month of operations as a producer of road bikes:. Purchased $480,000 of materials.
. Used $434,500 of direct materials in production.. Incurred $125,000 of direct labor wages.. Applied factory overhead at a rate of 40% of direct labor cost.. Transferred $578,000 of work in process to finished goods.
. Sold goods with a cost of $550,000.. Revenues earned by selling bikes, $910,000.. Incurred $185,000 of selling expenses.. Incurred $90,000 of administrative expenses.
a. Prepare the income statement for Rushmore Biking for themonth ending February 28.b. Determine the inventory balances on February 28, the end of thefirst month of operations.
The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes:•Purchased $483,100 of materials.•Used $415,500 of direct materials in production.•Incurred $356,000 of direct labor wages.•Applied factory overhead at a rate of 70% of direct labor cost.•Transferred $979,900 of work in process to finished goods.•Sold goods with a cost of $966,200.•Revenues earned by selling bikes, $1,729,500.•Incurred $415,500 of selling expenses.•Incurred $154,600 of administrative expenses.a. Prepare the income statement for Rushmore Biking Inc. for the month ending February 28. Assume that Rushmore Biking Inc. uses the perpetual inventory method.
Chapter 2 Solutions
Managerial Accounting
Ch. 2 - A. Name two principal types of cost accounting...Ch. 2 - What kind of firm would use a job order cost...Ch. 2 - Which account is used in the job order cost system...Ch. 2 - What document is the source for (A) debiting the...Ch. 2 - What is a job cost sheet?Ch. 2 - Prob. 6DQCh. 2 - Discuss how the predetermined factory overhead...Ch. 2 - A. How is a predetermined factory overhead rate...Ch. 2 - Prob. 9DQCh. 2 - Describe how a job order cost system can be used...
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