Managerial Accounting Module 1.3 Activity

I. Cost analysis and identification. 

Georgia Pacific, a manufacturer, incurs the following costs:

a.  Classify each cost as either a product or a period cost. If a product cost, identify it as a 

prime or a conversion cost.

b.  Classify each product cost as either a direct cost or an indirect cost using the product as 

the cost object.

II. Manufacturing statement preparation 

Given the following selected account balances of Randa Company, prepare its manufacturing 

statement for the year ended on December 31, 2013. Include a listing of the individual overhead 

account balances in this statement.

III. Income Statement Preparation

Use the information from problem II above to prepare an income statement for Randa Company 

(a manufacturer). Assume that its cost of goods manufactured is $546,390.

IV. Inventory computation and reporting 

Shown here are annual financial data at December 31, 2013, taken from two different 

companies.

V. Analysis of cost flows

As of the end of June, the job cost sheets at Racing Wheels, Inc. show the following total costs 

accumulated on three custom jobs:

Job 102 was started in production in May and the following costs were assigned to it in 

May: direct materials, $12,000; direct labor, $3,600; and overhead, $1,800. 

  Jobs 103 and 104 are started in June. Overhead cost is applied with a predetermined 

rate based on direct labor cost. 

  Jobs 102 and 103 are finished in June, and Job 104 is expected to be finished in July. 

No raw materials are used indirectly in June. 

Using this information, answer the following questions. (Assume this company’s predetermined 

overhead rate did not change across these months). 

Job 102 was started in production in May and the following costs were assigned to it in 

May: direct materials, $12,000; direct labor, $3,600; and overhead, $1,800. 

  Jobs 103 and 104 are started in June. Overhead cost is applied with a predetermined 

rate based on direct labor cost. 

  Jobs 102 and 103 are finished in June, and Job 104 is expected to be finished in July. 

No raw materials are used indirectly in June. 

Using this information, answer the following questions. (Assume this company’s predetermined 

overhead rate did not change across these months). 

All the details are attached in the document..