ACC 2140 Week 1 Homework problems
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ACC2140CHP18HomeworkProblemsTemplate.xlsxE18-17
| Chapter 18 Homework Problems (20 points total) | |
| You must complete all fields highlighted in this green | |
| Answers in red have been provided for you by the instructor | |
| Name: | |
| E18-17 (1 point) | |
| Determine the company type. Identify each company as a service company, merchandising company, or manufacturing company. | |
| Solution: | |
| COMPANY | TYPE |
| A | |
| B | |
| C | |
&"Arial,Bold"&12HORNGREN'S ACCOUNTING - Eleventh Edition
&"Arial,Bold"&10Chapter 18: Introduction to Managerial Accounting &"Arial,Bold"&10Page &P of &N
E18-18
| E18-18 (2 points) |
| Calculate operating income for each company. |
| Solution: |
| Company A (all amounts in millions) |
| Amount |
| Sales Revenue |
| Cost of Goods Sold |
| Gross Profit |
| Operating Expenses |
| Selling Expense |
| Administrative Expenses |
| Total Operating Expenses |
| Operating Income |
| Company B (all amounts in millions) |
| Amount |
| Service Revenue |
| Operating Income |
| Company C (all amounts in millions) |
| Amount |
| Sales Revenue |
&"Arial,Bold"&12HORNGREN'S ACCOUNTING - Eleventh Edition
&"Arial,Bold"&10Chapter 18: Introduction to Managerial Accounting &"Arial,Bold"&10Page &P of &N
E18-19
| E18-19 (2 points) |
| Calculate total current assets for each company. |
| Solution: |
| Company A (all amounts in millions): |
| Amount |
| Cash |
| Accounts Receivable |
| Raw Material Inventory |
| Work-in-Process |
| Finished Goods Inventory |
| Total Current Assets |
| Company B (all amounts in millions): |
| Amount |
| Company C (all amounts in millions): |
| Amount |
&"Arial,Bold"&12HORNGREN'S ACCOUNTING - Eleventh Edition
&"Arial,Bold"&10Chapter 18: Introduction to Managerial Accounting &"Arial,Bold"&10Page &P of &N
E18-20
| E18-20 (5 points) | ||||||
| Wheels, Inc. manufactures wheels for bicycles, tricycles, and scooters. For each cost given below, determine if the cost is a product cost or a period cost. If the cost is a product cost, further determine if the cost is direct materials (DM), direct labor (DL), or manufacturing overhead (MOH) and then determine if the product cost is a prime cost, conversion cost, or both. If the cost is a period cost, further determine if the cost is a selling expense or administrative expense (Admin). Cost (a) is answered as a guide. | ||||||
| Solution: | ||||||
| Cost | PRODUCT | PERIOD | ||||
| DM | DL | MOH | Prime | Conv | Selling | Admin |
| a. Metal used for rims | X | X | ||||
| b. Sales salaries | ||||||
| c. Rent on factory | ||||||
| d. Wages of assembly workers | ||||||
| e. Salary of production supervisor | ||||||
| f. Depreciation on office equipment | ||||||
| g. Salary of CEO | ||||||
| h. Delivery expense | ||||||
| Note: On this problem some green boxes will remain blank. Place an "X" in the appropriate box. |
&"Arial,Bold"&12HORNGREN'S ACCOUNTING - Eleventh Edition
&"Arial,Bold"&10Chapter 18: Introduction to Managerial Accounting &"Arial,Bold"&10Page &P of &N
E18-25
| E18-25 (4 points) | |
| Requirements | |
| 1. | Calculate the operating income for 2016. |
| 2. | White sold 5,400 brushes in 2016. Compute the unit cost for one brush. |
| Solution: | |
| Requirement 1 | |
| Amount | |
| Sales Revenue | |
| Cost of Goods Sold: | |
| Beginning Merchandise Inventory | |
| Purchases | |
| Operating Income | |
| Requirement 2 | |
| Unit Cost for One Brush = Cost of Goods Sold / Total Units Sold | |
| Amount | |
| Cost of Goods Sold | |
| Total Units Sold | |
| Cost per Unit | |
&"Arial,Bold"&12HORNGREN'S ACCOUNTING - Eleventh Edition
&"Arial,Bold"&10Chapter 18: Introduction to Managerial Accounting &"Arial,Bold"&10Page &P of &N
P18-31A
| P18-31A (6 points) | |
| Requirements | |
| 1. | Prepare a schedule of cost of goods manufactured for Yum Yum Treats for the year ended December 31, 2016 |
| 2. | Prepare an income statement for Yum Yum Treats for the year ended December 31, 2016. |
| 3. | How does the format of the income statement for Yum Yum Treats differ from the income statement of a merchandiser? |
| 4. | Yum Yum Treats manufactured 17,600 units of its product in 2016. Compute the company's unit product cost for the year. |
| Solution: | |
| Requirement 1 | |
| YUM YUM TREATS | |
| Schedule of Cost of Goods Manufactured | |
| Year Ended December 31, 2016 | |
| Beginning Work-in-Process Inventory | |
| Direct Materials Used: | |
| Beginning Raw Materials Inventory | |
| Purchases of Raw Material | |
| Total Manufacturing Costs Incurred During the Year | |
| Requirement 2 | |
| YUM YUM TREATS | |
| Income Statement | |
| Year Ended December 31, 2016 | |
| Revenues: | |
| Sales Revenue | |
| Total Net Income (Loss) | |
| Requirement 3 | |
| Put narrative answer below | |
| Requirement 4 | |
| Unit Cost for One Brush = Cost of Goods Manufactured / Total Units Produced | |
| Amount | |
&"Arial,Bold"&12HORNGREN'S ACCOUNTING - Eleventh Edition
&"Arial,Bold"&10Chapter 18: Introduction to Managerial Accounting &"Arial,Bold"&10Page &P of &N
