A review of the accounting records of Fanning Manufacturing indicated that the company incurred the following...
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A review of the accounting records of Fanning Manufacturing indicated that the company incurred the following payroll costs during the month of March. Assume the company's financial statements are prepared in accordance with GAAP. 1. Salary of the company president-$31,400. 2. Salary of the vice president of manufacturing-$15,800 3. Salary of the chief financial officer-$19,300. 4. Salary of the vice president of marketing-$15,600. 5. Salaries of middle managers (department heads, production supervisors) in manufacturing plant-$198,000. 6. Wages of production workers-$944,000. 7. Salaries of administrative secretaries-$110,000. 8. Salaries of engineers and other personnel responsible for maintaining production equipment-$176,000. 9. Commissions paid to sales staff-$250,000. 4 Required a. What amount of payroll cost would be classified as SG&A expense? b. Assuming that Fanning made 4,400 units of product and sold 3,960 of them during the month of March, determine the amount of payroll cost that would be included in cost of goods sold. (Do not round intermediate calculations.) Vernon Manufacturing Company began operations on January 1. During the year, it started and completed 1,760 units of product. The financial statements are prepared in accordance with GAAP. The company incurred the following costs: 1. Raw materials purchased and used-$3,240. 2. Wages of production workers-$3,590. 3. Salaries of administrative and sales personnel-$1.985. 4. Depreciation on manufacturing equipment-$4,962 5. Depreciation on administrative equipment-$1,810 Vernon sold 1,190 units of product. Required a. Determine the total product cost for the year. b. Determine the total cost of the ending inventory. (Do not round intermediate calculations.) c. Determine the total of cost of goods sold. (Do not round intermediate calculations.) During year 1, Finch Manufacturing Company incurred $131,600,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in year 1. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $62 per unit. Packaging, shipping, and sales commissions are expected to be $14 per unit. Finch expects to sell 2,800,000 batteries before new research renders the battery design technologically obsolete. During year 1, Finch made 432,000 batteries and sold 394,000 of them. Required a. Identify the upstream and downstream costs. b. Determine the year 1 amount of cost of goods sold and the ending inventory balance that would appear on the financial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Finch desires to earn a profit margin that is equal to 25 percent of the total cost of developing, making, and distributing the batteries. 5 d. Prepare a GAAP-based income statement for year 1. Use the sales price developed in Requirement c A review of the accounting records of Fanning Manufacturing indicated that the company incurred the following payroll costs during the month of March. Assume the company's financial statements are prepared in accordance with GAAP. 1. Salary of the company president-$31,400. 2. Salary of the vice president of manufacturing-$15,800 3. Salary of the chief financial officer-$19,300. 4. Salary of the vice president of marketing-$15,600. 5. Salaries of middle managers (department heads, production supervisors) in manufacturing plant-$198,000. 6. Wages of production workers-$944,000. 7. Salaries of administrative secretaries-$110,000. 8. Salaries of engineers and other personnel responsible for maintaining production equipment-$176,000. 9. Commissions paid to sales staff-$250,000. 4 Required a. What amount of payroll cost would be classified as SG&A expense? b. Assuming that Fanning made 4,400 units of product and sold 3,960 of them during the month of March, determine the amount of payroll cost that would be included in cost of goods sold. (Do not round intermediate calculations.) Vernon Manufacturing Company began operations on January 1. During the year, it started and completed 1,760 units of product. The financial statements are prepared in accordance with GAAP. The company incurred the following costs: 1. Raw materials purchased and used-$3,240. 2. Wages of production workers-$3,590. 3. Salaries of administrative and sales personnel-$1.985. 4. Depreciation on manufacturing equipment-$4,962 5. Depreciation on administrative equipment-$1,810 Vernon sold 1,190 units of product. Required a. Determine the total product cost for the year. b. Determine the total cost of the ending inventory. (Do not round intermediate calculations.) c. Determine the total of cost of goods sold. (Do not round intermediate calculations.) During year 1, Finch Manufacturing Company incurred $131,600,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in year 1. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $62 per unit. Packaging, shipping, and sales commissions are expected to be $14 per unit. Finch expects to sell 2,800,000 batteries before new research renders the battery design technologically obsolete. During year 1, Finch made 432,000 batteries and sold 394,000 of them. Required a. Identify the upstream and downstream costs. b. Determine the year 1 amount of cost of goods sold and the ending inventory balance that would appear on the financial statements that are prepared in accordance with GAAP. c. Determine the sales price assuming that Finch desires to earn a profit margin that is equal to 25 percent of the total cost of developing, making, and distributing the batteries. 5 d. Prepare a GAAP-based income statement for year 1. Use the sales price developed in Requirement c
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1 a SGA expense would include the salaries of the company president vice president of manufacturing ... View the full answer
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Olds
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