Problem 14-1A Cost computation, classification, and analysis C2 C3

Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $500 each.

	Variable or Fixed		Product or Period
Costs	Variable	Fixed	Product	Period
1. Plastic for casing$17,000	$17,000	____	$17,000	____
2. Wages of assembly workers$82,000	____	____	____	____
3. Property taxes on factory$5,000	____	____	____	____
4. Accounting staff salaries$35,000	____	____	____	____
5. Drum stands (1,000 stands purchased)$26,000	____	____	____	____
6. Rent cost of equipment for sales staff$10,000	____	____	____	____
7. Upper management salaries$125,000	____	____	____	____
8. Annual flat fee for factory maintenance service$10,000	____	____	____	____
9. Sales commissions$15 per unit	____	____	____	____
10. Machinery depreciation, straight-line$40,000	____	____	____	____
Table Summary: In the table, a spanner heading appears over the column headings for columns 2 and 3 and for columns 4 and 5. In row 1, data are found in columns 2 and 4. All other cells in columns 2 through 5 contain blank lines.

Required

1. Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The first cost is completed as an example.)

Check (1) Total variable production cost, $125,000

2. Compute the manufacturing cost per drum set.

Analysis Component

3. Assume that 1,200 drum sets are produced in the next year. What do you predict will be the total cost of plastic for the casings and the per unit cost of the plastic for the casings?
4. Assume that 1,200 drum sets are produced in the next year. What do you predict will be the total cost of property taxes and the per unit cost of the property taxes?

Problem 14-2A Classifying costs C2 C3

The following calendar year-end information is taken from the December 31, 2019, adjusted trial balance and other records of Leone Company.

Advertising expense	$ 28,750	Miscellaneous production costs	$ 8,425
Depreciation expenseOffice equipment	7,250	Office salaries expense	63,000
Depreciation expenseSelling equipment	8,600	Raw materials purchases (direct materials)	925,000
Depreciation expenseFactory equipment	33,550	Rent expenseOffice space	22,000
Factory supervision	102,600	Rent expenseSelling space	26,100
Factory supplies used (indirect materials)	7,350	Rent expenseFactory building	76,800
Factory	33,000	Maintenance expenseFactory equipment	35,400
Direct labor	675,480	Sales	4,462,500
Indirect labor	56,875	Sales salaries expense	392,560

Required

1. Classify each cost as either a product or period cost.
2. Classify each product cost as either direct materials, direct labor, or factory overhead.
3. Classify each period cost as either selling expenses or general and administrative expenses.

Problem 14-3A Schedule of cost of goods manufactured and income statement; inventory analysis A1 P2

Using the data from Problem 14-2A and the following additional inventory information for Leone Company, complete the requirements below. Assume income tax expense is $233,725 for the year.

Inventories
Raw materials, December 31, 2018	$166,850
Raw materials, December 31, 2019	182,000
Work in process, December 31, 2018	15,700
Work in process, December 31, 2019	19,380
Finished goods, December 31, 2018	167,350
Finished goods, December 31, 2019	136,490

Required

1. Prepare the companys 2019 schedule of cost of goods manufactured.

Check (1) Cost of goods manufactured, $1,935,650

2. Prepare the companys 2019 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses.

Analysis Component

3. Compute the (a) inventory turnover, defined as cost of goods sold divided by average inventory, and (b) days sales in inventory, defined as 365 times ending inventory divided by cost of goods sold, for both its raw materials inventory and its finished goods inventory. (To compute turnover and days sales in inventory for raw materials, use raw materials used rather than cost of goods sold.) Round answers to one decimal place.