Quick Study 1-1 5 minutes

Wild and Shaw, Managerial Accounting 8e Solutions Manual: Chapter 1

1 Copyright © 2022 by McGraw Hill.All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.Chapter 1

Managerial Accounting Concepts and Principles

QUICK STUDIES

Quick Study 1-1 (5 minutes)

• Its primary users are company managers ................................ Managerial
• Its information is often available only after an audit is complete ... Financial
• Its primary focus is on the organization as a whole ............... Financial
• Its principles and practices are relatively flexible ................... Managerial
• It focuses mainly on past results .............................................. Financial

Quick Study 1-2 (10 minutes)

• Indirect cost
• Direct cost
• Indirect cost
• Indirect cost
• Direct cost

Quick Study 1-3 (10 minutes)

• Direct materials
• Factory overhead
• Direct labor
• Factory overhead
• Factory overhead
• Direct materials

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Wild and Shaw, Managerial Accounting 8e Solutions Manual: Chapter 1

2 Copyright © 2022 by McGraw Hill.All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.Quick Study 1-4 (10 minutes)

• Product cost
• Period cost
• Product cost
• Period cost
• Product cost
• Period cost
• Period cost
• Product cost

Quick Study 1-5 (10 minutes)

• Prime cost
• Conversion cost (Glue is an indirect material)
• Both
• Conversion cost
• Conversion cost
• Prime cost

Quick Study 1-6 (10 minutes)

Ending work in process inventory is computed as:

Work in process inventory, beginning .............. $ 26,000 Direct materials used ..................................... 74,000 Direct labor used............................................. 55,000 Factory overhead ............................................ 95,000 Total manufacturing costs ............................. 224,000 Total cost of work in process .............................Less cost of goods manufactured .....................

250,000

220,000

Work in process inventory, ending ................... $ 30,000

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Wild and Shaw, Managerial Accounting 8e Solutions Manual: Chapter 1

3 Copyright © 2022 by McGraw Hill.All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.Quick Study 1-6 (continued)

Alternative calculation using T-account:

Work in Process Inventory Beginning 26,000 Direct materials 74,000 Direct labor Factory overhead

55,000

95,000

220,000 COGM

Ending 30,000

Quick Study 1-7 (10 minutes)

Cost of goods sold is computed as:

Finished goods inventory, beginning ............... $ 500 Cost of goods manufactured ............................. 4,000 Goods available for sale ..................................... 4,500 Less finished goods inventory, ending............. 700 Cost of goods sold .............................................. $3,800

Quick Study 1-8 (10 minutes)

Finished goods inventory, beginning .............. $ 345,000 Cost of goods manufactured ............................ 918,000 Goods available for sale .................................... 1,263,000 Less finished goods inventory, ending............ 283,000 Cost of goods sold ............................................. $ 980,000

Alternative calculation using T-account:

Finished Goods Inventory Beginning 345,000

COGM 918,000

980,000 COGS

Ending 283,000

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Wild and Shaw, Managerial Accounting 8e Solutions Manual: Chapter 1

4 Copyright © 2022 by McGraw Hill.All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.Quick Study 1-9 (5 minutes)

Cost of goods sold is computed as:

Merchandise inventory, beginning .................... $12,000 Cost of merchandise purchased ........................ 85,000 Goods available for sale ..................................... 97,000 Less merchandise inventory, ending ................ 18,000 Cost of goods sold .............................................. $79,000

Quick Study 1-10 (10 minutes)

(1) (2) (3)

Cost of merchandise purchased ........ $181,000 $140,000 $289,000 Merchandise inventory, beginning ....

106,000 21,000 28,000

Merchandise inventory, ending ..........

82,000 33,000 50,000

Cost of goods sold ..............................

205,000 128,000 267,000

Calculations:

(1) $106,000 + Purchases - $205,000 = $82,000 ➔Purchases = $181,000

(2) Beg. Inv. + $140,000 - $128,000 = $33,000 ➔Beg. Inv. = $21,000

(3) $28,000 + $289,000 - $267,000 = End. Inv. ➔End. Inv. = $50,000

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