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Reser Company Cost Analysis 2008

The document contains two problems related to manufacturing costs. Problem 1 provides raw materials and manufacturing overhead costs for Reser Company for the year ended December 31, 2008. It shows raw materials purchased and used, manufacturing overhead costs, and schedules the cost of goods manufactured. Problem 2 contains calculations related to conversion, prime, variable, and total costs.

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Kenneth Jim Hipolito
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150 views3 pages

Reser Company Cost Analysis 2008

The document contains two problems related to manufacturing costs. Problem 1 provides raw materials and manufacturing overhead costs for Reser Company for the year ended December 31, 2008. It shows raw materials purchased and used, manufacturing overhead costs, and schedules the cost of goods manufactured. Problem 2 contains calculations related to conversion, prime, variable, and total costs.

Uploaded by

Kenneth Jim Hipolito
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Problem 1

1.) Raw materials inventory, Beginning 8,000 3.)


Raw materials purchases 93,000
Raw materials available for use 101,000 Work in processing, beginning
Less: Raw materials inventory, Ending 7,000 Direct materials:
Direct materials used 94,000

2.) Manufacturing overhead:


Factory rent 8,000
Factory utilities 7,000 Direct materials used
Indirect materials 4,000 Direct labor
Indirect labor 6,000 Manufacturing overhead
Total manufacturing overhead 25,000 Total manufacturing costs
Total cost of work in process
Less: Work in process, ending
Cost of goods manufactured

Problem 2
Solutions
1.) Conversion Cost 10 + 8 + 5 = 23

2.) Prime Cost 15 + 10 = 25

3.) Variable Cost 15 + 10 + 8 + 4 = 37

4.) Total Cost


Production Cost (15 + 10 + 8 + 5 + 3) (10,000) = 410,000
Sales Cost 4 x 12,000 = 48,000
458,000

1.) Conversion Cost x = Conversion cost per unit


x = 200 + 2/3x
1/3x = 200
x = 600

2.) Factory Overhead 2/3 x 600 = 400

3.) Direct Materials 650 - 200 - 400 = 50


Reser Company
Schedule of Cost of Goods Manufactured
For the Year Ended December 31, 2008 4.)

Work in processing, beginning 15,000


Direct materials:
Raw materials inventory, beginning 8,000
Raw materials purchases 93,000
Raw materials available for use 101,000
Less: Raw materials inventory, ending 7,000
Direct materials used 94,000
Direct labor 42,000
Manufacturing overhead 25,000
Total manufacturing costs 161,000
Total cost of work in process 176,000
Less: Work in process, ending 13,000
Cost of goods manufactured 163,000
Reser Company
Income Statement
For the Year Ended December 31, 2008

Finished goods inventory, January 1 16,000


Cost of goods manufactured 163,000
Cost of goods available for sale 179,000
Finished goods inventory, December 31 10,000
Cost of goods sold 169,000

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