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The document provides instructions for completing accounting worksheets and financial statements for a manufacturing company. It includes directions to prepare a cost of goods manufactured schedule, income statement, and answers regarding accounting ethics. The schedules and statements require assigning various costs to the proper accounts and periods based on accounting principles and including appropriate notes. Completing the financial reporting accurately and ethically is important for management decision making.

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Jan Roger Yunsal
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43 views

Janjann

The document provides instructions for completing accounting worksheets and financial statements for a manufacturing company. It includes directions to prepare a cost of goods manufactured schedule, income statement, and answers regarding accounting ethics. The schedules and statements require assigning various costs to the proper accounts and periods based on accounting principles and including appropriate notes. Completing the financial reporting accurately and ethically is important for management decision making.

Uploaded by

Jan Roger Yunsal
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
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a. Prepare an answer sheet with the following column headings.

Enter each cost item on your answer sheet, placing an "X" mark under the appropriate headings
Product Costs
Manufacturing
Cost Item Direct Materials Direct Labor Period Cost
Overhead

Rent on Manufacturing equipment


1 X
(Lease Cost) $2000/month

Insurance on Manufacturing Building


2 X
$750/month
Raw Materials (Frames, tires, etc.)
3 X
$80/bicycle
Utility Cost for manufacturing Facility
4 X
$1000/month
Supplies for administrative office
5 X
$800/month

Wages for assembly line workers in


6 X
manufacturing facility $30/bicycle

Depreciation on office equipment


7 X
$650/month

Miscellaneous materials (lubricants,


8 X
solders, etc.) $1.20/bicycle

Property Taxes on manufacturing


9 X
building $2,400/year

Manufacturing supervisor's salary


10 X
P3000/month

11 Advertising for bicycles $30,000/year X

12 Sales Commission $10/bicycle X

Depreciation on manufacturing building


13 X
$1,500/month
b. Compute the Total Manufacturing Costs for the month in good form.

Cost Items Manufacturing Note:


Cost

Rent on Manufacturing Equipment


$ 2,000.00 Item# 1: Lease Cost $2,000/month

Insurance on Manufacturing Building


$ 750.00 Item# 2: $750/month
Raw Materials $ 80,000.00 Item# 3: $80/bicycle (80x1000 bicycle)

Utility Cost For Manufacturing Facility


$ 1,000.00 Item# 4: $1000/month
Labor $ 30,000.00 Item# 6: $30/bicycle (30x1000 bicycle)
Miscllaneous Materials $ 1,200.00 Item# 8: $1.20/bicyle (1.20x1000 bicycle)
Property Taxes $ 200.00 Item# 9: $2,400/year (2,400/12months)

Manufacturing Supervisor Salary


$ 3,000.00 Item# 10: $3000/month
Depreciation on Manufacturing
Building $ 1,500.00 Item# 13: 1500/month
Total Manufacturing Cost $ 119,650.00
a. Prepare a cost of goods manufactured schedule for August 2022

Foyle Inc.
Cost of Goods Manufactured Schedule
For the Month Ended August 31, 2022

Work in Process, August 1 $ 25,000.00


Direct Materials
Raw Materials Invty., August 1 $ 19,500.00
Raw Materials Purchases 200,000.00
Total Raw Materials Available For Use 219,500.00
Less: Raw Materials Invty., August 31 30,000.00
Direct Materials Used $ 189,500.00
Direct Labor 160,000.00
Manufacturing Overhead
Indirect Labor 20,000.00
Rent on Factory Facilities 60,000.00
Depreciation on Factory Equipment 35,000.00
Utilities Expense 6,000.00
Insurance Expense 3,500.00
Total Manufacturing Overhead 124,500.00
Total Manufacturing Cost 474,000.00
Total Cost of Work in Process 499,000.00
Less: Work in Process, August 31 21,000.00
Cost of Goods Manufactured $ 478,000.00

Note: The Utilities Expense Amounting 10,000 but only 60% apply for the Factory operations
(10,000 x 60% = 6,000.00)

As for Insurance expense amountinf 5,000, but only 70% apply for the factory operation
(5,000 x 70% = 3,500.00)
b. Prepare a correct Income Statement for August 2022

Foyle Inc.
Income Statement
For the Month Ended August 31, 2022

Sales (Net) $ 675,000.00


Costs of Goods Sold
Finished Goods inventory, August 1 $ 40,000.00
Cost of Goods Manufactured 478,000.00
Cost of Goods Availbale for use 518,000.00
Less: Finished Goods Inventory August 31 64,000.00
Costs of Goods Sold 454,000.00
Gross Profit 221,000.00
Less: Operating Expense
Advertising Expense 75,000.00
Selling And Administrative Salaries 70,000.00
Depreciation on sales Equipment 50,000.00
Utilities Expense 4,000.00
Insurance 1,500.00
Total Operating Expense 200,500.00
Net Income $ 20,500.00

Note: Utilities Expense Amounting 10,000x60% = 6,000.00


So, 10,000 - 6,000 = 4,000.00
(The Remaining 4,000.00 are charged to selling and Administrative Activities)

Insurance Expense Amounting 5000x70% = 3,500.00


So, 5,000 - 3,500 = 1,500.00
(The Remaining 1,500.00 are charged to selling and Administrative Activities)
C. Is it ethical for an inexperienced assistant accountant to prepare a financial Statement without proper training and
supervision?

No, The main goal of accountant is to help companies to maintain professional competence and reputation. Accountant ethically
obligated to report financial information accurately in order to ease their financial decision making process. So if you give this kind
work in an inexperienced accountant it would be disaster for the company. Some of the information it would possible inaccurate an
causes deemed or erroneous in the report.

D. It is ethical fo Joyce Rotzen to resign without ensuring that her replacement is adequately trained and prepared to take o
her responsibilities?

No, if you've made the decision to quit your current job it is important to ensure a smooth transiiton for the team that you are leavin
behind. In labor code, you must render a 30 days before prior the date of resignation letter. The reason is you must train the person
replace in your position.

E. Is it Ethical to make adjustments to the income statement based on estimates and assumptions?

Yes, if you have estimates and assumption whenever the accountant is required to make reference in a report, so that it is easy for t
manager or owner of the organizations to project a future engagement of the company. Sometimes making an income statement bas
on estimates or assumptions it came from the past or history of the organizations.
Carlos Hilado Memorial State University

Master in Business Administration


MBA 1B - 506 - Advance Managerial Accounting

Submitted by
JAN ROGER P. YUNSAL

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