Problems

Problem 1

Required: Use the following information to complete the below schedule of cost of goods manufactured.

(25 points)

Purchases of raw materials \$120,000.00
Raw materials available for use \$148,000.00
Cost of direct raw materials used \$124,000.00
Total manufacturing costs \$310,000.00
Ending work-in-process inventory (\$46,000.00)
Cost of goods manufactured \$306,000.00

Schedule of Cost of Goods Manufactured

Beginning inventory, raw materials \$28,000.00
Plus: Purchases of raw materials \$120,000.00
Raw materials available for use \$148,000.00
Less: Ending raw materials inventory (\$24,000.00)
Cost of direct raw materials used \$124,000.00
Direct labor \$162,000.00
Total manufacturing costs \$310,000.00
Plus: Beginning work-in-process inventory \$42,000.00
Total work in process \$352,000.00
Less: Ending work-in-process inventory (\$46,000.00)
Cost of goods manufactured \$306,000.00

Problem 2

Required: JZ is a musician who is considering whether to independently produce and sell a CD. JZ estimates fixed costs of \$10,000 and variable costs of \$4.00 per unit. The expected selling price is \$12 per CD. What is JZ's break-even point in units and dollars?

(25 points)
Break-even point in units Fixed Costs 10000/(12-4) 1250
Contribution margin per unit

Break-even point in dollars Break-even point in units * selling price 1250 * 12 \$15,000.00