Managerial Accounting
Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 2, Problem 14E

The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes:

  • Purchased $480,000 of materials.
  • Used $434,500 of direct materials in production.
  • Incurred $125,000 of direct labor wages.
  • Applied factory overhead at a rate of 40% of direct labor cost.
  • Transferred $578,000 of work in process to finished goods.
  • Sold goods with a cost of $550,000.
  • Revenues earned by selling bikes, $910,000.
  • Incurred $185,000 of selling expenses.
  • Incurred $90,000 of administrative expenses.
  1. a. Prepare the income statement for Rushmore Biking for the month ending February 28.
  2. b. Determine the inventory balances on February 28, the end of the first month of operations.
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The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes: Purchased $430,000 of materials. Used $389,200 of direct materials in production. Incurred $112,000 of direct labor wages. Applied factory overhead at a rate of 35% of direct labor cost. Transferred $512,500 of work in process to finished goods. Sold goods with a cost of $487,700. Revenues earned by selling bikes, $806,900. Incurred $164,100 of selling expenses. Incurred $79,800 of administrative expenses.   Prepare the income statement for Rushmore Biking for the month ending February 28. Round your answers to the nearest dollar.   Determine the inventory balances on February 28, the end of the first month of operations. Round your answers to the nearest dollar.   Materials inventory, February 28 $fill in the blank 15 Work in process inventory, February 28 $fill in the blank 16 Finished goods inventory, February 28
The following events took place for Rushmore Biking Inc. duringFebruary, the first month of operations as a producer of road bikes:. Purchased $480,000 of materials. . Used $434,500 of direct materials in production.. Incurred $125,000 of direct labor wages.. Applied factory overhead at a rate of 40% of direct labor cost.. Transferred $578,000 of work in process to finished goods. . Sold goods with a cost of $550,000.. Revenues earned by selling bikes, $910,000.. Incurred $185,000 of selling expenses.. Incurred $90,000 of administrative expenses. a. Prepare the income statement for Rushmore Biking for themonth ending February 28.b. Determine the inventory balances on February 28, the end of thefirst month of operations.
The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes:•Purchased $483,100 of materials.•Used $415,500 of direct materials in production.•Incurred $356,000 of direct labor wages.•Applied factory overhead at a rate of 70% of direct labor cost.•Transferred $979,900 of work in process to finished goods.•Sold goods with a cost of $966,200.•Revenues earned by selling bikes, $1,729,500.•Incurred $415,500 of selling expenses.•Incurred $154,600 of administrative expenses.a. Prepare the income statement for Rushmore Biking Inc. for the month ending February 28. Assume that Rushmore Biking Inc. uses the perpetual inventory method.

Chapter 2 Solutions

Managerial Accounting

Ch. 2 - Issuance of materials On May 7, Bergan Company...Ch. 2 - Direct labor costs During May, Bergan Company...Ch. 2 - Factory overhead costs During May, Bergan Company...Ch. 2 - Applying factory overhead Bergan Company estimates...Ch. 2 - Job costs At the end of May, Bergan Company had...Ch. 2 - Cost of goods sold Pine Creek Company completed...Ch. 2 - Transactions in a job order cost system Five...Ch. 2 - The following information is available for the...Ch. 2 - Cost of materials issuances under the FIFO method...Ch. 2 - Materials issued are as follows: Journalize the...Ch. 2 - Kingsford Furnishings Company manufactures...Ch. 2 - A summary of the time tickets is as follows:...Ch. 2 - Entry for factory labor costs The weekly time...Ch. 2 - Schumacher Industries Inc. manufactures...Ch. 2 - Eclipse Solar Company operates two factories. The...Ch. 2 - Exotic Engine Shop uses a job order cost system to...Ch. 2 - Predetermined factory overhead rate Poehling...Ch. 2 - The following account appears in the ledger prior...Ch. 2 - Collegiate Publishing Inc. began printing...Ch. 2 - The following events took place for Rushmore...Ch. 2 - Job order cost accounting for a service company...Ch. 2 - Job order cost accounting for a service company...Ch. 2 - Barnes Company uses a job order cost system. The...Ch. 2 - Entries and schedules for unfinished jobs and...Ch. 2 - Job cost sheet Remnant Carpet Company sells and...Ch. 2 - Analyzing manufacturing cost accounts Fire Rock...Ch. 2 - Prob. 5PACh. 2 - Entries for costs in a job order cost system Royal...Ch. 2 - Entries and schedules for unfinished jobs and...Ch. 2 - Job cost sheet Stretch and Trim Carpet Company...Ch. 2 - Analyzing manufacturing cost accounts Clapton...Ch. 2 - Flow of costs and income statement Technology...Ch. 2 - Antolini Enterprises produces mens sports coats...Ch. 2 - Alvarez Manufacturing Inc. is a job shop. The...Ch. 2 - Prob. 3MADCh. 2 - Prob. 4MADCh. 2 - Ethics in Action TAC Industries Inc. sells heavy...Ch. 2 - Prob. 2TIFCh. 2 - Communication Carol Creedence, the plant manager...Ch. 2 - RIRA Company makes attachments such as backhoes...Ch. 2 - Todd Lay just began working as a cost accountant...Ch. 2 - Baldwin Printing Company uses a job order cost...Ch. 2 - John Sheng, a cost accountant at Starlet Company,...Ch. 2 - Lucy Sportswear manufactures a specialty line of...Ch. 2 - Patterson Corporation expects to incur 70,000 of...
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