16.1
During the year, Coronado Boat Yard has incurred manufacturing costs of $420,000 in building
three large sailboats. At year-end, each boat is about 70 percent complete. How much of these
manufacturing costs should be recognized as expense in Coronado Boat Yard’s income statement
for the current year? Explain.
16.2
During the current year, the cost of direct materials purchased by a manufacturing firm was
$325,000, and the direct materials inventory increased by $65,000. What was the cost of direct
materials used during the year?
16.3
A company that assembles trucks produces 60 trucks during the current year and incurs
$3 million of material, labor, and overhead costs. Fifty-three trucks were sold during the year and
each is allocated the same amount of costs. How much of the $3 million assembly costs should
appear on the company’s income statement for the current year?
16.6
During the current year, CF Manufacturing Co. incurred $370,000 of indirect labor costs, $15,000
of indirect materials costs, $125,000 of rent costs, and $163,000 of other overhead costs. How
much did CF Manufacturing assign to the Work in Process Inventory account from the Manufacturing
Overhead account?
16.9
Star Repairs Co. does all the repair work for a medium-sized manufacturer of handheld computer
games. The games are sent directly to Star, and after the games are repaired, Star bills the game
manufacturer for cost plus a 20 percent markup. In the month of February, purchases of parts
(replacement parts) by Star amounted to $97,000, the beginning inventory of parts was $38,500,
and the ending inventory of parts was $15,250. Payments to repair technicians during the month of
February totaled $52,500. Overhead incurred was $121,000.
a. What was the cost of materials used for repair work during the month of February?
b. What was the prime cost for February?
c. What was the conversion cost for February?
d. What was the total repair cost for February?
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