ADMS 2510 Managerial Accounting Week 1 in class problems 2-9, 2-17 - Questions and Solutions
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Course
ADMS 2510 Managerial Accounting
Institution
York University (Ebor
)
Exercise 2-9:
Gelinas Computer Co was organized on May1. On that date the company
purchased 22,000 USB flash drives to be sold with personal computers,
each preloaded with the company’s product information brochures. The
front of the USB flash drives displays the company’s name and an
attr...
Gelinas Computer Co was organized on May1. On that date the company
purchased 22,000 USB flash drives to be sold with personal computers,
each preloaded with the company’s product information brochures. The
front of the USB flash drives displays the company’s name and an
attractive logo. Each USB flash drive cost Gelinas $6.
During May, 19,500 USB flash drives were drawn from the raw materials
inventory account. Of these, 500 were taken by the sales manager to an
important sales meeting with prospective customers and handed out as
advertising. The remaining USB flash drives drawn from inventory were
sold by bundling them with units of the company’s product that were
being manufactured during May. Of the units of product that were
bundled with the USB flash drives during May, 95% were completed and
transferred from work-in-process to finished goods. Of the units
completed during the month, 80% were sold and shipped to customers.
,Required:
Determine the cost of flash drives that would be
in each of the following accounts at May 31st:
a. Raw materials;
b. Work-in-process;
c. Finished goods;
d. Cost of goods sold;
e. Advertising expense.
, 1. a.
USB flash drives purchased
22,000
USB flash drives drawn from inventory
19,500
USB flash drives remaining in inventory
2,500
Cost per USB flash drive
× $6
Cost in Raw Materials Inventory at May 31
$15,000
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