Refer to the schedule of cost of goods manufactured prepared in problem 2.39.
Problem 2.39 data
1. How much of the manufacturing costs incurred during the current year remain in work in process inventory on 31 December?
2. Suppose Maximus manufacturing had increased its production in the current year by 20 per cent. What effect would this change have on the direct material cost shown in the schedule of cost of goods manufactured? Why?
3. Answer the same question as in requirement 2 for depreciation on the factory building.
4. Suppose that only half of the $72,000 in depreciation on equipment was related to factory machinery, and the other half was related to selling and administrative equipment. How would this have changed the schedule of cost of goods manufactured?