Ch. 1-5
arpenter Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,500 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 6,100 60% Conversion costs $ 9,400 55% A total of 9,150 units were started and 8,000 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Materials costs $ 95,900 Conversion costs $ 170,100 The ending inventory was 85% complete with respect to materials and 70% complete with respect to conversion costs. Units in ending work in process = Units in beginning work in process + Units started into production − Units transferred to the next department = 1,500 + 9,150 − 8,000 = 2,650
How many units are in ending work in process inventory in the first processing department at the end of the month?
Predetermined overhead rate = Estimated manufacturing overhead ÷ Estimated machine-hours
In a job-order costing system that is based on machine-hours, which of the following formulas is correct?
Sales $ 434,000 Cost of goods sold (all variable) $ 175,200 Total variable selling expense $ 23,700 Total fixed selling expense $ 15,500 Total variable administrative expense $ 16,000 Total fixed administrative expense $ 32,400 Sales $ 434,000 Cost of goods sold 175,200 Gross margin $ 258,800
The gross margin for October is:
Koelsch Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Customizing Total Estimated total machine-hours (MHs) 1,000 9,000 10,000 Estimated total fixed manufacturing overhead cost $ 4,000 $ 25,200 $ 29,200 Estimated variable manufacturing overhead cost per MH $ 2.00 $ 3.00 During the most recent month, the company started and completed two jobs--Job F and Job K. There were no beginning inventories. Data concerning those two jobs follow: Job F Job K Direct materials $ 12,300 $ 8,400 Direct labor cost $ 18,200 $ 6,800 Molding machine-hours 700 300 Customizing machine-hours 3,600 5,400 11 The first step is to calculate the estimated total overhead costs in the two departments. Molding Estimated fixed manufacturing overhead $ 4,000 Estimated variable manufacturing overhead ($2.00 per MH × 1,000 MHs) 2,000 Estimated total manufacturing overhead cost $ 6,000 Customizing Estimated fixed manufacturing overhead $ 25,200 Estimated variable manufacturing overhead ($3.00 per MH × 9,000 MHs) 27,000 Estimated total manufacturing overhead cost $ 52,200 The second step is to combine the estimated manufacturing overhead costs in the two departments ($6,000 + $52,200 = $58,200) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 58,200 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.82 per MH The overhead applied to Job K is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $5.82 per MH x (300 MHs + 5,400 MHs) = $5.82 per MH x (5,700 MHs) = $33,174 Job K's manufacturing cost: Direct materials $ 8,400 Direct labor cost 6,800 Manufacturing overhead applied 33,174 Total manufacturing cost $ 48,374 The selling price for Job K: Total manufacturing cost $ 48,374 Markup (50%) 24,187 Selling price $ 72,561
Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job K is closest to:
Marioni Corporation has two manufacturing departments--Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 7,000 3,000 10,000 Estimated total fixed manufacturing overhead cost $ 37,100 $ 9,000 $ 46,100 Estimated variable manufacturing overhead cost per MH $ 1.70 $ 2.60 During the most recent month, the company started and completed two jobs--Job B and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job B Job H Forming machine-hours 4,800 2,200 Assembly machine-hours 1,200 1,800 11 Forming Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 37,100 Estimated variable manufacturing overhead ($1.70 per MH × 7,000 MHs) 11,900 Estimated total manufacturing overhead cost (a) $ 49,000 Estimated total machine-hours (b) 7,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 7.00 per MH Assembly Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 9,000 Estimated variable manufacturing overhead ($2.20 per MH × 8,000 MHs) 7,800 Estimated total manufacturing overhead cost (a) $ 16,800 Estimated total machine-hours (b) 3,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.60 per MH Manufacturing overhead applied to Job B: Forming ($7.00 per MH × 4,800 MHs) $ 33,600 Assembly ($5.60 per MH × 1,200 MHs) 6,720 Total manufacturing overhead applied $ 40,320
Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job B is closest to:
Variable cost per machine-hour = $734,440 ÷ 8,600 machine-hours = $85.40 per machine-hour Fixed cost per machine-hour at 8,800 machine-hours = $154,000 ÷ 8,800 machine-hours = $17.50 per machine-hour Total cost = Variable cost + Fixed cost = $85.40 per machine-hour + $17.50 per machine-hour = $102.90 per machine-hour
At an activity level of 8,600 machine-hours in a month, Falks Corporation's total variable production engineering cost is $734,440 and its total fixed production engineering cost is $154,000. What would be the total production engineering cost per machine-hour, both fixed and variable, at an activity level of 8,800 machine-hours in a month? Assume that this level of activity is within the relevant range.
Direct materials $ 41,500 Direct labor $ 32,200 Manufacturing overhead $ 29,700 Selling expenses $ 23,500 Administrative expenses $ 41,000 Conversion cost = Direct labor + Manufacturing overhead = $32,200 + $29,700 = $61,900
Conversion costs during the month totaled:
Direct materials $ 4.50 Direct labor $ 3.20 Variable manufacturing overhead $ 1.20 Fixed manufacturing overhead $ 9,900 Sales commissions $ 1.20 Variable administrative expense $ 0.30 Fixed selling and administrative expense $ 3, Sales commissions $ 1.20 Variable administrative expense 0.30 Variable selling and administrative expense per unit $ 1.50 Total variable selling and administrative expense ($1.50 per unit x 4,500 units sold) $ 6,750 Total fixed selling and administrative expense 3,300 Total period (nonmanufacturing) cost $ 10,050
For financial reporting purposes, the total amount of period costs incurred to sell 4,500 units is closest to:
Direct materials $ 5.30 Direct labor 4.40 Variable manufacturing overhead 2.00 Variable manufacturing cost per unit $ 11.70 Total variable manufacturing cost ($11.70 per unit x 5,000 units produced) $ 58,500 Total fixed manufacturing overhead cost 22,000 Total product (manufacturing) cost $ 80,500
For financial reporting purposes, what is the total amount of product costs incurred to make 5,000 units?
Vallin Manufacturing Corporation's beginning work in process inventory consisted of 8,800 units, 100% complete with respect to materials cost and 60% complete with respect to conversion costs. The total cost in the beginning inventory was $44,000. During the month, 48,000 units were transferred out. The equivalent unit cost was computed to be $3.30 for materials and $3.80 for conversion costs under the weighted-average method. 11 Weighted-average method Materials Conversion Total Units completed and transferred out: Units transferred to the next department (a) 48,000 48,000 Cost per equivalent unit (b) $ 3.30 $ 3.80 Cost of units completed and transferred out (a) × (b) $ 158,400 $ 182,400 $ 340,800
Given this information, the total cost of the units completed and transferred out was:
Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,000 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 6,100 50% Conversion costs $ 2,300 20% A total of 7,400 units were started and 6,700 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Cost Materials costs $ 159,300 Conversion costs $ 121,000 The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs. 11 Units in ending work in process = Units in beginning work in process + Units started into production - Units transferred to the next department = 1,000 + 7,400 - 6,700 = 1,700
How many units are in ending work in process inventory in the first processing department at the end of the month?
Raider Corporation uses the weighted-average method in its process costing system. The Molding Department is the second department in its production process. The data below summarize the department's operations in January. Units Percent Complete with Respect to Conversion Beginning work in process inventory 8,400 10 % Transferred in from the prior department during January 71,000 Completed and transferred to the next department during January 70,800 Ending work in process inventory 8,600 80 % The Molding Department's cost per equivalent unit for conversion cost for January was $3.26. 11 Weighted-average method Conversion Ending work in process: Conversion: 8,600 units × 80% 6,880 Equivalent units of production in ending work in process inventory 6,880 Conversion Ending work in process inventory: Equivalent units of production (a) 6,880 Cost per equivalent unit (b) $ 3.26 Cost of ending work in process inventory (a) × (b) $ 22,428.80
How much conversion cost was assigned to the ending work in process inventory in the Molding Department for January?
Direct materials $ 6.65 Direct labor $ 3.70 Variable manufacturing overhead $ 1.40 Fixed manufacturing overhead $ 3.50 Fixed selling expense $ 1.00 Fixed administrative expense $ 0.70 Sales commissions $ 0.80 Variable administrative expense $ 0.70 Direct materials $ 6.65 Direct labor 3.70 Direct manufacturing cost per unit (a) $ 10.35 Number of units produced (b) 5,400 Total direct manufacturing cost (a) × (b) $ 55,890
If 5,400 units are produced, the total amount of direct manufacturing cost incurred is closest to:
Direct materials $ 7.30 Direct labor $ 4.20 Variable manufacturing overhead $ 1.55 Fixed manufacturing overhead $ 23,400 Sales commissions $ 0.75 Variable administrative expense $ 0.85 Fixed selling and administrative expense $ 4,900 Total variable manufacturing overhead cost ($1.55 per unit x 6,000 units) $ 9,300 Total fixed manufacturing overhead cost 23,400 Total manufacturing overhead cost (a) $ 32,700
If 6,000 units are produced, the total amount of manufacturing overhead cost is closest to:
Direct materials $ 5.30 Direct labor $ 4.40 Variable manufacturing overhead $ 2.00 Fixed manufacturing overhead $ 22,000 Sales commissions $ 0.50 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 6,000 Direct materials $ 5.30 Direct labor 4.40 Direct manufacturing cost per unit (a) $ 9.70 Number of units produced (b) 6,000 Total direct manufacturing cost (a) × (b) $ 58,200
If 6,000 units are produced, what is the total amount of direct manufacturing cost incurred?
Direct materials $ 7.85 Direct labor $ 3.40 Variable manufacturing overhead $ 1.90 Fixed manufacturing overhead $ 3.20 Fixed selling expense $ 1.20 Fixed administrative expense $ 0.90 Sales commissions $ 1.00 Variable administrative expense $ 0.90 Fixed manufacturing overhead per unit $ 3.20 Number of units produced* 6,000 Total fixed manufacturing overhead cost $ 19,200
If 7,000 units are produced, the total amount of fixed manufacturing cost incurred is closest to:
Direct materials $ 7.85 Direct labor $ 3.40 Variable manufacturing overhead $ 1.90 Fixed manufacturing overhead $ 3.20 Fixed selling expense $ 1.20 Fixed administrative expense $ 0.90 Sales commissions $ 1.00 Variable administrative expense $ 0.90 Fixed manufacturing overhead per unit $ 3.20 Number of units produced* 6,000 Total fixed manufacturing overhead cost $ 19,200
If 7,000 units are produced, the total amount of fixed manufacturing cost incurred is closest to:
Direct materials $ 6.55 Direct labor $ 3.80 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 25,500 Sales commissions $ 1.80 Variable administrative expense $ 0.50 Fixed selling and administrative expense $ 6,800 Total variable manufacturing overhead cost ($1.50 per unit x 9,500 units) Total fixed manufacturing overhead cost 25,500 Total indirect manufacturing cost $ 39,750 Variable Manufacturing $1.50 + Fixed Manufacturing ($25,500)
If 9,500 units are produced, the total amount of indirect manufacturing cost incurred is closest to:
Columbo Corporation has two production departments, Forming and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Finishing Machine-hours 17,000 10,000 Direct labor-hours 1,000 9,000 Total fixed manufacturing overhead cost $ 110,500 $ 78,300 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 3.30 During the current month the company started and finished Job A948. The following data were recorded for this job: Job A948: Forming Finishing Machine-hours 70 30 Direct labor-hours 10 50 Direct materials $ 650 $ 330 Direct labor cost $ 380 $ 1,900 11 Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $110,500 + ($1.60 per machine-hour × 17,000 machine-hours) = $110,500 + $27,200 = $137,700 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $137,700 ÷ 17,000 machine-hours = $8.10 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.10 per machine-hour × 70 machine-hours = $567 Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $78,300 + ($3.30 per direct labor-hour × 9,000 direct labor-hours) = $78,300 + $29,700 = $108,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $108,000 ÷ 9,000 direct labor-hours = $12.00 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.00 per direct labor-hour × 50 direct labor-hours = $600 Forming Finishing Total Direct materials $ 650 $ 330 $ 980 Direct labor $ 380 $ 1,900 2,280 Manufacturing overhead applied $ 567 $ 600 1,167 Total cost of Job A948 $ 4,427 Total cost of Job A948 $ 4,427.00 Markup ($4,427.00 × 40%) 1,770.80 Selling price $ 6,197.80
If the company marks up its manufacturing costs by 40% then the selling price for Job A948 would be closest to:
Coates Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $249,000, variable manufacturing overhead of $3.80 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job X784 which was recently completed: Number of units in the job 50 Total machine-hours 250 Direct materials $ 470 Direct labor cost $ 5,500 11 Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $249,000 + ($3.80 per machine-hour × 30,000 machine-hours) = $249,000 + $114,000 = $363,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $363,000 ÷ 30,000 machine-hours = $12.10 per machine-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $12.10 per machine-hour × 250 machine-hours = $3,025 Direct materials $ 470 Direct labor 5,500 Manufacturing overhead applied 3,025 Total cost of Job X784 $ 8,995
If the company marks up its unit product costs by 30% then the selling price for a unit in Job X784 is closest to:
The Richmond Corporation uses the weighted-average method in its process costing system. The company has only a single processing department. The company's ending work in process inventory on August 31 consisted of 21,600 units. The units in the ending work in process inventory were 100% complete with respect to materials and 60% complete with respect to labor and overhead. 11 eighted-average method Materials Labor and Overhead Ending work in process: Materials: 21,600 units × 100% 21,600 Conversion: 21,600 units × 60% 12,960 Equivalent units of production in ending work in process 21,600 12,960 Materials Labor and Overhead Total Ending work in process inventory: Equivalent units of production (a) 21,600 12,960 Cost per equivalent unit (b) $ 3.65 $ 5.15 Cost of ending work in process inventory (a) × (b) $ 78,840 $ 66,744 $ 145,584
If the cost per equivalent unit for August was $3.65 for materials and $5.15 for labor and overhead, the total cost assigned to the ending work in process inventory was:
Direct materials $ 5.30 Direct labor $ 4.40 Variable manufacturing overhead $ 2.00 Fixed manufacturing overhead $ 22,000 Sales commissions $ 0.50 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 6,000 Selling price per unit $ 24.10 Direct materials $ 5.30 Direct labor 4.40 Variable manufacturing overhead 2.00 Sales commissions 0.50 Variable administrative expense 0.40 Variable cost per unit sold 12.60 Contribution margin per unit $ 11.50
If the selling price is $24.10 per unit, what is the contribution margin per unit sold?
Direct materials $ 5.10 Direct labor $ 5.20 Variable manufacturing overhead $ 1.90 Fixed manufacturing overhead $ 11.00 Fixed selling expense $ 3.70 Fixed administrative expense $ 2.00 Sales commissions $ 0.50 Variable administrative expense $ 0.45 Selling price per unit $ 29.00 Direct materials $ 5.10 Direct labor 5.20 Variable manufacturing overhead 1.90 Sales commissions 0.50 Variable administrative expense 0.45 Variable cost per unit sold 13.15 Contribution margin per unit $ 15.85
If the selling price is $29.00 per unit, the contribution margin per unit sold is closest to:
During the month of May, direct labor cost totaled $14,985 and direct labor cost was 45% of prime cost. Direct labor cost = $14,985 Direct labor cost = 0.45 × Prime cost Total manufacturing cost = $75,000 Direct labor cost = 0.45 × Prime cost Prime cost = Direct labor cost ÷ 0.45 Prime cost = $14,985 ÷ 0.45 = $33,300 Total manufacturing cost = Prime cost + Manufacturing overhead cost $75,000 = $33,300 + Manufacturing overhead cost Manufacturing overhead cost = $41,700
If total manufacturing costs during May were $75,000, the manufacturing overhead was:
Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $470,000 or a new model 220 machine costing $428,000 to replace a machine that was purchased 6 years ago for $455,000. The old machine was used to make product I43L until it broke down last week. Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 220 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product I43L. Management also considered, but rejected, the alternative of simply dropping product I43L. If that were done, instead of investing $340,000 in the new machine, the money could be invested in a project that would return a total of $461,000. Differential cost = $470,000 − $428,000 = $42,000
In making the decision to buy the model 220 machine rather than the model 370 machine, the differential cost was:
In April, one of the processing departments at Terada Corporation had beginning work in process inventory of $41,000 and ending work in process inventory of $47,000. During the month, $264,000 of costs were added to production and the cost of units transferred out from the department was $258,000. 11 Weighted-average method Costs to be accounted for: Cost of beginning work in process inventory $ 41,000 Costs added to production during the period 264,000 Total cost to be accounted for $ 305,000
In the department's cost reconciliation report for April, the total cost to be accounted for under the weighted-average method would be:
In August, one of the processing departments at Tsuzuki Corporation had beginning work in process inventory of $25,000 and ending work in process inventory of $14,000. During the month, $293,000 of costs were added to production. Total cost to be accounted for = Beginning work in process inventory + Cost added to production = $25,000 + $293,000 = $318,000
In the department's cost reconciliation report for August, the total cost to be accounted for would be:
In June, one of the processing departments at Furbush Corporation had ending work in process inventory of $14,000. During the month, $424,000 of costs were added to production and the cost of units transferred out from the department was $446,000. 11 Cost of beginning work in process inventory = Cost of ending work in process inventory + Cost of units transferred out - Costs added to production = $14,000 + $446,000 - $424,000 = $36,000
In the department's cost reconciliation report for January, the cost of beginning work in process inventory for the department would be:
In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $22,000 and ending work in process inventory of $27,000. During the month, the cost of units transferred out from the department was $157,000. Weighted-average method Costs to be accounted for as follows: Cost of ending work in process inventory $ 27,000 Cost of units transferred out 157,000 Total cost accounted for $ 184,000
In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:
Direct materials $ 39,700 Direct labor $ 23,200 Manufacturing overhead $ 24,000 Selling expenses $ 20,300 Administrative expense $ 33,900 Prime cost = Direct materials + Direct labor = $39,700 + $23,200 = $62,900
Prime costs during the month totaled:
Almaraz Corporation has two manufacturing departments--Forming and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Finishing Total Estimated total machine-hours (MHs) 7,000 3,000 10,000 Estimated total fixed manufacturing overhead cost $ 40,600 $ 8,100 $ 48,700 Estimated variable manufacturing overhead cost per MH $ 1.30 $ 2.80 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. 11 The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead $ 40,600 Estimated variable manufacturing overhead ($1.30 per MH × 7,000 MHs) 9,100 Estimated total manufacturing overhead cost $ 49,700 Finishing Estimated fixed manufacturing overhead $ 8,100 Estimated variable manufacturing overhead ($2.80 per MH × 3,000 MHs) 8,400 Estimated total manufacturing overhead cost $ 16,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($49,700 + $16,500 = $66,200) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 66,200 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.62 per MH
That predetermined manufacturing overhead rate is closest to:
Saada Corporation uses the weighted-average method in its process costing system. The Fitting Department is the second department in its production process. The data below summarize the department's operations in March. Units Percent Complete with Respect to Conversion Beginning work in process inventory 3,900 20 % Transferred in from the prior department during March 59,200 Ending work in process inventory 7,400 60 % 11 Weighted-average method Units transferred to the next department = Units in beginning work in process + Units started into production - Units in ending work in process = 3,900 + 59,200 - 7,400 = 55,700 Conversion Units completed and transferred out: Units transferred to the next department (a) 55,700 Cost per equivalent unit (b) $ 6.00 Cost of units completed and transferred out (a) × (b) $ 334,200
The Fitting Department's cost per equivalent unit for conversion cost for March was $6.00. How much conversion cost was assigned to the units transferred out of the Fitting Department during March?
arido Corporation has two manufacturing departments--Casting and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Assembly Total Estimated total machine-hours (MHs) 8,000 2,000 10,000 Estimated total fixed manufacturing overhead cost $ 44,000 $ 4,200 $ 48,200 Estimated variable manufacturing overhead cost per MH $ 1.90 $ 3.00 During the most recent month, the company started and completed two jobs--Job A and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job A Job H Casting machine-hours 5,400 2,600 Assembly machine-hours 800 1,200 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. 11 The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead $ 44,000 Estimated variable manufacturing overhead ($1.90 per MH × 8,000 MHs) 15,200 Estimated total manufacturing overhead cost $ 59,200 Assembly Estimated fixed manufacturing overhead $ 4,200 Estimated variable manufacturing overhead ($3.00 per MH × 2,000 MHs) 6000 Estimated total manufacturing overhead cost $ 10,200 The second step is to combine the estimated manufacturing overhead costs in the two departments ($59,200 + $10,200 = $69,400) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 69,400 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.94 per MH The overhead applied to Job H is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $6.94 per MH x (2,600 MHs + 1,200 MHs) = $6.94 per MH x (3,800 MHs) = $26,372
The amount of manufacturing overhead applied to Job H is closest to:
Malakan Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Finishing Machine-hours 18,000 11,000 Direct labor-hours 2,000 9,000 Total fixed manufacturing overhead cost $ 102,600 $ 96,300 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.90 During the current month the company started and finished Job K368. The following data were recorded for this job: Job K368: Machining Finishing Machine-hours 80 30 Direct labor-hours 20 40 11 Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $102,600 + ($2.10 per machine-hour × 18,000 machine-hours) = $102,600 + $37,800 = $140,400 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $140,400 ÷ 18,000 machine-hours = $7.80 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.80 per machine-hour × 80 machine-hours = $624
The amount of overhead applied in the Machining Department to Job K368 is closest to:
Beat Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 40,000 Total fixed manufacturing overhead cost $ 344,000 Variable manufacturing overhead per machine-hour $ 3.90 Recently, Job M759 was completed. It required 60 machine-hours. 11 Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $344,000 + ($3.90 per machine-hour × 40,000 machine-hours) = $344,000 + $156,000 = $500,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $500,000 ÷ 40,000 machine-hours = $12.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $12.50 per machine-hour × 60 machine-hours = $750
The amount of overhead applied to Job M759 is closest to:
Carradine Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $105,000, variable manufacturing overhead of $3.00 per machine-hour, and 70,000 machine-hours. The company recently completed Job P233 which required 60 machine-hours. 11 Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $105,000 + ($3.00 per machine-hour × 70,000 machine-hours) = $105,000 + $210,000 = $315,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $315,000 ÷ 70,000 machine-hours = $4.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $4.50 per machine-hour × 60 machine-hours = $270
The amount of overhead applied to Job P233 is closest to:
Stockmaster Corporation has two manufacturing departments--Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 27,000 $ 10,500 $ 37,500 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.80 During the most recent month, the company started and completed two jobs--Job C and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job C Job H Direct materials $ 11,200 $ 7,500 Direct labor cost $ 21,000 $ 7,800 Forming machine-hours 3,400 1,600 Assembly machine-hours 2,000 3,000 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices. 11 The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead $ 27,000 Estimated variable manufacturing overhead ($1.10 per MH × 5,000 MHs) 5,500 Estimated total manufacturing overhead cost $ 32,500 Assembly Estimated fixed manufacturing overhead $ 10,500 Estimated variable manufacturing overhead ($2.80 per MH × 5,000 MHs) 14,000 Estimated total manufacturing overhead cost $ 24,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($32,500 + $24,500 = $57,000) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 57,000 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.70 per MH The overhead applied to Job C is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $5.70 per MH x (3,400 MHs + 2,000 MHs) = $5.70 per MH x (5,400 MHs) = $30,780 Job C's manufacturing cost: Direct materials $ 11,200 Direct labor cost 21,000 Manufacturing overhead applied 30,780 Total manufacturing cost $ 62,980 The selling price for Job C: Total manufacturing cost $ 62,980 Markup (40%) 25,192 Selling price $ 88,172
The calculated selling price for Job C is closest to:
Sales $ 910,000 Cost of goods sold 645,000 Gross margin 265,000 Selling and administrative expenses Selling $ 103,000 Administration 110,000 213,000 Net operating income $ 52,000 Unit sales = $910,000 ÷ $65 per book = 14,000 books Selling expenses = Fixed selling expenses + ($6 per book x 14,000 books) $103,000 = Fixed selling expenses + $84,000 Fixed selling expenses = $103,000 − $84,000 = $19,000 Administrative expenses = Fixed administrative expenses + (0.05 x $910,000) $110,000 = Fixed administrative expenses + $45,500 Fixed administrative expenses = $110,000 − $45,500 = $64,500 Variable administrative expense per unit = 0.05 x $65 per book = $3.25 per book Y = ($19,000 + $64,500) + ($6 + $3.25) X Y = $83,500 + $9.25X
The cost formula for selling and administrative expenses with "X" equal to the number of books sold is:
Haffner Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Beginning work in process inventory: Units in beginning work in process inventory 1,900 Materials costs $ 9,200 Conversion costs $ 10,500 Percent complete with respect to materials 85 % Percent complete with respect to conversion 55 % Units started into production during the month 8,400 Units transferred to the next department during the month 7,500 Materials costs added during the month $ 104,100 Conversion costs added during the month $ 185,800 Ending work in process inventory: Units in ending work in process inventory 2,800 Percent complete with respect to materials 60 % Percent complete with respect to conversion 50 % Weighted-average method Materials Conversion Units transferred to the next department 7,500 7,500 Ending work in process: Materials: 2,800 units × 60% 1,680 Conversion: 2,800 units × 50% 1,400 Equivalent units of production 9,180 8,900 Materials Conversion Cost of beginning work in process inventory $ 9,200 $ 10,500 Costs added during the period 104,100 185,800 Total cost (a) $ 113,300 $ 196,300 Equivalent units of production (b) 9,180 8,900 Cost per equivalent unit (a) ÷ (b) $ 12.342 $ 22.056 Materials Conversion Total Ending work in process inventory: Equivalent units of production (a) 1,680 1,400 Cost per equivalent unit (b) $ 12.342 $ 22.056 Cost of ending work in process inventory (a) × (b) $ 20,734.560 $ 30,878.400 $ 51,613
The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to:
Mundes Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in its Painting Department consisted of 3,900 units that were 60% complete with respect to materials and 40% complete with respect to conversion costs. The cost of the beginning work in process inventory in the department was recorded as $10,700. During the period, 9,900 units were completed and transferred on to the next department. The costs per equivalent unit for the period were $5.90 for material and $6.90 for conversion costs. 11 Weighted-average method Materials Conversion Total Units completed and transferred out: Units transferred to the next department (a) 9,900 9,900 Cost per equivalent unit (b) $ 5.90 $ 6.90 Cost of units completed and transferred out (a) × (b) $ 58,410 $ 68,310 $ 126,720
The cost of units transferred out during the month was:
Paceheco Corporation uses the weighted-average method in its process costing system. The Molding Department is the second department in its production process. The data below summarize the department's operations in January. Units Percent Complete with Respect to Conversion Beginning work in process inventory 6,000 70 % Transferred in from the prior department during January 59,900 Completed and transferred to the next department during January 57,700 Ending work in process inventory 8,200 40 % The accounting records indicate that the conversion cost that had been assigned to beginning work in process inventory was $35,458 and a total of $560,154 in conversion costs were incurred in the department during January. 11 Weighted-average method Conversion Units transferred to the next department 57,700 Ending work in process: Conversion: 8,200 units × 40% 3,280 Equivalent units of production 60,980 Conversion Cost of beginning work in process inventory $ 35,458 Costs added during the period 560,154 Total cost (a) $ 595,612 Equivalent units of production (b) 60,980 Cost per equivalent unit (a) ÷ (b) $ 9.767
The cost per equivalent unit for conversion costs for January in the Molding Department is closest to:
Darden Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 19,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $18,700. An additional 89,000 units were started into production during the month. There were 22,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of $841,880 in conversion costs were incurred in the department during the month. 11 Weighted-average method Units transferred to the next department = Units in beginning work in process + Units started into production - Units in ending work in process Units transferred to the next department = 19,000 + 89,000 - 22,000 = 86,000 Conversion Units transferred to the next department 86,000 Ending work in process: Conversion: 22,000 units × 70% 15,400 Equivalent units of production 101,400 Conversion Cost of beginning work in process inventory $ 18,700 Costs added during the period 841,880 Total cost (a) $ 860,580 Equivalent units of production (b) 101,400 Cost per equivalent unit (a) ÷ (b) $ 8.487
The cost per equivalent unit for conversion costs for the month is closest to:
Hache Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 17,150 units in its beginning work in process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $7,600. An additional 89,300 units were started into production during the month and 92,300 units were completed in the Welding Department and transferred to the next processing department. There were 14,150 units in the ending work in process inventory of the Welding Department that were 90% complete with respect to conversion costs. A total of $202,700 in conversion costs were incurred in the department during the month. 11 Weighted-average method Conversion Units transferred to the next department 92,300 Ending work in process: Conversion: 14,150 units × 90% 12,735 Equivalent units of production 105,035 Conversion Cost of beginning work in process inventory $ 7,600 Costs added during the period 202,700 Total cost (a) $ 210,300 Equivalent units of production (b) 105,035 Cost per equivalent unit (a) ÷ (b) $ 2.002
The cost per equivalent unit for conversion costs for the month is closest to:
Inacio Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Beginning work in process inventory: Units in beginning work in process inventory 2,100 Materials costs $ 14,200 Conversion costs $ 6,300 Percent complete with respect to materials 75 % Percent complete with respect to conversion 20 % Units started into production during the month 10,800 Units transferred to the next department during the month 9,700 Materials costs added during the month $ 173,300 Conversion costs added during the month $ 243,300 Ending work in process inventory: Units in ending work in process inventory 3,200 Percent complete with respect to materials 90 % Percent complete with respect to conversion 30 % Weighted-average method Materials Units transferred to the next department 9,700 Ending work in process: Materials: 3,200 units × 90% 2,880 Equivalent units of production 12,580 Materials Cost of beginning work in process inventory $ 14,200 Costs added during the period 173,300 Total cost (a) $ 187,500 Equivalent units of production (b) 12,580 Cost per equivalent unit (a) ÷ (b) $ 14.90
The cost per equivalent unit for materials for the month in the first processing department is closest to:
Direct materials $ 7.10 Direct labor $ 4.30 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 100,000 Sales commissions $ 1.20 Variable administrative expense $ 0.45 Fixed selling and administrative expense $ 36,800 Direct materials $ 7.10 Direct labor 4.30 Variable manufacturing overhead 1.60 Incremental manufacturing cost $ 13.00
The incremental manufacturing cost that the company will incur if it increases production from 8,000 to 8,001 units is closest to:
Ashe Corporation has two manufacturing departments--Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Customizing Total Estimated total machine-hours (MHs) 1,000 4,000 5,000 Estimated total fixed manufacturing overhead cost $ 4,700 $ 9,200 $ 13,900 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.60 During the most recent month, the company started and completed two jobs--Job B and Job K. There were no beginning inventories. Data concerning those two jobs follow: Job B Job K Machining machine-hours 700 300 Customizing machine-hours 1,600 2,400 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. 11 Machining Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 4,700 Estimated variable manufacturing overhead ($1.10 per MH × 1,000 MHs) 1,100 Estimated total manufacturing overhead cost (a) $ 5,800 Estimated total machine-hours (b) 1,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.80 per MH Customizing Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 9,200 Estimated variable manufacturing overhead ($2.60 per MH × 4,000 MHs) 10,400 Estimated total manufacturing overhead cost (a) $ 19,600 Estimated total machine-hours (b) 4,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 4.90 per MH Manufacturing overhead applied to Job K: Casting ($5.80 per MH × 300 MHs) $ 1,740 Finishing ($4.90 per MH × 2,400 MHs) 11,760 Total manufacturing overhead applied $ 13,500
The manufacturing overhead applied to Job K is closest to:
Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year: Direct materials $ 1,000 Direct labor $ 3,000 Sales commissions $ 4,000 Salary of production supervisor $ 2,000 Indirect materials $ 400 Advertising expense $ 800 Rent on factory equipment $ 1,000 Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. 11 Salary of production supervisor $ 2,000 Indirect materials 400 Rent on factory equipment 1,000 Total manufacturing overhead $ 3,400 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $3,400 ÷ 1,000 machine-hours = $3.40 per machine-hour
The predetermined overhead rate per hour will be:
Walbin Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in a particular department consisted of 19,500 units, 100% complete with respect to materials cost and 40% complete with respect to conversion costs. The total cost in the beginning work in process inventory was $25,800. A total of 56,000 units were transferred out of the department during the month. The costs per equivalent unit were computed to be $1.90 for materials and $3.60 for conversion costs. 11 Weighted-average method Materials Conversion Total Units completed and transferred out: Units transferred to the next department (a) 56,000 56,000 Cost per equivalent unit (b) $ 1.90 $ 3.60 Cost of units completed and transferred out (a) × (b) $ 106,400 $ 201,600 $ 308,000
The total cost of the units completed and transferred out of the department was:
Kurtulus Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Beginning work in process inventory: Units in beginning work in process inventory 2,400 Materials costs $ 8,800 Conversion costs $ 4,100 Percent complete with respect to materials 55 % Percent complete with respect to conversion 25 % Units started into production during the month 8,300 Units transferred to the next department during the month 7,500 Materials costs added during the month $ 111,900 Conversion costs added during the month $ 85,000 Ending work in process inventory: Units in ending work in process inventory 3,200 Percent complete with respect to materials 70 % Percent complete with respect to conversion 55 % Weighted-average method Materials Conversion Units transferred to the next department 7,500 7,500 Ending work in process: Materials: 3,200 units × 70% 2,240 Conversion: 3,200 units × 55% 1,760 Equivalent units of production 9,740 9,260 Materials Conversion Cost of beginning work in process inventory $ 8,800 $ 4,100 Costs added during the period 111,900 85,000 Total cost (a) $ 120,700 $ 89,100 Equivalent units of production (b) 9,740 9,260 Cost per equivalent unit (a) ÷ (b) $ 12.392 $ 9.622 Materials Conversion Total Units completed and transferred out: Units transferred to the next department (a) 7,500 7,500 Cost per equivalent unit (b) $ 12.392 $ 9.622 Cost of units completed and transferred out (a) × (b) $ 92,940 $ 72,165 $ 165,105
The total cost transferred from the first processing department to the next processing department during the month is closest to:
Session Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 70,000 Total fixed manufacturing overhead cost $ 511,000 Variable manufacturing overhead per direct labor-hour $ 2.10 Recently, Job K913 was completed with the following characteristics: Total direct labor-hours 150 Direct materials $ 705 Direct labor cost $ 4,650 11 Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $511,000 + ($2.10 per direct labor-hour × 70,000 direct labor-hours) = $511,000 + $147,000 = $658,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $658,000 ÷ 70,000 direct labor-hours = $9.40 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.40 per direct labor-hour × 150 direct labor-hours = $1,410 Direct materials $ 705 Direct labor cost 4,650 Manufacturing overhead applied 1,410 Total cost of Job K913 $ 6,765
The total job cost for Job K913 is closest to:
Tomey Corporation has two production departments, Forming and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Finishing Machine-hours 18,000 14,000 Direct labor-hours 2,000 8,000 Total fixed manufacturing overhead cost $ 99,000 $ 70,400 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.70 During the current month the company started and finished Job T617. The following data were recorded for this job: Job T617: Forming Finishing Machine-hours 90 20 Direct labor-hours 30 60 Direct materials $ 940 $ 350 Direct labor cost $ 960 $ 1,920 11 Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $99,000 + ($2.10 per machine-hour × 18,000 machine-hours) = $99,000 + $37,800 = $136,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $136,800 ÷ 18,000 machine-hours = $7.60 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.60 per machine-hour × 90 machine-hours = $684 Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $70,400 + ($3.70 per direct labor-hour × 8,000 direct labor-hours) = $70,400 + $29,600 = $100,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $100,000 ÷ 8,000 direct labor-hours = $12.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.50 per direct labor-hour × 60 direct labor-hours = $750 Forming Finishing Total Direct materials $ 940 $ 350 $ 1,290 Direct labor $ 960 $ 1,920 2,880 Manufacturing overhead applied $ 684 $ 750 1,434 Total cost of Job T617 $ 5,604
The total job cost for Job T617 is closest to:
Doakes Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 60,000 Total fixed manufacturing overhead cost $ 378,000 Variable manufacturing overhead per direct labor-hour $ 2.20 Recently, Job M843 was completed with the following characteristics: Number of units in the job 60 Total direct labor-hours 120 Direct materials $ 630 Direct labor cost $ 2,400 11 Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $378,000 + ($2.20 per direct labor-hour × 60,000 direct labor-hours) = $378,000 + $132,000 = $510,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $510,000 ÷ 60,000 direct labor-hours = $8.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.50 per direct labor-hour × 120 direct labor-hours = $1,020 Direct materials $ 630 Direct labor 2,400 Manufacturing overhead applied 1,020 Total cost of Job M843 $ 4,050 Total cost of Job M843 (a) $ 4,050 Number of units (b) 60 Unit product cost (a) ÷ (b) $ 67.50
The unit product cost for Job M843 is closest to
At a sales volume of 41,000 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $561,700. Sales commission per unit = Total sales commissions ÷ Unit sales = $561,700 ÷ 41,000 = $13.70 Total sales commission = Sales commission per unit × Unit sales = $13.70 × 38,800 = $531,560
To the nearest whole dollar, what should be the total sales commissions at a sales volume of 38,800 units?
Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 6,100 65% Conversion costs $ 7,200 45% A total of 7,300 units were started and 6,300 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Cost Materials costs $ 125,900 Conversion costs $ 207,400 The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs. 11 Weighted-average method Units in beginning work in process inventory + Units started into production or transferred in = Units in ending work in process inventory + Units completed and transferred out 800 + 7,300 = Units in ending work in process inventory + 6,300 Units in ending work in process inventory = 800 + 7,300 - 6,300 = 1,800 Conversion Units transferred to the next department 6,300 Ending work in process: Conversion: 1,800 units × 35% 630 Equivalent units of production 6,930
What are the equivalent units for conversion costs for the month in the first processing department?
Corporate headquarters building lease $ 87,600 Cosmetics Department sales commissions--Northridge Store $ 5,230 Corporate legal office salaries $ 60,500 Store manager's salary-Northridge Store $ 17,200 Heating-Northridge Store $ 20,200 Cosmetics Department cost of sales--Northridge Store $ 37,400 Central warehouse lease cost $ 11,100 Store security-Northridge Store $ 18,900 Cosmetics Department manager's salary--Northridge Store $ 4,150 Direct costs of the Cosmetics Department = Cosmetics Department sales commissions + Cosmetics Department cost of sales + Cosmetics Department manager's salary = $5,230 + $37,400 + $4,150 = $46,780
What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?
Cost of clay used in production $ 63,000 Wages paid to the workers who paint the figurines $ 80,000 Wages paid to the sales manager's secretary $ 32,000 Cost of junk mail advertising $ 49,000 Conversion costs include only the wages paid to the workers who paint the figurines.
What is the total of the conversion costs above?
Cost of clay used in production $ 79,000 Wages paid to the workers who paint the figurines $ 88,000 Wages paid to the sales manager's secretary $ 40,000 Cost of junk mail advertising $ 57,000 Direct costs include the cost of clay used in production and the wages paid to the workers who paint the figurines. $79,000 + $88,000 = $167,000
What is the total of the direct costs above?
The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and on machine-hours in Dept. B. At the beginning of the year, the Corporation made the following estimates: Dept. A Dept. B Direct labor cost $ 60,000 $ 40,000 Manufacturing overhead $ 90,000 $ 45,000 Direct labor-hours 6,000 9,000 Machine-hours 2,000 15,000 Dept. A Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $90,000 ÷ $60,000 = 150% of direct labor cost Dept. B Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $45,000 ÷ 15,000 machine-hours = $3.00 per machine-hour
What predetermined overhead rates would be used in Dept. A and Dept. B, respectively?
Bims Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 3,400 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 64,500 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 25,000 units in the ending work in process inventory of the Assembly Department that were 60% complete with respect to conversion costs. 11 Weighted-average method Units transferred to the next department = Units in beginning work in process + Units started into production - Units in ending work in process = 3,400 + 64,500 - 25,000 = 42,900 Conversion Units transferred to the next department 42,900 Ending work in process: Conversion: 25,000 units × 60% 15,000 Equivalent units of production 57,900
What were the equivalent units for conversion costs in the Assembly Department for the month?
Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total units in the allocation base
Which of the following is the correct formula to compute the predetermined overhead rate?
It is often overly simplistic and incorrect to assume that direct labor-hours is a company's only manufacturing overhead cost driver.
Which of the following statements about using a plantwide overhead rate based on direct labor is correct?
In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on machine-hours rather than on direct labor-hours.
Which of the following statements is not correct concerning multiple overhead rate systems?
Number of units sold 5,900 Selling price per unit $ 600 Unit cost of goods sold $ 411 Variable selling expense per unit $ 68 Total fixed selling expense $ 125,400 Variable administrative expense per unit $ 24 Total fixed administrative expense $ 207,300 Sales (5,900 units × $600 per unit) = $3,540,000 Cost of goods sold (5,900 units × $411 per unit) = $2,424,900 Selling expense ((5,900 units × $68 per unit) + $125,400) = $526,600 Administrative expense ((5,900 units × $24 per unit) + $207,300) = $348,900
a. Prepare a traditional format income statement for July.
Direct materials $ 5.30 Direct labor $ 4.40 Variable manufacturing overhead $ 2.00 Fixed manufacturing overhead $ 22,000 Sales commissions $ 0.50 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 6,000 Sales commissions $ 0.50 Variable administrative expense 0.40 Variable selling and administrative expense per unit $ .90 Total variable selling and administrative expense ($0.90 per unit x 5,000 units sold) $ 4,500 Total fixed selling and administrative expense 6,000 Total period (nonmanufacturing) cost $ 10,500
b. For financial reporting purposes, what is the total amount of period costs incurred to sell 5,000 units?
Number of units sold 5,900 Selling price per unit $ 600 Unit cost of goods sold $ 411 Variable selling expense per unit $ 68 Total fixed selling expense $ 125,400 Variable administrative expense per unit $ 24 Total fixed administrative expense $ 207,300 Sales (5,900 units × $600 per unit) = $3,540,000 Cost of goods sold (5,900 units × $411 per unit) = $2,424,900 Variable selling expense (5,900 units × $68 per unit) = $401,200 Variable administrative expense (5,900 units × $24 per unit) = $141,600
b. Prepare a contribution format income statement for July.
Direct materials $ 5.30 Direct labor $ 4.40 Variable manufacturing overhead $ 2.00 Fixed manufacturing overhead $ 22,000 Sales commissions $ 0.50 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 6,000 Total variable manufacturing overhead cost ($2.00 per unit x 6,000 units) $ 12,000 Total fixed manufacturing overhead cost 22,000 Total indirect manufacturing cost $ 34,000
e. If 6,000 units are produced, what is the total amount of indirect manufacturing costs incurred?