ch 2,3,4,10,11

Concord Corporation has a materials price standard of $2.00 per pound. 5400 pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 5400 pounds, although the standard quantity allowed for the output was 5200 pounds.Concord Corporation's materials price variance is

$1080 U. ($2.20 - $2.00) × 5400 = $1080 U(Actual price- Standard price) × Actual quantity used = materials price variance (unfavorable))

Concord's standard quantities for 1 unit of product include 4 pounds of materials and 0.5 labor hours. The standard rates are $2 per pound and $3 per hour. The standard overhead rate is $4 per direct labor hour. The total standard cost of Concord's product is

$11.50. ($2 × 4) + ($3 × 0.5) = $9.50 + ($4 × 0.5) = $11.50(Material Standard rate per pound × pounds of material) + (Labor standard rate per hour × labor hours) + (Standard overhead rate x labor hours) = Total standard cost of product)

The following information is available for completed Job No. 402: Direct materials, $170000; direct labor, $230000; manufacturing overhead applied, $160000; units produced, 5000 units; units sold, 4000 units. The cost of the finished goods on hand from this job is

$112000.

In the Oriole Company, indirect labor is budgeted for $72000 and factory supervision is budgeted for $34000 at normal capacity of 160000 direct labor hours. If 180000 direct labor hours are worked, flexible budget total for these costs is

$115000. (($72000 / 160000) x 180000) + $34000 = $115000((Indirect labor / Direct labor hours (Static budget)) x direct labor hours worked: flexible budget) + factory supervision (fixed) = flexible budget costs)

Sunland Company has a materials price standard of $2.00 per pound. 4600 pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 4600 pounds, although the standard quantity allowed for the output was 4000 pounds.Sunland Company's materials quantity variance is

$1200 U. (4600 - 4000) × $2.00 = $1200 U (Actual quantity - Standard quantity allowed) × (Standard price per pound) = materials quantity variance (favorable/unfavorable))

Sheffield Corp. thinks machine hours is the best activity base for its manufacturing overhead. The estimate of annual overhead costs for its jobs was $2850000. The company used 1000 hours of processing on Job No. B12 during the period and incurred overhead costs totaling $2900000. The budgeted machine hours for the year totaled 20000. How much overhead should be applied to Job No. B12?

$142500

In the Concord Corporation, indirect labor is budgeted for $101250 and factory supervision is budgeted for $36000 at normal capacity of 150000 direct labor hours. If 160000 direct labor hours are worked, flexible budget total for these costs is:

$144000. (($101250 / 150000) x 160000) + $36000 = $144000(Budgeted Indirect labor / Budgeted direct labor hours)_ x Direct labor hours worked: flexible budget) + factory supervision (fixed) = Total flexible budget costs)

Sheffield Corp. produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is 0.3 pounds and 0.1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $0.1 per pound, and receiving and handling costs are $0.07 per pound. The hourly wage rate is $16 per hour, but a raise which will average $0.10 will go into effect soon. Payroll taxes are $1.00 per hour, and fringe benefits average $2.20 per hour. Standard production time is 1 hour per unit, and the allowance for rest periods and setup is 0.2 hours and 0.1 hours, respectively.The standard direct labor rate per hour is

$19.30. $16 + $0.10 + $1.00 + $2.20 = $19.30(Hourly wage rate + raise per hour + payroll taxes per hour + fringe benefits per hour = standard direct labor rate per hour)

Sunland Company has the following equivalent units of production for July: materials 23960 and conversion costs 19150. Production cost data are: MaterialsConversionWork in process, July 1$ 6900 $ 2300 Costs added in July5300036000 The unit production costs for July are: Materials Conversion Costs

$2.50 $2.00 $59900 ÷ 23960 = $2.50; $38300 ÷ 19150 = $2.00[(Total materials cost ÷ Equivalent units = Unit cost); (Total conversion cost ÷ Equivalent units = Unit cost)]

Hale Company manufactures two models of its couch, the Mini and the Maxi. The Mini model requires 10000 direct labor hours and the Maxi model requires 40000 direct labor hours. The company produces 4000 units of the Mini model and 1000 units of the Maxi model each year. The company produces the Mini model in batch sizes of 200, while it produces the Maxi model in batch sizes of 100. The company expects to incur $330000 of total setup costs this year. How much of the setup costs are allocated to the Mini model using ABC costing?

$220000 $330000 / (4000 / 200) + (1000 / 100) = $11000 x (4000 / 200) = $220000((Total Setup costs / Total Batches) x Mini model Batches = Setup costs allocated to the mini model using ABC costing)

Younger, Inc. manufactures recliners for the hotel industry. It has two products, the Heater and the Massager, and total overhead is $4256000. The company plans to manufacture 400 Heaters and 100 Massagers this year. In manufacturing the recliners, the company must perform 600 material moves for the Heater and 400 for the Massager; it processes 900 purchase orders for the Heater and 700 for the Massager; and the company's employees work 1400 direct labor hours on the Heater product and 3400 on the Massager. Younger's total material handling costs are $3000000 and its total processing costs are $1256000. Using ABC, how much overhead would be assigned to the Heater product?

$2506500 ($3000000 / (600 + 400) = $3000 x 600 = $1800000; $1256000 / (900 + 700) = $785 x 900 = $706500; $1800000 + $706500 = $2506500((Material handling Costs / Material Moves) x Material moves for Heater) + ((Total processing costs / Purchase orders processed) x Purchase order processed for Heater) = Overhead assigned to Heater product))

Sunland Company is planning to sell 1000 buckets and produce 380 buckets during March. Each bucket requires 300 grams of plastic and one-half hour of direct labor. Plastic costs $10 per 300 grams and employees of the company are paid $15 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Sunland has 900 kilos of plastic in beginning inventory and wants to have 100 kilos in ending inventory. How much is the total amount of budgeted direct labor for March?

$2850 (380 x 0.50 x $15) = $2850(Buckets produced x labor rate per hour x .5 direct labor hours = Budgeted direct labor for March)

If the materials price variance is $3000 F and the materials quantity and labor variances are each $2700 U, what is the total materials variance?

$300 F $3000 F - $2700 U = $300 F(Materials price variance + Materials quantity variance) = Total materials variance

The standard rate of pay is $20 per direct labor hour. If the actual direct labor payroll was $152880 for 7800 direct labor hours worked, the direct labor price (rate) variance is

$3120 favorable. ($20 - $19.60) × 7800 = $3120 favorable(Standard labor rate - Actual labor rate) × (Direct labor hours worked) = direct labor price (rate) variance (favorable))

Marigold Corp. recorded operating data for its shoe division for the year. Sales$2000000Contribution margin500000Controllable fixed costs180000Average total operating assets1000000 How much is controllable margin for the year?

$320000 $500000 - $180000 = $320000(Contribution Margin - Controllable Fixed Costs = Controllable Margin)

The per-unit standards for direct labor are 2 direct labor hours at $15 per hour. If in producing 700 units, the actual direct labor cost was $17600 for 1100 direct labor hours worked, the total direct labor variance is

$3400 favorable. (700 × 2) × $15 = $21000; $21000 - $17600 = $3400 favorable(Standard Direct Labor Cost - Actual Direct Labor Cost = Total Direct Labor Variance (favorable))

Concord Corporation budgeted manufacturing costs for 30000 tons of steel are: Fixed manufacturing costs$50000 per monthVariable manufacturing costs$12 per ton of steel Concord produced 25000 tons of steel during March. How much is the flexible budget for total manufacturing costs for March?

$350000 ($12 x 25000) + $50000 = $350000(Variable manufacturing cost per ton of steel x tons of steels produced) + Fixed manufacturing costs = Total manufacturing costs

Nott Company manufactures two products, pillows and comforters. The company has estimated its overhead in the order-processing department to be $480000. The company produces 50000 pillows and 80000 comforters each year. Pillow production requires 25000 machine hours, comforter production requires 50000 machine hours. The company places raw materials orders 10 times per month, 2 times for raw materials for pillows and the remainder for raw materials for comforters. How much of the order processing overhead should be allocated to comforters?

$384000 $480000 / (10 x 12) = $4000; $4000 x 8 x 12 = $384000(Order-processing overhead / Total Raw materials orders) x Comforters Raw Materials orders = Order processing overhead allocated to comforters)

Marigold Corp. uses flexible budgets. At normal capacity of 13000 units, budgeted manufacturing overhead is: $65000 variable and $200000 fixed. If Marigold had actual overhead costs of $271000 for 15000 units produced, what is the difference between actual and budgeted costs?

$4000 favorable. (($65000 / 13000) x 15000) + $200000 = $275000 - $271000 = $4000 favorable(Variable manufacturing overhead / budgeted units) x actual units produced) + Fixed manufacturing overhead = Budgeted Costs; Budgeted Costs - Actual = Difference (Favorable))

As of December 31, 2019, Nilsen Industries had $2000 of raw materials inventory. At the beginning of 2019, there was $1600 of materials on hand. During the year, the company purchased $404000 of materials; however it paid for only $354000. How much inventory was requisitioned for use on jobs during 2019?

$403600

Bonita Industries uses flexible budgets. At normal capacity of 20000 units, budgeted manufacturing overhead is: $60000 variable and $270000 fixed. If Stone had actual overhead costs of $331600 for 22000 units produced, what is the difference between actual and budgeted costs?

$4400 favorable ($60000 / 20000) x 22000) + $270000 = $336000 - $331600 = $4400 favorable(Variable manufacturing overhead / units: budget) x actual units produced) + fixed manufacturing = Flexible budget; Flexible Budget - Actual = Difference (favorable)

Sunland Company prepared a fixed budget of 80000 direct labor hours, with estimated overhead costs of $400000 for variable overhead and $90000 for fixed overhead. Sunland then prepared a flexible budget at 72000 labor hours. How much is total overhead costs at this level of activity?

$450000 (($400000 / 80000) x 72000) + $90000 = $450000((Estimated overhead costs / fixed budget direct labor hours) x flexible budget direct labor hours) + Fixed overhead = Total overhead costs)

In the Shaping Department of Sheridan Company the unit materials cost is $2.00 and the unit conversion cost is $1.60. The department transferred out 8900 units and had 2000 units in ending work in process 20% complete. If all materials are added at the beginning of the process, the total cost to be assigned to the ending work in process is

$4640. (2000 units x 100% x $2.00) + (2000 units x 20% x $1.60) = $4640[(Ending WIP units x % complete x Unit cost, material) + (Ending WIP units x % complete x Unit cost, conversion) = Total cost of ending WIP]

A company uses 8400 pounds of materials and exceeds the standard by 400 pounds. The quantity variance is $2100 unfavorable. What is the standard price?

$5.3 $2100 U = (8400 + 400) - 8400) × X; X = $5.3(Quantity variance = (Actual Quantity - Standard Quantity) × Standard Price (X))

A company uses 40000 pounds of materials for which it paid $6 a pound. The materials price variance was $20000 unfavorable. What is the standard price per pound?

$5.50 $20000 U = 40000 × ($6 - X); X = $5.50(Materials price variance = Actual Quantity used × (Actual Price - Standard Price (X)

A company's planned activity level for next year is expected to be 100000 machine hours. At this level of activity, the company budgeted the following manufacturing overhead costs: Variable Fixed Indirect materials$220000 Depreciation$60000Indirect labor280000 Taxes10000Factory supplies28000 Supervision50000 A flexible budget prepared at the 80000 machine hours level of activity would show total manufacturing overhead costs of

$542400. (($220000 + $280000 + $28000) / 100000) = $5.28 x 80000 = $422400 + $60000 + $10000 + $50000 = $542400((Indirect materials + Indirect labor + Factory supplies) / Expected machine hours (master budget)) X Machine hours: Flexible budget) + Depreciation + Taxes + Supervision) = Total manufacturing overhead costs)

A company developed the following per-unit standards for its product: 2 pounds of direct materials at $10 per pound. Last month, 1000 pounds of direct materials were purchased for $3800. The direct materials price variance for last month was

$6200 favorable. ($3.80 - $10) × 1000 = $6200 favorable(Actual Rate per pound - Standard rate per pound) × (Pounds purchased (actual) = direct materials price variance (favorable)

Sheffield Corp. is planning to sell 1070 boxes of ceramic tile, with production estimated at 800 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.50 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $17 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Sheffield has 3300 pounds of clay mix in beginning inventory and wants to have 5400 pounds in ending inventory.What is the total amount to be budgeted for direct labor for the month?

$6800 800 x 0.50 x $17 = $6800(Production estimate x 0.50 of direct labor hours x direct labor rate = Budgeted for direct labor)

For its inspecting cost pool, Ellsworth, Inc. expected overhead cost of $280000 and 4000 inspections. The actual overhead cost for that cost pool was $360000 for 5000 inspections. The activity-based overhead rate used to assign the costs of the inspecting cost pool to products is

$70 per inspection. $280000 / 4000 = $70(Expected overhead / Expected inspections = Activity-based overhead rate used to assign the costs of the inspecting cost pool)

One of Stine Company's activity cost pools is machine setups, with estimated overhead of $180000. Stine produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?

$72000 $180000 / 1000 = $180 x 400 = $72000((Estimated Overhead of Machine Setups / Total Setups) x Sparklers setups = Machine setup cost pool assigned to sparklers)

Cost of goods manufactured equals $90000 for 2019. Finished goods inventory is $3000 at the beginning of the year and $4500 at the end of the year. Beginning and ending work in process for 2019 are $3000 and $4000, respectively. How much is cost of goods sold for the year?

$88500

The standard number of hours that should have been worked for the output attained is 6000 direct labor hours and the actual number of direct labor hours worked was 6300. If the direct labor price variance was $4725 unfavorable, and the standard rate of pay was $9 per direct labor hour, what was the actual rate of pay for direct labor?

$9.75 per direct labor hour $4725U = (X - $9) × 6300; X = $9.75(Labor price variance = (Actual rate (x) - Standard rate) × actual direct labor hours worked)

Ben Gordon, Inc. manufactures 2 products, wheels and seats. The company has estimated its overhead in the assembling department to be $375000. The company produces 300000 wheels and 600000 seats each year. Each wheel uses 2 parts, and each seat uses 3 parts. How much of the assembly overhead should be allocated to wheels?

$93750. $375000 / ((300000 x 2) + (600000 x 3)) = 0.15625 x 300000 x 2 = $93750(Estimated Overhead for Assembly / Number of Parts for Wheels and Seats) x Number of wheels = Assembly overhead allocated to wheels)

Vaughn Manufacturing budgeted costs for 70000 linear feet of block are: Fixed manufacturing costs$24000 per monthVariable manufacturing costs$16 per linear foot Vaughn installed 60000 linear feet of block during March. How much is budgeted total manufacturing costs in March?

$984000 ($16 x 60000) + $24000 = $984000(Variable manufacturing cost per linear foot x Linear feet installed) + Fixed manufacturing costs = Budgeted total manufacturing costs)

The formula for the materials price variance is

(AQ × AP) - (AQ × SP).

The formula for the materials quantity variance is

(AQ × SP) - (SQ × SP).

In the month of June, a department had 20600 units in beginning work in process that were 65% complete. During June, 90400 units were started into production. At the end of June there were 9200 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. How many units were transferred out of the department in June?

101800 20600 + 90400 - 9200 = 101800(Beginning WIP units + Units transferred in - Ending WIP units = Units transferred out)

In the month of June, a department had 19900 units in beginning work in process that were 75% complete. During June, 90200 units were transferred into production from another department. At the end of June there were 11000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. The equivalent units of production for conversion costs for June were

103500 equivalent units. 19900 + 90200 - 11000 = 99100; (11000 units x 40%) + 99100 = 103500[Beginning WIP units + Units transferred in - Ending WIP units = Units transferred out; (Ending WIP units x % complete) + Units completed and transferred = Equivalent units]

In the month of June, a department had 20600 units in beginning work in process that were 65% complete. During June, 91000 units were transferred into production from another department. At the end of June there were 10100 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. The equivalent units of production for materials for June were

111600 equivalent units. 20600 + 91000 - 10100 = 101500; (10100 units x 100%) + 101500 = 111600

Sunland Company had the following department information for the month: Total materials costs$56000 Equivalent units of producion - materials7000 Total conversion costs$85000 Equivalent units of conversion costs17000 How much is the total manufacturing cost per unit?

13.00 $56000 ÷ 7000 = $8.00; $85000 ÷ 17000 = $5.00; $8.00 + $5.00 = $13.00[(Total materials cost ÷ Equivalent units = Unit cost, materials); (Total conversion cost ÷ Equivalent units = Unit cost, conversion); Unit cost, materials + Unit cost, conversion = Unit cost, total manufacturing cost]

Swifty Corporation uses job order costing for its brand new line of sewing machines. The cost incurred for production during 2019 totaled $17000 of materials, $12000 of direct labor costs, and $8000 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of any year. Beginning work in process totaled $12000, and the ending balance is $9000. During the year, the company completed 25 machines. How much is the cost per machine?

1600

Marigold Company had no beginning work in process. During the period, 16600 units were completed, and there were 1250 units of ending work in process. How many units were started into production?

17850. 0 + X - 1250 = 16600; X = 17850(Beginning WIP units + Units transferred in - Ending WIP units = Units transferred out)

Sheffield Corp. produces a product that requires 2.1 pounds of materials per unit. The allowance for waste and spoilage per unit is 0.2 pounds and 0.1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $0.1 per pound, and receiving and handling costs are $0.07 per pound. The hourly wage rate is $12 per hour, but a raise which will average $0.30 will go into effect soon. Payroll taxes are $1.20 per hour, and fringe benefits average $2.40 per hour. Standard production time is 1 hour per unit, and the allowance for rest periods and setup is 0.2 hours and 0.1 hours, respectively.The standard direct materials quantity per unit is

2.4 pounds. 2.1 + 0.2 + 0.1 = 2.4 pounds(Pounds of Materials per unit + Waste per unit + Spoilage per unit = Standard direct materials quantity per unit)

A company expected its annual overhead costs to be $1300000 and direct labor costs to be $500000. Actual overhead was $1100000, and actual labor costs totaled $550000. How much is the company's predetermined overhead rate to the nearest cent?

2.60

Sheridan Company produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is 0.3 pounds and 0.1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $0.10 per pound, and receiving and handling costs are $0.07 per pound. The hourly wage rate is $12.00 per hour, but a raise which will average $0.30 will go into effect soon. Payroll taxes are $1.20 per hour, and fringe benefits average $2.40 per hour. Standard production time is 2.0 hour per unit, and the allowance for rest periods and setup is 0.4 hours and 0.3 hours, respectively.The standard direct labor hours per unit is

2.7 hours. 2.0 + 0.4 + 0.3 = 2.7 hours(Standard production time per hour + Rest periods per hour + Setup per hour = Standard direct labor hours per unit)

Swifty Company had the following department data: Physical UnitsWork in process, July 130300Completed and transferred out165700 Work in process, July 3144600 All materials are added at the beginning of the process. What is the total number of equivalent units for materials in July?

210300. (44600 units x 100%) + 165700 = 210300[(Ending WIP units x % complete) + Units completed and transferred = Equivalent units]

21100 units in a process that are 70% complete are referred to as:

21100 units in a process that are 70% complete are referred to as: 21100 units x 70% = 14770(WIP units x % complete = Equivalent units)

In the Shaping Department of Vaughn Company the unit materials cost is $6.00 and the unit conversion cost is $2.00. The department transferred out 40300 units and had 4800 units in ending work in process 25% complete. If all materials are added at the beginning of the process, the total cost to be assigned to the ending work in process is

31200 (4800 units x 100% x $6.00) + (4800 units x 25% x $2.00) = $31200[(Ending WIP units x % complete x Unit cost, material) + (Ending WIP units x % complete x Unit cost, conversion) = Total cost of ending WIP]

A process with no beginning work in process, completed and transferred out 36300 units during a period and had 14500 units in the ending work in process that were 50% complete. How much is equivalent units of production for the period for conversion costs?

43550 equivalent units. (14500 units x 50%) + 36300 = 43550[(Ending WIP units x % complete) + Units completed and transferred = Equivalent units]

Hartley Company produces two products, Flower and Planter. Flower is a high-volume item totaling 20000 units annually. Planter is a low-volume item totaling only 6000 units per year. Flower requires 1 hour of direct labor for completion, while each unit of Planter requires 2 hours. Therefore, total annual direct labor hours are 32000 (20000 + 12000). Expected annual manufacturing overhead costs are $800000. Hartley uses a traditional costing system and assigns overhead based on direct labor hours. Each unit of Planter would be assigned overhead of

50.00 $800000 / 32000 = $25.00; $25.00 x 2 = $50.00((Expected Annual manufacturing overhead costs / total annual direct labor hours) x Required hours = Assigned overhead of each unit of Planter)

One of Matheny Company's activity cost pools is inspecting, with estimated overhead of $170000. Matheny produces throw rugs (700 inspections) and area rugs (1300 inspections). How much of the inspecting cost pool should be assigned to throw rugs?

59500 $170000 / (700 + 1300) = $85 x 700 = $59500((Estimated overhead / (Inspections: throw rugs + Inspections: area rugs)) x Inspections: throw rugs = Inspecting cost pool assigned to throw rugs)

Waterway Industries had average operating assets of $6000000 and sales of $3000000 in 2016. If the controllable margin was $360000, the ROI was

6% $360000 / $6000000 = 0.06 or 6%(Controllable margin / Average operating assets = ROI)

A department adds all raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning work in process inventory; 89300 units were started into production in January; and there were 19400 units that were 45% complete in the ending work in process inventory at the end of January. What were the equivalent units of production for conversion costs for the month of January?

78630 equivalent units. (19400 units x 45%) + ((89300 - 19400) x 100%) = 78630[(Ending WIP units x % complete) + ((Units started into production - Ending WIP units) x % complete) = Equivalent units]

A department adds all raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning work in process inventory; 89600 units were started into production in January; and there were 19300 units that were 30% complete in the ending work in process inventory at the end of January. What were the equivalent units of production for materials for the month of January?

89600 equivalent units. (19300 units x 100%) + ((89600 - 19300) x 100%) = 89600[(Ending WIP units x % complete) + ((Units started into production - Ending WIP units) x % complete) = Equivalent units]

A process with no beginning work in process, completed and transferred out 86000 units during a period and had 49600 units in the ending work in process inventory that were 20% complete. The equivalent units of production for the period for conversion costs were:

95920 equivalent units. (49600 units x 20%) + 86000 = 95920[(Ending WIP units x % complete) + Units completed and transferred = Equivalent units]

Edwards Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $1,800,000 for the year, and machine usage is estimated at 200,000 hours.In January, $186,000 of overhead costs are incurred and 22,000 machine hours are used. For the remainder of the year, $1,940,000 of additional overhead costs are incurred and 214,000 additional machine hours are worked.

Compute the manufacturing overhead rate for the year. Manufacturing overhead rate$9 per machine hour ($1,800,000 ÷ 200,000) What is the amount of over- or underapplied overhead at January 31? Overapplied overhead$12000 Incurred$186,000 Applied ($9 × 22,000)198,000 Overapplied overhead$12,000 What is the amount of over- or underapplied overhead at December 31? Underapplied overhead$ 2000 Incurred ($186,000 + $1,940,000)$2,126,000 Applied ($9 × 236,000)2,124,000 Underapplied overhead$2,000

Fancy Decorating uses a job order costing system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year. Budgeted overhead$880,000Actual overhead$910,000Budgeted decorator hours40,000Actual decorator hours41,000 The company uses Operating Overhead in place of Manufacturing Overhead.

Compute the predetermined overhead rate. Predetermined overhead rate$ 22 per decorator hour WIP Inventory D: 902000 Operating OH C: 902000 Determine whether the overhead was under - or overapplied and by how much. Balances$ 8000 underapplied

Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows: Actual manufacturing overhead$80,000Estimated manufacturing overhead$75,000Direct labor hours incurred4,800Direct labor hours estimated5,000

Compute the predetermined overhead rate. Predetermined overhead rate$15 per direct labor hour Calculate the amount of applied manufacturing overhead. Applied manufacturing overhead$72000 4,800 × $15 = $72,000

Which of the following is not a facility-level activity?

Engineering changes

Which of the following is a batch-level activity?

Equipment setups

During January, its first month of operations, Dieker Company accumulated the following manufacturing costs: raw materials $5,400 on account, factory labor $6,700 of which $5,900 relates to factory wages payable and $800 relates to payroll taxes payable, and factory utilities payable $2,100.

January 31 raw materials inventory debit: 5400 accounts payable credit:5400 January 31 factory labor costs debit:6700 Factory wages payable credit:5900 employer payroll taxes payable credit:8000 31 MOH debit:2100 utilities payable credit: 2100

During 2019, Arb Company incurred the following direct labor costs: January $20,000 and February $30,000. Arb uses a predetermined overhead rate of 120% of direct labor cost. Estimated overhead for the 2 months, respectively, totaled $19,500 and $35,700. Actual overhead for the 2 months, respectively, totaled $25,000 and $33,500. Determine if overhead is over- or underapplied for each of the two months and the respective amounts.

January$24000 February$36000 January$1000 underapplied February$ 2500 overapplied

Which of the following is not a benefit of activity-based costing?

Less costly to use

Which would be an appropriate cost driver for the machining activity cost pool?

Machine hours

Which of the following is not a product-level activity?

Material handling

Which of the following would be accounted for using a job order cost system?

The construction of a new campus building.

When manufacturing overhead costs are assigned to production in a process cost system, they are debited to

a Work in Process account.

Budget reports should be prepared

as frequently as needed.

The last step in activity-based costing is to

assign overhead costs to products, using overhead rates determined for each cost pool.

A process cost system would most likely be used by a company that makes

breakfast cereal.

Waterway Company assigns overhead based on machine hours. The Milling Department logs 2410 machine hours and Cutting Department shows 3930 machine hours for the period. If the overhead rate is $7 per machine hour, the entry to assign overhead will show a

credit to Manufacturing Overhead for $44380. (2410 hours x $7) + (3930 hours x $7) = $44380[(Milling hours x Overhead rate) + (Cutting hours x Overhead rate) = Total overhead assigned]

The balanced scorecard evaluates company performance using: View the Video

financial, customer, internal process, and learning & growth perspectives.

If costs are not responsive to changes in activity level, then these costs can be best described as

fixed

The following information is available for Marks Company at December 31, 2019: 1.Inventory balanceBeginning of YearEnd of YearFinished Goods$14,000$10,000Work in Process6,00012,000Raw Materials10,3006,500 2.Debit postings to Work in Process Inventory during the year were:Direct materials$90,000Direct labor60,000Manufacturing overhead applied75,0003.Sales totaled $310,000 for the year.

in camera

The balanced scorecard approach: View the Video

incorporates financial and nonfinancial measures.

When the new CEO of United Airlines instituted the balance scorecard system to improve performance of the airline, his primary focus was on

internal processes and customers.

Given below is an excerpt from a management performance report: BudgetActualDifferenceContribution margin$500000$490000$10000 UControllable fixed costs$100000$120000$20000 U The manager's overall performance

is 8% below expectations. ($370000 - $400000) / $400000 = 8% below expectations ((Actual: Contribution Margin - Actual: Controllable Fixed Costs) - (Budget: Contribution Margin - Budget: Controllable Fixed Costs)) / (Budget: Contribution Margin - Budget: Controllable Fixed Costs)) = Overall performance %)

On the basis of the budget reports,

management analyzes differences between actual and planned results. management may take corrective action. management may modify the future plans.

In March, Stinson Company completes Jobs 10 and 11. Job 10 cost $29,900 and Job 11 $40,300. On March 31, Job 10 is sold to the customer for $40,300 in cash.Journalize the entries for the completion of the two jobs and the sale of Job 10.

mar 31 finished goods inventory debit: 70200 WIP Inventory credit:70200 mar 31 cash debit: 40300 sales revenue credit: 40300 mar 31 COGS debit: 29900 finished goods inventory credit: 29900

The primary benefit of ABC is it provides

more accurate product costing.

A process cost system would be used for all of the following products except

motion pictures.

Use of activity-based costing will result in the development of

multiple activity-based overhead rates.

Equivalent units are calculated by

multiplying the percentage of work done by the physical units.

Activity-based costing uses

numerous cost pools and numerous cost drivers.

The two basic types of cost accounting systems are

process cost and batch systems.

A process cost accounting system is most appropriate when

similar products are mass-produced.

A major element in budgetary control is

the comparison of actual results with planned objectives.

A distinguishing characteristic of an investment center is that

the profitability of the center is related to the funds invested in the center.