Cost Management - Exam 3 (Ch. 6, 7-2, 9 & 4)
Russet Company has one service dept (Engineering) and two line depts. Budgeted costs and activity for the three depts, Engineering, Cutting, and Assembly, are shown below. The cost driver in Engineering is number of employees. Cost drivers in the Cutting and Assembly depts are machine-hours (MH). Using the direct method, the overhead rate in the Assembly dept is closest to Eng. cutting assemdirectly traced (000s) $340 $600 $900 employees 30 150 200MH (000s) -- 40 60
$17.52
Overland, Inc., uses the weighted-average method in its process costing system. The company's work in process inventory on April 30 consists of 25,000 units. The units in the ending inventory are 100.0% complete in materials and 75.0% complete in conversion. If the cost per equivalent unit is $3.00 for materials and $5.50 for conversion costs, the total cost in the April 30 work in process inventory is
$178,125.
Rose company used 2,500 hours of direct labor. It had budgeted 4,000 hours of direct labor. Hours of direct labor is the overhead cost driver. Variable overhead consists of two items. Indirect labor was budgeted as $3.00 per hour of direct labor. Indirect materials was budgeted as $2.00 per hour of direct labor. Actual variable overhead was $15,000. What is Rose's variable overhead spending variance?
$2,500 U
King Manufacturing operates with two support depts (A, B) and two production depts (C, D). Support Dep A costs are assigned with service hours as the cost driver, and Support Dept B costs are assigned with number of employees as the cost driver. The cost driver in Depts C and D is direct labor hours. One of the products the company produces requires 4 direct labor hours per unit in Dept C and 5 direct labor hours in Dept D. Prime cost for the product cost $45.00 per unit. What is the total cost of the product? Plan costsA$20,000B$50,000C$90,000D$120,000Service hours2,0002,4004,00012,000Number of employees20306040Direct labor hours--10,0006,400
$216.10
Provenzano Corp manufactures two products: Product B56Z and Product D32N. The company is considering implementing an activity-based costing (ABC) system that assigns its manufacturing overhead to four cost pools. The following additional information is available for the company and for Products B56Z and D32N.132). What is the activity rate for the Machining cost pool? Cost pool Cost driver Total Cost Total ActivityMachining Machine-hours $330,000 15,000 MHMachine setups Number of setups 50,000 100 setupsProduct design Number of products 88,000 2 productsOrder size Direct labor-hours 280,000 10,000 DLH Cost driver B56Z D32NMachine-hours 6,000 9,000Number of setups 80 20Number of products 1 1Direct labor-hours 6,000 4,000
$22.00
Deluxe Company has two service depts whose directly traced costs are $15,000 and $25,000, respectively, and two line depts whose directly traced costs are $200,000 and $150,000, respectively. The combined plan costs of the line depts after assigning the service depts are
$390,000.
During March, the production Dept of a process operations system completed and transferred to finished goods 135,000 units and 25,000 units were in process at the beginning of March. March's beginning inventory units were 100.0% complete with respect to materials and 55.0% complete with respect to labor. At the end of March, 30,000 units were in process in the production Dept and were 100.0% complete with respect to materials and 30.0% complete with respect to labor. The production Dept incurred direct labor cost of $578,900 and its beginning inventory included labor cost of $54,700. Compute the direct labor cost per equivalent unit for the Dept using the weighted-average method.
$4.40.
Buchanan Manufacturing uses an activity-based cost system. Information relating to the company's only two products, Model A and Model D, respectively, is below. Followed by plan costs for the company's three cost pools. Using the best cost driver, what is the pool rate for the Engineering cost pool? Units produced 20,000 40,000Machine hours 8,000 10,000Direct labor hours 14,000 16,000Engineering hours 1,000 1,400Setups 40 60 Plan costEngineering $96,000Setups 200,000Machine-related 288,000
$40.00
A company has established 5 pounds of Material J at $2.00 per pound as the standard for the material in its Product Z. The company has just produced 1,000 units of Z, using 5,200 pounds that cost $9,880. The direct materials quantity variance is
$400 U.
Using more highly-skilled workers might affect which of the following variances? 1. direct materials usage variance2. direct labor efficiency variance3. overhead efficiency variance
1, 2, and 3
Which of the following would be the least useful combination of service department costs with the cost driver?
Purchasing Department costs based on machine hours
If a company produces fewer units than expected, there will be
an unfavorable volume variance
Allen Company uses a weighted average process costing system with the following information for October. The overhead rate is 200.0% of direct labor cost. The journal entry to record goods completed and transferred out of the Assembly Department would include a Materials purchased $40,000 Materials used 44,000 Direct labor 30,000 Actual overhead 56,000 Transferred out 120,000
debit to Finished Goods Inventory for $120,000.
The variance that provides the least information about cost control is the
fixed overhead volume variance
The traditional labor efficiency variance motivates managers to
ignore quality concerns by minimizing the time spent in production.
Columbia Corp adds all materials at the beginning of production. The company completed 50,000 units during the year and had 15,000 units in process at December 31, 30.0% complete with respect to conversion cost. Equivalent units for the year total
materials, 65,000; conversion, 54,500.
When using dual-rate cost assignment, fixed cost is assigned at period end based on
plan usage
The variance that provides information about overhead cost control and price changes is the
variable overhead spending variance
Fortensky Construction planned to produce 275,000 units using 34,375 machine hours. Actual output was 290,000 units using 37,425 machine hours. Fortensky's volume variance
was favorable
Which of the following is not a unit level activity?
Equipment setups
A company uses a process costing system. Its Assembly Dept's beginning inventory consisted of 30,000 units, 75.0% complete with respect to direct labor and overhead. The Dept completed and transferred out 127,500 units this period. The ending inventory consists of 20,000 units that are 25.0% complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. Total cost in BWIP and incurred during the period totalled direct labor of $24,000 and overhead of $32,000. Assuming the weighted average method, the direct labor cost per equivalent unit is
$0.18.
Direct materials is the only cost directly traced to products at Tinnon Industries. The cost driver in the Power Dept, a support dept of Tinnon is Kwh. The Power Dept planned $15,750 in fixed cost and $4,550 in variable cost to support a plan of 35,000 Kwh. Actual fixed cost in the Power Dept was $16,000 and actual variable cost was $4,254. The cost driver in Production Dept A was machine hours and Dept A planned to use 21,000 Kwh and 14,000 machine hours. By period end, Dept A used 20,000 Kwh and 18,000 machine hours. Directly traced plan and actual cost in Dept A is shown below. Direct material in production order #0015 was $63.00. The order was produced in Dept A and 11 machine hours was used. What was the cost of the order? personnel $21,000 $19,500factory supplies 2,400 2,650factory deprec. 19,000 15,000
$105.88
At Copley Inc. all materials are added at the beginning of the process. The company finished 40,000 units during the period and had 15,000 units in process at year-end, the latter at the 40.0% stage of completion. Total material costs in BWIP and cost added totaled $220,000; conversion costs in BWIP and cost added were $414,000. The cost of the ending work in process is
$114,000.
Zipp Company manufactures two products (X and Y). The overhead costs have been divided into three cost pools that use the following cost drivers. What is the overhead cost to be assigned to product X using machine hours (MH) as the cost driver? Setups MH Ordersproduct X 10 500 75product Y 10 2,000 175Cost per pool $9,000 $60,000 $15,000
$12,000
Hassock Corp. produces woven wall hangings. It takes 2.0 DLH to produce a single wall hanging. Hassock's standard labor cost is $12.00 per hour. During August, Hassock produced 10,000 units and used 21,040 DLH at a total cost of $250,376. What is Hassock's labor efficiency variance for August?
$12,480 U.
Which is a cause for favorable materials quantity variances?
Using higher quality materials than required in the standard.
Alex Company recently completed 10,600 units using 32,000 labor hours at a cost of $480,000. Each unit required 3.0 standard hours of labor at $15.40 per hour. Alex's labor rate variance and labor efficiency variance, respectively, was
$12,800F $3,080U
Fornay Comp operates with two support depts (Personnel and Maintenance) and two line depts (Fabrication and Assembly). The cost driver for personnel is headcount, and the cost driver for maintenance is machine hours (MH). The cost driver in Fabrication and Assembly is direct labor hours (DLH). What is the overhead rate for Assembly? Pers Maint Fab Assemdirectly traced (000s) $22 $60 $240 $130DLH 0 0 7,000 11,000MH 0 0 9,500 8,450Headcount 4 5 11 28
$15.82
The cost driver for overhead at Pollitt Potato Packers is direct labor hours. The following costs appear in the budget at the 200,000 hour level of activity. At an activity level of 180,000 direct labor hours, the flexible budget would show budgeted fixed overhead of Variable overheadPacking supplies $120,000Indirect labor 180,000 Fixed overhead Utilities $100,000Insurance 40,000Rent 20,000
$160,000
Dean Manufacturing Company has two support depts, Maintenance and Personnel, and two line depts, X and Y. The Maintenance Dept plan costs is $90,000 assigned with standard service as the cost driver. The Personnel Dept costs are $13,500 assigned with number of employees as the cost driver. The directly-traced costs of X and Y are $27,000 and $45,000, respectively, and the cost driver is direct labor hours. What is the overhead rate for Y? Maint Pers X Yservice hours used 200 150 1,200 600employees 25 50 75 75DLH 1,000 500
$163.50
HiTech Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities, and cost drivers. Each activity, its budgeted cost, and cost driver is in the table below. Gollowed by a table showing information for the three product lines. What is the per-unit cost of Economy? Activity Cost Cost DriverMaterial handling $225,000 Number of partsMaterial insertion 2,475,000 Number of partsAutomated machinery 840,000 Machine hoursFinishing 170,000 Direct labor hoursPackaging 170,000 Orders shippedTotal $3,880,000 Economy Standard DeluxeUnits 10,000 5,000 2,000Orders 1,000 500 200Parts per unit 10 15 25Machine hours per unit 1 3 5Labor hours per unit 2 2 2
$164.00.
Spear Manufacturing has four categories of overhead, as below. Overhead is applied with budgeted direct labor hours as the cost driver. 20,000 direct labor hours are budgeted for next year.Maintenance $180,000Materials handling 27,000Setups 24,000Inspection 90,000The company has been asked to submit a bid for a proposed job. Usually bids are based upon full manufacturing cost plus 15.0%. Estimates for the proposed job are as follows:Direct materials $3,000Direct labor (600 hours) $9,000Number of material moves 4Number of inspections 6Number of setups 8Number of machine hours 80 The plant manager plans to use ABC for the order with four cost pools using the cost drivers below. If material moves is the cost driver for material handling costs, what is the amount of material handling costs assigned to the proposed job?Machine hours 5,000Material moves 600Setups 200Quality inspections 1,000
$180
Century, Inc., currently uses traditional plant-wide costing, applying $400,000 of overhead to products X and Y with direct labor hours as the cost driver. The firm is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (pool 1), production setups (pool 2), and number of parts components (pool 3) as cost drivers. The cost pools and the cost drivers used to produce X and Y is in the table below. The overhead assigned to product X by using activity-based costing is Product Pool 1 Pool 2 Pool 3X 600 30 1,500Y 1,400 50 1,000Pool Cost $80,000 $140,000 $180,000
$184,500.
During March, the production Dept of a process operations system completed and transferred to finished goods 135,000 units. There were 25,000 units in process at the beginning of March which were 100.0% complete with respect to materials and 55.0% complete with respect to labor. At the end of March, 30,000 units were in process and were 100.0% complete with respect to materials and 30.0% complete with respect to labor. The production Dept incurred direct materials cost of $253,000 and its beginning inventory included materials cost of $93,500. Compute the direct materials cost per equivalent unit for the Dept using the weighted-average method.
$2.10.
Oaks Company has two support dept, Maintenance dept (MD) and Personnel dept (PD), and two producing depts, P1 and P2. The MD cost driver is service hours. The PD cost driver is number of employees. The cost driver in the production depts is direct labor hours (DLH). Plan data, including service hours used by each dept, is shown below. The OHD rate in P2 using the direct method is closest to MD PD P1 P2service hours -- 50 300 150employees 10 20 90 90DLH (000s) -- -- 15 12directly traced (000s) $30 $4.5 $9 $15
$2.27
Gregory Company has identified three cost pools to assign OHD. The following plan is provided. Under ABC, what is the amount of machine maintenance costs assigned to the Mossman Job? Cost Pool TC Cost driver Activity levelSupervision of direct labor $326,000 Direct labor-hours 900,000Machine maintenance 132,000 Machine-hours 960,000Facility rent 217,000 Square feet 100,000 The accounting records show the Mossman Job consumed the following resources Cost driverDirect labor-hours 200Machine-hours 1,500Square feet 70
$206.25
The following information pertains to Yoder Corp. Personnel and Maintenance are service depts and Fabrication and Assembly are line depts. The cost driver Personnel is the number of employees and the cost driver in Maintenance is machine hours. The cost driver in Fabrication and Assembly is direct labor hours. What is the overhead rate for Assembly? PersMaintFabAssemDirectly traced$80,000$144,000$280,000$320,000Direct labor hours----16,00020,000Machine hours----24,00016,000Number of employees162060100
$21.38
Carpenter Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing dept consisted of 600 units and materials costs of $5,200 (60.0% complete) and conversion costs of $8,500 (55.0% complete). A total of 7,800 units were started and 7,100 units were transferred to the second dept. Costs incurred during the month were materials costs of $95,000 and conversion costs of $169,200. The ending inventory was 85.0% complete in materials and 70.0% complete in conversion costs. Total cost transferred from the first processing dept to the next processing dept during the month is closest to
$244,219
Nather Comp has two support depts, Maint Dept (MD) and Personnel Dept (PD), and two production depts, A1 and A2. The MD cost driver is service hours and 2,200 hours were planned. The PD cost driver is headcount and 495 total employees was planned. The cost driver in the A1 and A2 is direct labor hours (DLH). Plan data is shown below. Direct materials is the only cost directly traced to products. Production order #000105 included $116.00 in direct material and 10 MH and 21 MH in Dept A and Dept B, respectively. Using the cost of the order is closest Directly traced cost:MD $135,000PD 20,000A1 48,000A2 67,500 Cost driver planned: MD PD A1 A2service hours -- 400 1,200 600employees 20 35 260 180DLH (000s) -- -- 20 30
$275.39
Franklin, Inc uses activity-based costing. Three cost pools are Materials handling, cost driver moves, Labor-related overhead, cost driver direct labor hours, and Setups cost driver number of setups. Plan cost in Materials handling was $160,000, Labor-related overhead $480,000, and Setups $240,000. The company produces two products, 001 and 002, information show below for 001 and 002, respectively. Labor-related overhead costs assigned to 002 are Units produced 38,000 50,000Machine-hours 15,000 17,000Direct labor-hours 16,000 24,000Materials handling (moves) 8,000 12,000Setups 10,000 14,000
$288,000.
Juniper Comp operates with two support depts (Personnel and Maintenance) and two line depts (Fabrication and Assembly). The cost driver for personnel is headcount, and the cost driver for maintenance is machine hours (MH). The cost driver in Fabrication and Assembly is direct labor hours (DLH). What is the overhead rate for Fabrication? Pers Maint Fab Assemdirectly traced (000s) $22 $60 $240 $130DLH 0 0 7,000 11,000MH 0 0 9,500 8,450Headcount 4 5 11 28
$39.71
Atlas Comp has two support depts, Maint Dept (MD) and Personnel Dept (PD), and two production depts, A1 and A2. The MD cost driver is service hours and 2,200 hours were planned. The PD cost driver is headcount and 495 total employees was planned. The cost driver in the A1 and A2 is direct labor hours (DLH). Plan data is shown below. The OHD rate in A2 using the direct method is closest to Directly traced cost:MD $135,000PD 20,000A1 48,000A2 67,500 Cost driver planned: MD PD A1 A2service hours -- 400 1,200 600employees 20 35 260 180DLH (000s) -- -- 20 30
$4.02
Jin Manufacturing operates two support depts (A, B) and two production depts (C, D). Information is shown below. The cost driver in Dept A is service hours, and the cost driver in Dept B is number of employees. The cost driver in Dept C is direct labor hours and the cost driver in Dept D is machine hours. One of the company's products requires 6 direct labor hours per unit in Dept C and 3 machine hours in Dept D. Prime cost for the product cost $180.00 per unit. What is the total cost of the product? Plan costA$40,000B$100,000C$180,000D$240,000Service hours1,0001,2002,0006,000Number of employees20306040Direct labor hours--10,0006,400Machine hours--6,00010,800
$416.10
A company identified the following partial list of activities, costs, and activity drivers expected for the next year. Two products are made, A and B. How much overhead in total will be assigned to the Product A using activity-based costing? cost pool plan cost cost driverExtrusion costs $83,600 batches madeHandling costs 8,800 orders filledPackaging costs 40,500 units made A BUnits 750,000 600,000 unitsBatches 200 750 batchesOrders 75 200
$42,500.
Trapp Company uses the weighted-average method in its process costing system. The beginning work in process inventory in its Painting Dept consisted of 3,000 units that were 70.0% complete in materials and 60.0% complete in conversion costs. The cost of the beginning work in process inventory in the dept was $10,000. During the period, 9,000 units were completed and transferred on to the next dept. The costs per equivalent unit for the period were $2.00 for material and $3.00 for conversion costs. The cost of units transferred out during the month was:
$45,000.
Westmore Company has two service depts and two line depts. Plan cost and other data relating to the four depts, Building and Grounds, Personnel, Production A, and Production B, are shown below. The cost driver in Building & Grounds is service hours. The cost driver in Personnel is number of employees. The cost driver in the production depts is direct labor-hours (DLH). Direct materials is the only cost directly traced to products. The direct method is used. Production order #0051 included $180.00 in direct material and 12 MH and 16 MH in Depts A and B, respectively. Using the cost of the order is closest to B&G Pers A Bcost (000s) $54 $200 $650 $800 service hours 1,000 3,000 11,000 12,800 employees 10 5 45 55 DLH 0 0 76,000 92,000
$464.09
Materials costs of $1,200,000 and conversion costs of $1,530,000 were charged to a processing dept in Sept. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. There were no units in beginning WIP, 20,000 units were started into production in Sept and there were 5,000 units in ending WIP that were 40.0% complete at the end of Sept. What was manufacturing costs assigned to the 5,000 units in ending WIP?
$480,000
A company uses the following standard costs to produce a single unit of output. The company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400. Based on this information, the direct materials price variance for the month was Direct materials 6 pounds at $0.90 per poundDirect labor 0.5 hour at $12.00 per hourOHD 0.5 hour at $4.80 per hour
$5,800 U
The Litton Company has established standards as follows. The company applies variable manufacturing overhead to products on the basis of direct labor hours. The efficiency variance is standardDirect material 3 lbs. @ $4/lb, $12.00 per unitDirect labor 2 hrs. @ $8/hr, $16.00 per unitVOHD 2 hrs. @ $5/hr., $10.00 per unit ActualUnits 600Direct material used 2,000 lbs.Direct material purchased (3,000 lbs.) $11,400Direct labor cost (1,100 hrs.) $ 9,240VOHD incurred $ 5,720
$500 F
At Copley all materials are added at the beginning of the process. The company finished 40,000 units during the period and had 15,000 units in process at year-end, the latter at the 40.0% stage of completion. Total costs in BWIP and added during the period totaled material costs of $220,000; conversion costs of $414,000. The cost of goods completed is
$520,000.
The following information is available for July for Burns Corporation. During July, Burns produced 1,900 units. What is the material price variance? StandardMaterial: 3 pounds per unit at $6.20 per poundLabor: 2 direct labor hours per unit at $9.00 per hour ActualMaterial: purchased and used 5,260 pounds at $6.10 per poundLabor: 4,200 direct labor hours at $9.10 per hour
$526 F
The Gasson Co uses the weighted-average method in its process costing system. Ending WIP was 10,000 units, 100.0% complete in materials and 70.0% in conversion. If the costs per equivalent unit are $4.50 for the materials and $2.00 for labor and overhead, the balance of the ending work in process inventory account would be:
$59,000
Reynolds Manufacturing Company has planned a volume of 10,000 units. Standard is 1.0 direct labor hour per unit. Overhead rates per direct labor hour are fixed $6.00 and variable $10.00. 9,000 units were produced and overhead costs incurred (includes $70,000 fixed) were $156,000. Actual direct labor hours totaled 9,000. What is the volume variance?
$6,000 U
Teecorp Co provides the following ABC costing information. How much of invoice cost will be assigned to product B? Activities Total Costs Cost driversLabor $320,000 8,000 hoursGas 36,000 6,000 gallonsInvoices 40,000 2,500 invoices The above activities used by their three productsA B CLabor 2,500 1,200 4,300Gas 1,700 800 3,500Invoices 1,600 400 500
$6,400
Use the following information. If output was 3,200 units, what is the materials quantity variance? StandardDM quantity 1.7 metersDM price $19.80 per meterActual materials purchased 5,800 meters materials used 5,100 meters cost of materials purchased $113,680
$6,732 F
Logistics is the only support dept at Bradnet Comp. Two production depts are Fabricating and Finishing. The cost driver in Logistics is number of material moves (MMs). Cost drivers in the Fabricating and Finishing depts are direct labor hours (DLH). Production order #015 included $310.00 in direct material and 17 DLH and 14 DLH in Fabricating and Finishing, respectively. Direct materials is the only cost directly traced to products. Plan cost and activity for the three depts is below. The cost of the order is closest to Log. Fab. Fin.cost (000s) $140 $345 $440MMs 0 350 420DLH (000s) 0 40 60
$604.16
Jacomo Company as two products: F and G. The annual production and sales of Product F is 10,000 units and of Product G is 4,000 units. There are three overhead pools, 1-3, with plan costs and activity as follows. What is the cost for pool 1 assigned to Product G? cost poolplan overheadplan activityFG1$18,0003002002$16,0005001003$27,000600300
$7,200
For Zane Company the variable overhead rate was $3.00 and the fixed rate was $2.00. Plan overhead was $150,000 and the plan cost driver was 30,000 direct labor hours. Actual overhead for June was $8,900 variable and $5,400 fixed, and 1,500 units were produced. The direct labor standard is 2.0 hours per unit. The total overhead variance is
$700 F.
Mundes Corporation uses the weighted-average method in its process costing system. The beginning WIP in its Painting Dept consisted of 2,000 units that were 60.0% complete in materials and 40.0% complete in conversion costs. The cost of the beginning WIP in the dept was recorded as $8,800. During the period, 8,000 units were completed and transferred on to the next dept. The costs per equivalent unit for the period were $4.00 for material and $5.00 for conversion costs. The cost of units transferred out during the month was
$72,000
Torello Corp manufactures two products: Product H95V and Product V93N. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) using four cost pools. The following additional information is available for the company and for Products H95V and V93N. What is the company's plantwide overhead rate? Cost pool Cost driver Total Cost Total Cost driverMachining Machine-hours $242,000 11,000 MHMachine setups Number of setups $140,000 350 setupsProduct design Number of products $70,000 2 productsOrder size Direct labor-hours $270,000 10,000 DLH Cost driver Product H95V Product V93NMachine-hours 6,000 5,000Number of setups 250 100Number of products 1 1Direct labor-hours 6,000 4,000
$72.20
If a support department's fixed costs were budgeted at $75,000 and actual fixed costs incurred by the support department were $70,000, the total fixed cost that should be assigned to other departments for performance evaluation (end of period) using dual-rate cost assignment is
$75,000
Buchanan Manufacturing uses an activity-based cost system. Information relating to the company's only two products, Model A and Model D, respectively, is below. Followed by plan costs for the company's three cost pools. What is Setups cost assigned to Model A? Units produced 20,000 40,000Machine hours 8,000 10,000Direct labor hours 14,000 16,000Engineering hours 1,000 1,400Setups 40 60 Plan costEngineering $96,000Setups 200,000Machine-related 288,000
$80,000
Lanjan Corporation uses the weighted-average method in its process costing system. Operating data for the first processing dept for June appear below. Conversion cost in beginning WIP was $92,218. Additional conversion costs of $571,618 were incurred during the month. What was the cost per equivalent unit for conversion costs for the month? Begin WIP-units 14,000 50.0% completeStarted 76,000End WIP-units 20,000 10.0% complete
$9.220
Eastland Company has two service depts and two production depts. Building and Grounds (B&G) and Personnel are service depts. The cost driver in B&G is service hours. The cost driver in Personnel is number of employees. The cost driver in the production depts is direct labor-hours (DLH). The direct method is used. The overhead rate in Dept B is closest to B&G Pers A Bdirectly traced (000s) $44 $80 $425 $780 service hours 1,200 2,200 16,000 24,000 employees 10 5 45 55 DLH (000s) 0 0 76 92
$9.24
Jacomo Company has two products: F and G. The annual production and sales of Product F is 10,000 units and of Product G is 4,000 units. There are three overhead cost pools, with plan overhead costs and activity as follows. What is the overhead cost per unit of Product F? cost poolplan overheadplan activityProduct FProduct GTotalActivity 1$25,000150100250Activity 2$65,0008002001,000Activity 3$90,0001,0002,0003,000
$9.70
The Richmond Corporation uses the weighted-average method in its process costing system. The company has only a single processing dept. The company's ending WIP consisted of 18,000 units. The units in the ending WIP were 100.0% complete in materials and 60.0% complete in labor and overhead. If the cost per equivalent unit for August was $2.75 for materials and $4.25 for labor and overhead, the total cost assigned to the ending WIP was
$95,400
Dobles Corp has provided the following data from its activity-based costing system. The company makes 420 units of product D28K a year, requiring a total of 460 machine-hours, 80 orders, and 10 inspection-hours per year. The product's direct materials cost is $48.96 per unit and its direct labor cost is $25.36 per unit. Using activity-based costing, the cost of product D28K is closest to Cost pool Total Cost Total ActivityAssembly $228,060 18,000 machine-hoursProcessing orders $34,068 1,200 ordersInspection $125,560 1,720 inspection hours
$95.34
Manilla Corporation experienced a favorable materials usage variance when it used 8,000 square feet of materials instead of the standard of 8,200 square feet for the 600 units produced. The actual cost of the materials was $5.00/sq.ft. but the standard cost is $6.00/sq.ft. The journal entry to record the use of the materials was 1.Work in Process 49,200Materials Usage Variance 1,200Material inventory 48,0002.Work in Process 41,000Materials Usage Variance 1,000Material inventory 40,0003.Work in Process 48,000Materials Usage Variance 1,200Material inventory 49,2004.Work in Process 40,000Materials Usage Variance 1,000Material inventory 41,000
1
Hampton Textile Co., manufactures a variety of fabrics. All materials are introduced at the beginning of production. The Weaving Dept had 2,000 units of work in process on April 1 that were 30.0% complete as to conversion costs. During April, 9,000 units were completed and on April 30, 4,000 units remained in production, 40.0% complete with respect to conversion costs. The equivalent units of direct materials total
13,000.
Stefan Ceramics is in the business of selling ceramic vases. It has two departments - molding and finishing. Molding department purchases tungsten carbide and produces ceramic vases out of it. Ceramic Vases are then transferred to finishing department, which designs it for customers. During July, molding department purchased 500 kgs of tungsten carbide at $60.0 per kg. It started manufacture of 4,000 vases and completed and transferred 3,200 vases during the month. It has 800 vases in the process at the end of the month. It incurred direct labor charges of $1,000 and other manufacturing costs of $500.00, which included electricity costs of $200.00. Stefan had no inventory of tungsten carbide at the end of the month. It also had no beginning inventory of vases. The ending inventory was 50.00% complete in respect of conversion costs. The journal entry to record tungsten carbide purchased and used in production during July is 1. WIP Molding 2,400Accounts Payable 2,400 2. WIP Molding 3,000 Accounts Payable 3,000 3. Accounts Payable 2,400WIP Molding 2,400 4. Accounts Payable 3,000WIP Molding 3,000
2
Ely Company had the following data. Materials are added at the beginning of the process. Beginning work in process was 40.0% complete as to conversion. Ending work in process was 70.0% complete as to conversion. What is the number of units completed and transferred out during the period?units in BWIP 4,000 units in EWIP 10,000 Started 40,000
34,000 units
The Assembly Dept started the month with 35,000 units in its beginning work in process inventory. An additional units 472,000 were transferred in from the prior dept during the month to begin processing in the Assembly Dept. There were 34,000 units in the ending work in process inventory of the Assembly Dept. How many units were transferred to the next processing dept during the month?
473,000
At the beginning of the recent period, there were 900 units in a department, 35.0% complete in conversion. These units were finished and an additional 5,000 units were started and completed during the period. 800 units were still in process at the end of the period, 25.0% complete in conversion. Using the weighted average method, the equivalent units of conversion were
6,100 units.
Janner Corporation uses the weighted-average method in its process costing system. Operating data showing units and percent complete in conversion for the Painting Dept for April appear below. What were the equivalent units for conversion costs in the Painting Dept for April? Begin WIP 4,000 50.0%Transferred in 90,400End WIP 1,600 60.0%
93,760
Which of the following statements is true of activity-based costing?
ABC is more suited to companies with diverse product lines than companies with a single product line
Aqua Company produces two products, Alpha and Beta. Alpha is a high volume product and produced in bulk. Production of Beta is more limited because it's custom designed. Also, Beta's cost is shared between design and setup costs, while most of Alpha's costs are direct costs. Alpha is using a plant wide OHD rate. Which of the following statements is true?
Aqua will overcost Alpha
Which of the following costs should not be included in product costs for responsibility accounting reports used for decision-making?
Costs of facility level activities.
Yamada Company applies factory overhead to its production departments on the basis of 90.0% of direct labor costs. In the Assembly Department, Yamada had $125,000 of direct labor cost, and in the Finishing Department, Yamada had $35,000 of direct labor cost. The entry to apply overhead to these production departments is
Debit Work in Process Inventory—Assembly $112,500; debit Work in Process Inventory—Finishing $31,500; credit Factory Overhead $144,000.
Assume that a pet food manufacturer is considering adding two types of pet food to its existing product line. Research had determined that good demand exists for dog food in 40-pound bags and cat food in 0.5 pound cans. The company identified the following partial list of activities, costs, and activity drivers expected for the next year. How much overhead cost will be assigned to each product line using activity-based costing (ABC)? cost pool plan costs cost driverMaterial handling $105,000 Number of batchesStorage costs $820,000 Weight of finished product Dog Food Cat FoodProduction volume 100,000 units 200,000 unitsBatches made 200 batches 150 batches
Dog food: $860,000; cat food: $65,000.
Which of the following is not a benefit of activity-based costing?
Less costly to use
Which of these is not a likely cause for a favorable materials price variance?
Purchasing higher quality materials than required
Which of the following expenses incurred by a department store is most likely to be a direct cost for the Shoe Department?
Shoe Department salesperson's commissions
A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table. Which of the following statements is true about the company's activity rates? Plan cost driver usedCost Pool Plan Cost A B CActivity 1 $70,000 6,000 9,000 20,000 Activity 2 45,000 7,000 15,000 8,000 Activity 3 82,000 2,500 1,000 1,625
The activity rate under the activity-based costing system for Activity 2 is $1.50.
Which of the following statements is false?
The volume variance is favorable if standard hours allowed for output is greater than the standard hours at plan The volume variance relates solely to fixed costs The volume variance indicates whether planned output was produced none of these are false
Hamilton, which uses a process-costing system, had a balance in its Work-in-Process account of $68,000 on January 1. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Hamilton should make a journal entry on December 31 that includes
a credit to Work-in-Process Inventory for $432,000.
The following information for direct materials for the month of July. The company reports its material price variances at the time of purchase. the entry to record material purchases contains Standard price per lb $18.00Actual purchase price per lb $16.50Quantity purchased 3,100 lbs.Quantity issued 2,950 lbs.Standard quantity allowed 3,000 lbs.Actual output 1,000 units
a credit to the materials price variance
Direct costs
are costs that can be assigned to a cost object with a cause and effect cost driver.
Facility-level costs
are not direct cost for any individual products or services but support the organization as a whole
A support department's costs were budgeted at $150,000 and actual costs incurred by the support department were $200,000. What is the total amount of the support department's costs assigned to other departments for performance evaluation (end of period) using dual-rate cost assignment?
can't tell from the information given
