# Cost Accounting_ Three Questions

\$17.00

Category:

## Description

Problem 1

Mariya
Company uses a job-order costing system and applies manufacturing overhead cost
to jobs on the basis of the cost of direct materials used in production. Its
predetermined overhead rate was based on a cost formula that estimated \$221,200
of manufacturing overhead for an estimated allocation base of \$158,000 direct
material dollars. The following transactions took place during the year (all
purchases and services were acquired on account):

a. Raw materials purchased, \$145,000.

b. Raw materials requisitioned for use in
production (all direct materials), \$141,000.

c. Utility bills incurred in the factory,
\$24,000.

d. Costs for salaries and wages were
incurred as follows:

 Direct labor \$223,000 Indirect labor \$61,700 Selling and administrative salaries \$143,000

e. Maintenance costs incurred in the
factory, \$17,000.

g. Depreciation recorded for the year,
\$43,000 (70% relates to factory assets, and the remainder relates to selling

h. Rental cost incurred on buildings,
\$85,000 (80% of the space is occupied by the factory, and 20% is occupied by

i. Miscellaneous selling and

applied to jobs, \$ ?

k. Cost of goods manufactured for the
year, \$555,000.

l. Sales for the year (all on account)
totaled \$1,100,000. These goods cost \$530,000 according to their job cost
sheets.

The
balances in the inventory accounts at the beginning of the year were as
follows:

 Raw materials \$23,000 Work in process \$24,000 Finished Goods \$34,000

Required:

a. Using the above
data, prepare the following eight journal entries:

1. To record the purchase of raw materials

2. To
transfer cost of raw materials to production, record direct labor costs, and
apply overhead to work in process inventory

3. To
transfer cost of completed units to finished goods inventoryj

4. To
record sales

5. To
transfer cost of finished goods to cost of goods sold

6. To

7. To
transfer over- or underapplied overhead to cost of goods sold

8. To

As these are summary journal entries
for an entire accounting period, no dates are given. Use the number of the journal entry in place
of a date on the general journal page.
All of the information needed to correctly record the entries is
provided. However, you may find it
useful to prepare t-accounts on scratch paper to help you determine the correct
debits and credits for some entries.

b. Job 521 was one of the many jobs
started and completed during the year. The job required \$3,900 in direct
materials and 400 hours of direct labor time at a rate of \$14 per hour. If the
job contained 540 units and the company billed at 65% above the unit product cost
on the job cost sheet, what price per unit would have been charged to the
customer?

Problem 2

Broucek Inc.
makes baby furniture from fine hardwoods. The company uses a job-order costing

system and

predetermined
overhead rate in the Preparation Department is based on machine hours, and

the rate in the
Fabrication Department is based on direct labor-hours. At the beginning of the

year, the
companyâ€™s management prepared the following information for the year. All figures

are estimates,
except the fixed overhead and variable overhead rates, which are actual figures

from last year
and remain the same this year. In other
words, it is machine-hours and direct

labor-hours that

machine-hour and
per direct labor-hour in order to calculate rates for applying overhead.

 Department Preparation Fabrication Machine-hours 83,000 32,000 Direct labor-hours 33,000 57,000 Direct materials cost \$194,000 \$204,000 Direct labor cost \$280,000 \$521,000 Fixed manufacturing overhead cost \$207,500 \$518,700 Variable manufacturing overhead per machine-hour \$3.00 â€“ Variable manufacturing overhead per direct labor-hour â€“ \$5.00

Job 135 was
started on April 1 and completed on May 12. The company’s cost records show the
following information concerning the job:

 Department Preparation Fabrication Machine-hours 360 67 Direct labor-hours 80 133 Direct materials cost \$940 \$1,120 Direct labor cost \$690 \$970

Required:

a. Compute the
predetermined overhead rate used during the year in the Preparation Department.
Compute the rate used in the Fabrication
Department.

b. Compute the
total overhead cost applied to Job 135.

c. What would be
the total cost recorded for Job 135? If the job contained 29 units, what would
be the unit product cost?

d. At the end of the year, the records of
Broucek Inc. revealed the following actual cost and operating data for all jobs
worked on during the year:

 Department Preparation Fabrication Machine-hours 82,700 24,800 Direct labor-hours 28,000 53,000 Direct materials cost \$165,800 \$412,000 Direct labor cost \$464,550 \$711,400

What was the amount of
underapplied or overapplied overhead in each department at the end of the year?

Problem 3

 VitalVitamin is produced in a three-step process consisting of mixing, shaping, and packaging. Direct materials like tars, acids, and inert ingredients are all introduced at the beginning of the mixing cycle, at a per unit cost of \$0.30. Direct labor and factory overhead are incurred uniformly throughout each stage of production, and in equal proportion (i.e., \$1 of overhead for each \$1 of labor). Costs are very stable, and there have been no changes in per unit costs for any element of production over the past several months. Information for the Mixing Department for the month of April, 2011, follows. Beginning of April: 100,000 units in process (40% complete at a total cost of \$50,000) During April: 800,000 units put into production; additional costs into production total \$652,500 End of April: 70,000 units in process (50% complete). Required: a. Prepare a cost of production report for the Mixing Department for April. Use the weighted-average costing method. b. Prepare Aprilâ€™s journal entries that affect the Mixing Departmentâ€™s Work in Process account (two entries).

## Reviews

There are no reviews yet.