The Towson Manufacturing Corporation applies overhead on the
basis of machine hours. The following divisional information is presented for
Division A Division
Actual machine hours 22,500 ?
Estimated machine hours 20,000 ?
Overhead application rate $4.50 $5.00
Actual overhead $110,000 ?
Estimated overhead ? $90,000
Applied overhead ? $86,000
Over- (under-) applied overhead ? $6,500
FIND THE UNKNOWNS FOR EACH OF THE DIVISIONS.
using a job order system
General Corporation employs a job order cost system. On May
1 the following balances were extracted from the general ledger;
Work in process $ 35,200
Finished goods 86,900
Cost of goods sold 128,700
Work in Process consisted of two jobs, no. 101 ($20,400) and
no. 103 ($14,800). During May, direct materials requisitioned from the
storeroom amounted to $96,500, and direct labor incurred totaled $114,500.
These figures are subdivided as follows:
Job No. Amount Job No. Amount
101 $5,000 101 $7,800
115 19,500 103
116 36,200 115
Other 35,800 116
$96,500 Other 25,900
Job no. 115 was the only job in process at the end of the
month. Job no. 101 and three “other” jobs were sold during May at a
profit of 20% of cost. The “other” jobs contained material and labor
charges of $21,000 and $17,400, respectively.
General applies overhead daily at the rate of 150% of direct
labor cost as labor summaries are posted to job orders. The firm’s fiscal year
ends on May 31.
the total overhead applied to production during May.
the cost of the ending work in process inventory.
the cost of jobs completed during May.
the cost of goods sold for the year ended May 31.
The following cost data pertain to 20X6 operations of
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Shipping costs $58,200 $58,620 $60,125 $59,400
Orders shipped 120 140 175 150
The company uses the high-low method to analyze costs.
the variable cost per order shipped.
the fixed shipping costs per quarter.
present cost behavior patterns continue, determine total shipping costs for
20X7 if activity amounts to 570 orders.
and other CVP relationships
Cedars Hospital has average revenue of $180 per patient day.
Variable costs are $45 per patient day; fixed costs total $4,320,000 per year.
a. How many
patient days does the hospital need to break even?
level of revenue is needed to earn a target income of $540,000?
variable costs drop to $36 per patient day, what increase in fixed costs can be
tolerated without changing the break-even point as determined in part (a)?
and absorption costing
The information that follows pertains to Consumer Products
for the year ended December 31, 20X6.
Inventory, 1/1/X6 24,000 units
Units manufactured 80,000
Units sold 82,000
Inventory, 12/31/X6 ? units
Direct materials $3 per unit
Direct labor $5 per unit
Variable factory overhead $9 per unit
Fixed factory overhead $280,000
Selling & administrative expenses:
Variable $2 per unit
The unit selling price is $26. Assume that costs have been
stable in recent years.
the number of units in the ending inventory.
the cost of a unit assuming use of:
an income statement for the year ended December 31, 20X6, by using direct
an income statement for the year ended December 31, 20X6, by using absorption