Your Company is a manufacturing facility that produces highendboots. The actual manufacturing overhead cost for the previous yearwas $750,000 and the total direct labor hours incurred were 40,000hours. The estimated manufacturing overhead cost for the currentyear are $780,000 and the estimated direct labor hours are 39,000.Overhead is applied using direct labor hours as the activity.
Salaries and wages are run on a single payroll. Of the total 70% isdirect labor, 20% are period costs and 15% are indirectlabor.
15% of the materials used in production are classiied as indirectmaterials. The wage rate is $25 per direct labor hour. over orunderapplied overhead is closed to cost of goods sold. Below is alist of costs and other information related to the currentyear:
a. building and equipment depreciation - 100%manufacturing
180,000
b. raw material inventory 1-1-2015
250,000
c. raw material purchases
1,000,000
d. raw material inventory 12-31-15
50,000
e. delivery costs - inished goods
10,000
f. inished good inventory 1-1-15
220,000
g. inished goods inventory 12-31-15
225,000
h. insurance costs; 80% production the balance period costs
60,000
i. property taxes ; 80% production the balance period costs
40,000
j. maintenance costs; all production
35,000
k. utilities; 90% production the balance period costs
100,000
l. interest expense - period cost
20,000
m. salaries and wages
1,400,000
n. other manufacturing costs
80,000
o. work-in-process inventory 1-1-15
70,000
p. work-in-proces inventory 12-31-15
75,000
q. sales revenue
3,500,000
r. sales commissions 2% of sales dollars s. legal fees all periodcost
25,000
5. compute the prime costs
6. compute the conversion costs.
7. if 40% of the manufacturing overhead costs are variable whatis the total variable costs?
8. if 75,000 units were produced what was the cost per unit?What was the variable cost per unit? the fixed cost perunit?
9. if 100,000 units were produced what would be the fixed costper unit?
Your Company is a manufacturing facility that produces highendboots. The actual manufacturing overhead cost for the previous yearwas $750,000 and the total direct labor hours incurred were 40,000hours. The estimated manufacturing overhead cost for the currentyear are $780,000 and the estimated direct labor hours are 39,000.Overhead is applied using direct labor hours as the activity.
Salaries and wages are run on a single payroll. Of the total 70% isdirect labor, 20% are period costs and 15% are indirectlabor.
15% of the materials used in production are classiied as indirectmaterials. The wage rate is $25 per direct labor hour. over orunderapplied overhead is closed to cost of goods sold. Below is alist of costs and other information related to the currentyear:
a. building and equipment depreciation - 100%manufacturing
180,000
b. raw material inventory 1-1-2015
250,000
c. raw material purchases
1,000,000
d. raw material inventory 12-31-15
50,000
e. delivery costs - inished goods
10,000
f. inished good inventory 1-1-15
220,000
g. inished goods inventory 12-31-15
225,000
h. insurance costs; 80% production the balance period costs
60,000
i. property taxes ; 80% production the balance period costs
40,000
j. maintenance costs; all production
35,000
k. utilities; 90% production the balance period costs
100,000
l. interest expense - period cost
20,000
m. salaries and wages
1,400,000
n. other manufacturing costs
80,000
o. work-in-process inventory 1-1-15
70,000
p. work-in-proces inventory 12-31-15
75,000
q. sales revenue
3,500,000
r. sales commissions 2% of sales dollars s. legal fees all periodcost
25,000
5. compute the prime costs
6. compute the conversion costs.
7. if 40% of the manufacturing overhead costs are variable whatis the total variable costs?
8. if 75,000 units were produced what was the cost per unit?What was the variable cost per unit? the fixed cost perunit?
9. if 100,000 units were produced what would be the fixed costper unit?
Related questions
1. ABC generally causes the least amount of cost distortionamong products because indirect costs are allocated to the productsbased on
| types of activities used by theproduct. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| the extent to which the activitiesare used. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| both A and B. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| none of the above. 2. Chicago Steel's operating activities for the year are listedbelow:
What is the cost of goods sold for the year?
|
1.) When products held in inventory are sold:
A.)Cost of Goods Sold is credited.
B.)Work in Process Inventory is credited.
C.)Finished Goods Inventory is credited.
D.)Finished Goods Inventory is debited.
2.)Since manufacturing costs (direct materials, direct labor,and overhead) are incurred in the process of manufacturing units ofproduct, these costs are credited t
| A.) | The Direct Materials Inventory, Direct Labor, and ManufacturingOverhead accounts respectively. |
| B.) | Liability accounts. |
| C.) | The Work in Process Inventory account. |
| D.) | The Cost of Goods Sold account. |
3.)Management accounting systems are designed to assistorganizations in the performance of all of the following functionsexcept:
| A.) | The assignment of decision-making authority over companyassets. |
| B.) | Planning and decision-making. |
| C.) | Monitoring, evaluating, and rewarding performance. |
| D.) | The preparation of income tax returns. |
4.)In a schedule of cost of finished goods manufactured, thefigure for total manufacturing costs:
| A.) May be less than the cost of direct materials used. | |
| B.) May be less than the direct labor costs assigned toproduction. | |
| C.) May be less than the manufacturing overhead applied toproduction. | |
| D.) May be less than the cost of finished goodsmanufactured. |
5.) When a manufacturing company purchases raw materials orcomponent parts to be used in manufacturing finished goods, thesecosts are initially debited to:
| A.) Expense accounts. | |
| B.) Raw Materials Inventory. | |
| C.) Finished Goods Inventory. | |
| D.) Manufacturing Overhead. |
6.) The wages paid to employees working directly on a company'sproducts would be shown as a:
| A.) Credit to Direct Labor. | |
| B.) Debit to Direct Labor. | |
| C.) Credit to Work in Process. | |
| D.) Debit to Manufacturing Overhead. |
7.) Amounts credited to the Work in Process inventory accountmay best be described as:
| A.) The cost of finished goods manufactured. | |
| B.) Total manufacturing costs charged to production. | |
| C.) The cost of goods sold. | |
| D.) Direct materials purchased, direct labor costs paid, andpayments for items classified as manufacturing overhead. |
