ACCT208 Lecture Notes - Lecture 3: Deutsche Luft Hansa, Direct Labor Cost, European Cooperation In Science And Technology
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Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments--Molding and Fabrication. It started, completed, and sold only two jobs during MarchâJob P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
| Molding | Fabrication | Total | |||||||
| Estimated total machine-hours used | 2,500 | 1,500 | 4,000 | ||||||
| Estimated total fixed manufacturing overhead | $ | 15,000 | $ | 18,000 | $ | 33,000 | |||
| Estimated variable manufacturing overhead per machine-hour | $ | 3.40 | $ | 4.20 | |||||
| Job P | Job Q | |||||
| Direct materials | $ | 33,000 | $ | 18,000 | ||
| Direct labor cost | $ | 37,000 | $ | 15,500 | ||
| Actual machine-hours used: | ||||||
| Molding | 3,700 | 2,800 | ||||
| Fabrication | 2,600 | 2,900 | ||||
| Total | 6,300 | 5,700 | ||||
| Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month. Required: For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base. For questions 9-15, assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. 1. What was the companyâs plantwide predetermined overhead rate? (Round your answer to 2 decimal places.) 2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? (Do not round intermediate calculations.) 3. What was the total manufacturing cost assigned to Job P? (Do not round intermediate calculations.) 4. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.) 5. What was the total manufacturing cost assigned to Job Q? (Do not round intermediate calculations.) 6. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.) 7. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (Do not round intermediate calculations. Round your final answers to nearest whole dollar.) 8. What was Sweeten Companyâs cost of goods sold for March? (Do not round intermediate calculations.) 9. What were the companyâs predetermined overhead rates in the Molding Department and the Fabrication Department? (Round your answers to 2 decimal places.) 10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.) 11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.) 12. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations.) 13. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.) 14. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.) 15. What was Sweeten Companyâs cost of goods sold for March? (Do not round intermediate calculations.) | ||||||
Sweeten Company had no jobs in progress at the beginning ofMarch and no beginning inventories. It started only two jobs duringMarchâJob P and Job Q. Job P was completed and sold by the end ofthe March and Job Q was incomplete at the end of the March. Thecompany uses a plantwide predetermined overhead rate based ondirect labor-hours. The following additional information isavailable for the company as a whole and for Jobs P and Q (all dataand questions relate to the month of March): |
| Estimated totalfixed manufacturing overhead | $ | 11,500 |
| Estimated variable manufacturingoverhead per direct labor-hour | $ | 1.30 |
| Estimated total directlabor-hours to be worked | 2,300 | |
| Total actual manufacturingoverhead costs incurred | $ | 14,000 |
| Job P | Job Q | |||
| Direct materials | $ | 14,500 | $ | 8,300 |
| Direct labor cost | $ | 19,600 | $ | 9,100 |
| Actual direct labor-hoursworked | 1,400 | 650 | ||
2. How much manufacturing overhead was applied to Job P and JobQ? (Round your intermediate calculations to 2 decimal places.)
3.
What is the direct labor hourly wage rate
4-a.
If Job P includes 20 units, what is its unit product cost?
4-b.
What is the total amount of manufacturing cost assigned to Job Qas of the end of March (including applied overhead)?
5.
Assume the ending raw materials inventory is $1,300 and thecompany does not use any indirect materials. Prepare the journalentries to record raw materials purchases and the issuance ofdirect materials for use in production. (If no entry is requiredfor a transaction/event, select "No journal entry required" in thefirst account field.)
6.
Assume that the company does not use any indirect labor. Preparethe journal entry to record the direct labor costs added toproduction. (If no entry is required for a transaction/event,select "No journal entry required" in the first accountfield.)v
7.
Prepare the journal entry to apply manufacturing overhead coststo production. (If no entry is required for a transaction/event,select "No journal entry required" in the first account field.)
8.
Assume the ending raw materials inventory is $1,300 and thecompany does not use any indirect materials. Prepare a schedule ofcost of goods manufactured.
9.
Prepare the journal entry to transfer costs from Work in Processto Finished Goods. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.
10.
Prepare a completed Work in Process T-account including thebeginning and ending balances and all debits and credits posted tothe account.
11
Prepare a schedule of cost of goods sold
12.
Prepare the journal entry to transfer costs from Finished Goodsto Cost of Goods Sold. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.)
13.
What is the amount of underapplied or overapplied overhead?
14.
Prepare the journal entry to close the amount of underapplied oroverapplied overhead to Cost of Goods Sold. (If no entry isrequired for a transaction/event, select "No journal entryrequired" in the first account field.
15.
Assume that Job P includes 20 units that each sell for $3,500and that the companyâs selling and administrative expenses in Marchwere $20,500. Prepare an absorption costing income statement forMarch.
1.) On January 31, Village Bank had 500,000 shares of $3 parvalue common stock outstanding. On that date, the company declareda 10% stock dividend when the market price of the stock was $62 pershare. The immediate effect of this dividend upon Village Bankwas:
A.)A reduction in cash of $3,794,500. | |||||||||||||||||||||||||||||||||||||||||
B.) A reduction in retained earnings of $3,100,000. | |||||||||||||||||||||||||||||||||||||||||
C.) A reduction in retained earnings of $150,000. | |||||||||||||||||||||||||||||||||||||||||
| D.) A liability to the stockholders of $150,000. 2.) Mayfair Corporation has outstanding 70,000 shares of $1 parvalue common stock as well as 20,000 shares of 7%, $100 par valuecumulative preferred stock. At the beginning of the year, thebalance in retained earnings was $800,000, and one year's dividendswere in arrears. Net income for the current year is $580,000.Compute the balance in retained earnings at the end of the year ifMayfair Corporation pays a dividend of $3 per share on its commonstock this year.
3.) During the years 2009 through 2011, Powers, Inc., reportedthe following amounts of net income (dollars in thousands):
4.) Hines Cannery issued capital stock in 2009 for $700,000.During 2009 the company paid dividends of $250,000. What is theeffect of these events in Hines' statement of cash flows for2009?
6.) Which of the following is a characteristic of manufacturingoverhead in a job order cost system?
|
7.) A job order cost system traces direct materials cost to aparticular job by means of:
A.) | Materials requisitions. |
B.) | A production budget. |
C.) | The Materials Inventory controlling account. |
D.) | A debit to the job cost sheet for the job. |
8.) Which of the following costing systems would always use jobcost sheets?
A.) | Job order costing. |
B.) | Process costing. |
C.) | Activity-based costing. |
D.) | All three systems. |
9.) Edwards Auto Body uses a job order cost system. Overhead isapplied to jobs on the basis of direct labor hours. During thecurrent period, Job No. 337 was charged $425 in direct materials,$475 in direct labor, and $190 in overhead. If direct labor costsan average of $16 per hour, the company's overhead application rateis:
A.) | $7.27 per direct labor hour. |
B.) | $6.40 per direct labor hour. |
C.) | $17.50 per direct labor hour. |
D.) | $40 per direct labor hour. |
10.) Marty's Metal Shop uses a job order cost system. It appliesoverhead to jobs at a rate of 175% of direct labor costs. Job No.2617 required $800 in direct labor costs. The job was initiallybudgeted to require $850 in direct labor costs. Overhead applied toJob No. 2617 during the period amounted to:
A.) | $850. |
B.) | $1,400. |
C.) | $1,275. |
D.) | Some other amount. |
11.) In a job cost system, the Work-in-Process Inventorycontrolling account may be reconciled to the total of the:
A.) | Employee time cards. |
B.) | Materials requisitions. |
C.) | Work-in-Process Inventory records for each department orprocess. |
D.) | Job cost sheets. |
12.) For the month of December, its first month of operations,the Radcliffe Corporation completed and transferred 800 units ofproduct costing $80,000 to produce to Finished Goods Inventory. IfRadcliffe sold 650 units during the same month, how much was costof goods sold for the same period?
A.) | $80,000. |
B.) | $8,000. |
C.) | $6,500. |
D.) | $65,000. |
13.) The computation of equivalent full units is generally notnecessary when:
A.) | Beginning work-in-process inventories are significantly largerthan ending work-in-process inventories. |
B.) | Beginning and ending work-in-process inventories differ onlyslightly. |
C.) | The number of units in ending work-in-process exceeds the numberof units completed and transferred to finished goods during theperiod. |
D.) | Per-unit costs become distorted as a result of not computingequivalent full units of production. |
14.) During July, the equivalent full units of direct materialsadded to the product worked on by Department A amounted to a totalof 90,000 applied as follows: beginning inventory, 20,000 units;units started and completed in July, 60,000 units; and endinginventory, 10,000 units. Assuming that the cost of direct materialsrequisitioned by the department in July was $135,000; the amount ofthe materials cost to be assigned to the ending inventory wouldbe:
A.) | $16,875. |
B.) | $54,000. |
C.) | $15,000. |
D.) | $18,000. |
