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ACC 406 Study Guide - Decision Model, Capacity Utilization, Target Costing

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School
Ryerson University
Department
Accounting
Course
ACC 406
Professor
Tsogbadral Galaabaatar

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Document Summary

The way that costs are measured and recorded. (p. 31) All costs associated with research, development, and general administration of the organization that cannot reasonably be assigned to either selling or production. (p. 40) When an indirect cost is assigned to a cost object using a reasonable and convenient method. (p. 33) Assigning costs the way that a cost is linked to some cost object. (p. 31) Conversion cost the sum of direct labour cost and overhead cost. (p. 37) The amount of cash or cash equivalent sacrificed for goods and/or services that are expected to bring a current or future benefit to the organization. (p. 30) Any item such as products, customers, departments, projects, and so on, for which costs are measured and assigned. (p. 31) The total product cost of goods completed during the current period. (p. 42) The total product cost of goods sold during the period. (p. 44)

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Related Questions

Problem 15-1A Production costs computed and recorded; reports prepared LO C2, P1, P2, P3, P4

[The following information applies to the questions displayed below.]

Marcelino Co.'s March 31 inventory of raw materials is $82,000. Raw materials purchases in April are $580,000, and factory payroll cost in April is $381,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $25,000; factory rent, $31,000; factory utilities, $24,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $650,000 cash in April. Costs of the three jobs worked on in April follow.

Job 306 Job 307 Job 308
Balances on March 31
Direct materials $ 28,000 $ 36,000
Direct labor 24,000 15,000
Applied overhead 12,000 7,500
Costs during April
Direct materials 139,000 205,000 $ 100,000
Direct labor 103,000 152,000 101,000
Applied overhead ? ? ?
Status on April 30 Finished (sold) Finished (unsold) In process

rev: 03_15_2018_QC_CS-121813

Problem 15-1A Part 1

Required:
1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).

Job 306 Job 307 Job 308 April Total
From March
Direct Materials $28,000 $36,000 $64,000
Direct Labor 24,000 15,000 39,000
Applied overhead 12,000 7,500 19,500
Beginning goods in process
For April
Direct Materials 139,000 205,000 100,000 444,000
Direct Labor 103,000 152,000 101,000 356,000
Applied overhead
Total costs added in April
Total costs (April 30)
Status on April 30 Finished (sold) Finished (unsold) In process
April 30 cost included in:

Problem 15-1A Part 2

  1. Materials purchases (on credit).
  2. Direct materials used in production.
  3. Direct labor paid and assigned to Work in Process Inventory.
  4. Indirect labor paid and assigned to Factory Overhead.
  5. Overhead costs applied to Work in Process Inventory.
  6. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)
  7. Transfer of Jobs 306 and 307 to Finished Goods Inventory.
  8. Cost of goods sold for Job 306.
  9. Revenue from the sale of Job 306.
  10. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)

2. Prepare journal entries for the month of April to record the above transactions.

Problem 15-1A Part 3

3. Prepare a schedule of cost of goods manufactured.

MARCELINO COMPANY
Schedule of Cost of Goods Manufactured
For Month Ended April 30
Total manufacturing costs
Total cost of work in process
Cost of goods manufactured

[The following information applies to the questions displayed below.]

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $675,000 cash in April. Costs of the three jobs worked on in April follow.

Job 306 Job 307 Job 308
Balances on March 31
Direct materials $ 27,000 $ 45,000
Direct labor 21,000 19,000
Applied overhead 10,500 9,500
Costs during April
Direct materials 139,000 215,000 $ 105,000
Direct labor 103,000 152,000 104,000
Applied overhead ? ? ?
Status on April 30 Finished (sold) Finished (unsold) In process

Problem 19-1A Part 1

Required:
1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).

[The following information applies to the questions displayed below.]

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $675,000 cash in April. Costs of the three jobs worked on in April follow.

Job 306 Job 307 Job 308
Balances on March 31
Direct materials $ 27,000 $ 45,000
Direct labor 21,000 19,000
Applied overhead 10,500 9,500
Costs during April
Direct materials 139,000 215,000 $ 105,000
Direct labor 103,000 152,000 104,000
Applied overhead ? ? ?
Status on April 30 Finished (sold) Finished (unsold) In process

Problem 19-1A Part 2

Materials purchases (on credit).

Direct materials used in production.

Direct labor paid and assigned to Work in Process Inventory.

Indirect labor paid and assigned to Factory Overhead.

Overhead costs applied to Work in Process Inventory.

Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)

Transfer of Jobs 306 and 307 to Finished Goods Inventory.

Cost of goods sold for Job 306.

Revenue from the sale of Job 306.

Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)


2. Prepare journal entries for the month of April to record the above transactions.

[The following information applies to the questions displayed below.]

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $675,000 cash in April. Costs of the three jobs worked on in April follow.

Job 306 Job 307 Job 308
Balances on March 31
Direct materials $ 27,000 $ 45,000
Direct labor 21,000 19,000
Applied overhead 10,500 9,500
Costs during April
Direct materials 139,000 215,000 $ 105,000
Direct labor 103,000 152,000 104,000
Applied overhead ? ? ?
Status on April 30 Finished (sold) Finished (unsold) In process

Problem 19-1A Part 3

3. Prepare a schedule of cost of goods manufactured.

[The following information applies to the questions displayed below.]

Marcelino Co.'s March 31 inventory of raw materials is $81,000. Raw materials purchases in April are $530,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $60,000; indirect labor, $20,000; factory rent, $35,000; factory utilities, $21,000; and factory equipment depreciation, $59,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $675,000 cash in April. Costs of the three jobs worked on in April follow.

Job 306 Job 307 Job 308
Balances on March 31
Direct materials $ 27,000 $ 45,000
Direct labor 21,000 19,000
Applied overhead 10,500 9,500
Costs during April
Direct materials 139,000 215,000 $ 105,000
Direct labor 103,000 152,000 104,000
Applied overhead ? ? ?
Status on April 30 Finished (sold) Finished (unsold) In process

Problem 19-1A Part 4

4.1 Compute gross profit for April.

Marcelino Co.'s March 31 inventory of raw materials is $82,000. Raw materials purchases in April are $520,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $22,000; factory rent, $36,000; factory utilities, $25,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $655,000 cash in April. Costs of the three jobs worked on in April follow.

Job 306 Job 307 Job 308
Balances on March 31
Direct materials $ 29,000 $ 36,000
Direct labor 24,000 15,000
Applied overhead 12,000 7,500
Costs during April
Direct materials 135,000 215,000 $ 115,000
Direct labor 103,000 151,000 103,000
Applied overhead ? ? ?
Status on April 30 Finished (sold) Finished (unsold) In process

Problem 19-1A Part 1

Required:
1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).

Marcelino Co.'s March 31 inventory of raw materials is $82,000. Raw materials purchases in April are $520,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $22,000; factory rent, $36,000; factory utilities, $25,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $655,000 cash in April. Costs of the three jobs worked on in April follow.

Job 306 Job 307 Job 308
Balances on March 31
Direct materials $ 29,000 $ 36,000
Direct labor 24,000 15,000
Applied overhead 12,000 7,500
Costs during April
Direct materials 135,000 215,000 $ 115,000
Direct labor 103,000 151,000 103,000
Applied overhead ? ? ?
Status on April 30 Finished (sold) Finished (unsold) In process

Problem 19-1A Part 2

Materials purchases (on credit).

Direct materials used in production.

Direct labor paid and assigned to Work in Process Inventory.

Indirect labor paid and assigned to Factory Overhead.

Overhead costs applied to Work in Process Inventory.

Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)

Transfer of Jobs 306 and 307 to Finished Goods Inventory.

Cost of goods sold for Job 306.

Revenue from the sale of Job 306.

Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)


2. Prepare journal entries for the month of April to record the above transactions. 1-13

Marcelino Co.'s March 31 inventory of raw materials is $82,000. Raw materials purchases in April are $520,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $22,000; factory rent, $36,000; factory utilities, $25,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $655,000 cash in April. Costs of the three jobs worked on in April follow.

Job 306 Job 307 Job 308
Balances on March 31
Direct materials $ 29,000 $ 36,000
Direct labor 24,000 15,000
Applied overhead 12,000 7,500
Costs during April
Direct materials 135,000 215,000 $ 115,000
Direct labor 103,000 151,000 103,000
Applied overhead ? ? ?
Status on April 30 Finished (sold) Finished (unsold) In process

Problem 19-1A Part 3

3. Prepare a schedule of cost of goods manufactured.

Marcelino Co.'s March 31 inventory of raw materials is $82,000. Raw materials purchases in April are $520,000, and factory payroll cost in April is $379,000. Overhead costs incurred in April are: indirect materials, $59,000; indirect labor, $22,000; factory rent, $36,000; factory utilities, $25,000; and factory equipment depreciation, $58,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $655,000 cash in April. Costs of the three jobs worked on in April follow.

Job 306 Job 307 Job 308
Balances on March 31
Direct materials $ 29,000 $ 36,000
Direct labor 24,000 15,000
Applied overhead 12,000 7,500
Costs during April
Direct materials 135,000 215,000 $ 115,000
Direct labor 103,000 151,000 103,000
Applied overhead ? ? ?
Status on April 30 Finished (sold) Finished (unsold) In process

Problem 19-1A Part 4

4.1 Compute gross profit for April.



4.2 Show how to present the inventories on the April 30 balance sheet.