Project #20336 - fin 561 W4_6

 

 

 

Question 1W4
Duggan Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $300,960 for the year, and machine usage is estimated at 125,400 hours.

For the year, $322,290 of overhead costs are incurred and 131,900 hours are used.
 
 
Compute the manufacturing overhead rate for the year. (Round answers to 2 decimal places, e.g. 1.25.)

Manufacturing overhead rate   $  per machine hour
 
 
What is the amount of under- or overapplied overhead at December 31?

Manufacturing Overhead   $ 
 
 
Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation
Debit
Credit
 
 

 

 

 

Question 2W4
The ledger of Custer Company has the following work in process account.

Work in Process—Painting
5/1  Balance  4,230   5/31 Transferred out ?
5/31  Materials  6,820       
5/31  Labor  3,950       
5/31  Overhead  2,100       
5/31  Balance  ?      

Production records show that there were 550 units in the beginning inventory, 30% complete, 1,450 units started, and 1,510 units transferred out. The beginning work in process had materials cost of $2,520 and conversion costs of $1,710. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.
 
 
(a) How many units are in process at May 31?

Work in process, May 31  
 units

(b) What is the unit materials cost for May? (Round unit costs to 2 decimal places, e.g. 2.25.)

The unit materials cost for May  
$

(c) What is the unit conversion cost for May? (Round unit costs to 2 decimal places, e.g. 2.25.)

The unit conversion cost for May  
$
 
 
(d) What is the total cost of units transferred out in May? (Round answer to 0 decimal places, e.g. 1,225.)

The total cost of units transferred out in May  
$

(e) What is the cost of the May 31 inventory? (Round answer to 0 decimal places, e.g. 1,225.)

Work in process  
$
 
 

 

 

 

Question 3W4
Wilkins Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations.

   
Standard
 
Custom
Direct labor costs   $44,300   $119,000
Machine hours   1,130   1,420
Setup hours   110   420

Total estimated overhead costs are $307,600. Overhead cost allocated to the machining activity cost pool is $198,200, and $109,400 is allocated to the machine setup activity cost pool.
 
 
Compute the overhead rate using the traditional (plantwide) approach. (Round answers to 2 decimal places, e.g. 12.25%.)

Predetermined overhead rate  
 % of direct labor cost
 
 
Compute the overhead rates using the activity-based costing approach. (Round answers to 2 decimal places, e.g. $12.25.)

Machining  
$
 per machine hour
Machine setup  
$
 per setup hour
 
 
Determine the difference in allocation between the two approaches. (Round answers to 0 decimal places, e.g. $1,225.)

Traditional costing    
Standard  
$
Custom  
$
     
Activity-based costing    
Standard  
$
Custom  
$
 
 
Question 1W5
Meriden Company has a unit selling price of $590, variable costs per unit of $354, and fixed costs of $204,376.

Compute the break-even point in units using the mathematical equation.

Break-even point    units
 
 
 
Question 2W5
For Turgo Company, variable costs are 63% of sales, and fixed costs are $184,800. Management’s net income goal is $66,985.

Compute the required sales in dollars needed to achieve management’s target net income of $66,985.

Required sales  
$
 
 
 
Question 3W5
For Kozy Company, actual sales are $1,172,000 and break-even sales are $726,640.

Compute the margin of safety in dollars and the margin of safety ratio.

Margin of safety  
$
 
Margin of safety ratio  
 %
 
 
 
Question 4W5
Montana Company produces basketballs. It incurred the following costs during the year.

Direct materials   $14,006
Direct labor   $25,132
Fixed manufacturing overhead   $9,976
Variable manufacturing overhead   $31,824
Selling costs   $20,751

What are the total product costs for the company under variable costing?

Total product costs  
$
 
 
 
Question 5W5
Polk Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2012, the company incurred the following costs.

Variable Cost per Unit    
Direct materials   $7.58
Direct labor   $2.47
Variable manufacturing overhead   $5.81
Variable selling and administrative expenses   $3.94
     
Fixed Costs per Year    
Fixed manufacturing overhead   $238,044
Fixed selling and administrative expenses   $242,501

Polk Company sells the fishing lures for $25.25. During 2012, the company sold 80,800 lures and produced 95,600 lures.
 
 
Assuming the company uses variable costing, calculate Polk’s manufacturing cost per unit for 2012. (Round answer to 2 decimal places, e.g.10.50.)

Manufacturing cost per unit  
$
 
 
Prepare a variable costing income statement for 2012.

POLK COMPANY
Income Statement
For the Year Ended December 31, 2012
Variable Costing
     
$
 
$
   
 
   
       
     
 
   
 
   
       
     
$
 
 
Assuming the company uses absorption costing, calculate Polk’s manufacturing cost per unit for 2012. (Round answer to 2 decimal places, e.g.10.50.)

Manufacturing cost per unit  
$
 
 
Prepare an absorption costing income statement for 2012.

POLK COMPANY
Income Statement
For the Year Ended December 31, 2012
Absorption Costing
     
$
     
     
 
$
   
 
   
       
     
 
 
 
Question 6W5
For the quarter ended March 31, 2012, Maris Company accumulates the following sales data for its product, Garden-Tools: $328,100 budget; $337,000 actual.

Prepare a static budget report for the quarter.

MARIS COMPANY
Sales Budget Report
For the Quarter Ended March 31, 2012
Product Line   Budget   Actual   Difference
Garden-Tools
 
$
 
$
 
$
 
 
 
Question 7W5
Gundy Company expects to produce 1,300,920 units of Product XX in 2012. Monthly production is expected to range from 79,870 to 113,730 units. Budgeted variable manufacturing costs per unit are: direct materials $4, direct labor $6, and overhead $11. Budgeted fixed manufacturing costs per unit for depreciation are $6 and for supervision are $2.

Prepare a flexible manufacturing budget for the relevant range value using 16,930 unit increments. (List variable costs before fixed costs.)

GUNDY COMPANY
Monthly Flexible Manufacturing Budget
For the Year 2012
     
     
$
$
$
$
$
$
     
$
$
$
Question 1W6
Garza and Neely, CPAs, are preparing their service revenue (sales) budget for the coming year (2012). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.

Department
 
Quarter 1
 
Quarter 2
 
Quarter 3
 
Quarter 4
Auditing   2,530   1,830   2,400   2,520
Tax   3,100   2,790   2,380   2,770
Consulting   1,780   1,780   1,780   1,780

Average hourly billing rates are: auditing $82, tax $92, and consulting $101.

Prepare the service revenue (sales) budget for 2012 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

GARZA AND NEELY, CPAs
Sales Revenue Budget
For the Year Ending December 31, 2012
 
Quarter 1
Quarter 2
Dept.
Billable Hours
Billable Rate
Total Rev.
Billable Hours
Billable Rate
Total Rev.
Auditing
$
$
$
$
Tax
Consulting
     
$
   
$

GARZA AND NEELY, CPAs
Sales Revenue Budget
For the Year Ending December 31, 2012
Quarter 3
Quarter 4
Dept.
Billable Hours
Billable Rate
Total Rev.
Billable Hours
Billable Rate
Total Rev.
Auditing
$
$
$
$
Tax
Consulting
     
$
   
$

GARZA AND NEELY, CPAs
Sales Revenue Budget
For the Year Ending December 31, 2012
Year
Dept.
Billable Hours
Billable Rate
Total Rev.
Auditing
$
$
Tax
Consulting
     
$

 
 

 

 

 

Question 2W6
Stanton Company is planning to produce 2,700 units of product in 2012. Each unit requires 1.90 pounds of materials at $4.10 per pound and a half-hour of labor at $16.00 per hour. The overhead rate is 50% of direct labor.

(a) Compute the budgeted amounts for 2012 for direct materials to be used, direct labor, and applied overhead.

Direct materials   $
Direct labor   $
Overhead   $

(b) Compute the standard cost of one unit of product. (Round answer to 2 decimal places, e.g. 2.75.)

Standard cost   $
 
 

 

 

 

Question 3W6
In Harley Company it costs $32 per unit ($17 variable and $15 fixed) to make a product that normally sells for $51. A foreign wholesaler offers to buy 3,130 units at $26 each. Harley will incur special shipping costs of $1 per unit. Assuming that Harley has excess operating capacity.

Indicate the net income (loss) Harley would realize by accepting the special order. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)

   

Reject
Order
 

Accept
Order
 
Net Income
Increase
(Decrease)
Revenues   $   $   $
Costs—Manufacturing      
           Shipping      
Net income/(loss)   $   $   $

The special order should be .
 
 

 

 

 

Question 4W6
Vintech Manufacturing incurs unit costs of $8 ($5 variable and $3 fixed) in making a subassembly part for its finished product. A supplier offers to make 13,800 of the part at $6.20 per unit. If the offer is accepted, Vintech will save all variable costs but no fixed costs.

Prepare an analysis showing the total cost saving, if any, Vintech will realize by buying the part. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)

   

Make
 

Buy
 
Net Income
Increase
(Decrease)
Variable manufacturing costs   $   $   $
Fixed manufacturing costs      
Purchase price      
    Total annual cost   $   $   $

The decision should be to .
 
 

 

 

 

Question 5W6
Ridley Company has a factory machine with a book value of $93,100 and a remaining useful life of 6 years. A new machine is available at a cost of $193,900. This machine will have a 6-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $595,000 to $359,100.

Prepare an analysis showing whether the old machine should be retained or replaced. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)

   


Retain
Equipment
 


Replace
Equipment
 
Net 6-Year
Income
Increase
(Decrease)
Variable manufacturing costs   $   $   $
New machine cost      
    Total   $   $   $

The old factory machine should be .
 
do not change the numbering on the questions 

 

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Due By (Pacific Time) 12/24/2013 12:00 am
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