Project #72043 - work

In this section of the report, you are asked to classify the product costs for the production of toka balls. Classify each cost as:

  • fixed or variable
  • direct or indirect

Complete the table and include it in your report. The management team will require justification for each cost (i.e. why you classified the costs as you did).

Product Cost Variable Fixed Direct Indirect
        Electricity        
        Real Estate Taxes        
        Wood for toka sticks        
        Leather to tie wood together        
        Manufacturing Labor        
        Water        
        Lubricants for Machinery        
        Equipment depreciation        

PART 3: The third section of the report should contain your computations for the month of July based on the information given below. The following information is available for a GFI division that produces electronic scoreboards. These are special order products that use a job order cost accounting system. The management team wants to see your calculations in your responses.

 
June 30
July 31
Inventories
 
 

        Raw materials

62,000
75,000

        Goods in process

85,000
95,000

        Finished goods

103,000
58,000
 
 
 
Activities and information for July
 
 

        Raw materials purchases by cash

 
510,000

        Factory payroll by cash

 
745,000

        Factory overhead

 
 

                Indirect materials

 
24,000

                Indirect labor

 
132,000

                Other overhead costs

 
220,000
Sales in cash
 
3,500,000
Predetermined overhead rate based on direct labor cost
 
52%

Compute the following amounts for the month of July.

  1. Cost of direct materials used.
  2. Cost of direct labor used
  3. Cost of goods manufactured.
  4. Cost of goods sold. (Do not consider any underapplied or overapplied overhead.)
  5. Gross profit.
  6. Overapplied or underapplied overhead.

PART 4: In the last section of the report, the management team would like to know the profits they can expect from the two models of pitching machines they currently manufacture. The softball pitching machine and the hardball machine make up the entire product line. To help determine the profit of each individual product, the CFO wants overheads to be allocated back to the products. Total inspection costs are $40,000.

The estimated production budget is as follows.

Softball pitching machine
Units
20 units
Direct labor hours per unit
200 hours per unit
Number of inspections
5 per unit

 

Hardball pitching machine
Units
20 units
Direct labor hours per unit
200 hours per unit
Number of inspections
15 per unit
  1. Under a costing system that uses direct labor hours as a driver for the allocation, how much of the inspection costs would be allocated to softball machine?
  2. Repeat the same question for hardball machine.
  3. Using ABC and the number of inspections as a driver for allocation, recalculate the allocation for the softball machine.
  4. Repeat the activity mentioned in question 3 for hardball machine.

Use Microsoft Excel to calculate your answers to the four questions and cut and paste the results into your report

Subject Business
Due By (Pacific Time) 05/27/2015 12:00 am
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