Question

QUESTION 3

The following production information is provided for Ludicrow Productions related to the month of June 2017:

Direct materials used	$	15,600
Direct Labor		11,900
Total Factory overhead		4,800
Beginning work in process		7,600
Ending work in process		2,100
Beginning finished goods inventory		11,300
Ending finished goods inventory		7,900

a. What is the Cost of Goods Manufactured?   

b. What is the Cost of Goods Sold?

QUESTION 4

Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $230,000, and direct labor costs to be $110,000. Actual overhead costs for the year totaled $300,000, and actual direct labor costs totaled $150,000.

a. What is the pre-determined overhead allocation rate?   %

b. What is the amount of applied overhead based on this rate and actual direct labor costs?

c. Was overhead underapplied or overapplied?   By how much?

QUESTION 5

The LaRose Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process, whereas direct materials are added at the beginning of the process.

During August, the company transferred 650,000 units of product to finished goods. The company started 990,000 units in August.

At the end of August, the work in process inventory consists of 450,000 units that are 60% complete with respect to conversion. Beginning inventory had $320,000 of direct materials and $214,000 of conversion cost. The direct material cost added in August is $1,320,000 and the conversion cost added is $1,845,000.

Beginning work in process consisted of 110,000 units that were 100% complete with respect to direct materials and 50% complete with respect to conversion. Of the units completed, 110,000 were from beginning work in process and 540,000 units were started and completed during the period.

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a. What were the total costs that were transferred out?

B. What were the total costs assigned to ending work in process inventory?

Answer 1

3)Total manufacturing cost =direct material used+ +direct labor +overhead

     = 15600+11900+4800

     = 32300

Cost of goods manufactured =beginning WIP +Total manufacturing cost -ending WIP

      = 7600+32300-2100

    = 37800

Cost of goods sold =beginning FG+ cost of goods manufactured -ending FG

            = 11300+37800-7900

            = 41200

4)

OVERHEAD rate : estimated overhead/estimated direct labor cost

       = 230000/110000

          = 209.10% of direct labor cost

b)overhead applied :Actual direct labor cost* rate

              = 150000*209.10%

                = 313650

c)overhead underapplied /(overapplied) =actual -applied

       =300000-313650

          = $ (13650)

5)

	Material	conversion
Units completed and transfered out	650000	650000
Ending WIP	450000	270000     [450000*.60]
EQUIValent unit	1100000	920000
Total cost	320000+1320000=1640000	214000+1845000=2059000
cost per equivalent unit	1640000/1100000=$ 1.49	2.24

cost of units ransfered out : units transfered*total cost per unit

       = 650000*(1.49+2.24)

    = $ 2,424,500

ending WIP : [450000*1.49]+[270000*2.24]

         = 670500+ 604800

        = 1,275,300