Question

Q1 Dacosta Corporation had only one job in process on May 1. The job had been charged with $2,250 of direct materials, $6,990 of direct labor, and $10,062 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $19.30 per direct labor-hour.

During May, the following activity was recorded:

Raw materials (all direct materials):
Beginning balance	$	8,950
Purchased during the month	$	38,450
Used in production	$	39,750
Labor:
Direct labor-hours worked during the month		2,350
Direct labor cost incurred	$	24,960
Actual manufacturing overhead costs incurred	$	33,750
Inventories:
Raw materials, May 30		?
Work in process, May 30	$	17,054

Work in process inventory on May 30 contains $3,822 of direct labor cost. Raw materials consist solely of items that are classified as direct materials.

The cost of goods manufactured for May was:

Multiple Choice

• $97,200

• $110,690

• $110,065

• $112,313

Q2 Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $243,900 and 8,900 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $244,800 and actual direct labor-hours were 6,000.

The overhead for the year was: (Round your intermediate calculations to 2 decimal places.)

Garrison 16e Rechecks 2017-08-28

rev: 05_17_2018_QC_CS-127399

Multiple Choice

• $79,500 underapplied

• $80,400 underapplied

• $79,500 overapplied

• $80,400 overapplied

Q3 Gunes Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,100 units. The costs and percentage completion of these units in beginning inventory were:

	Cost				Percent Complete
Materials costs	$	10,900				65%
Conversion costs	$	13,100				30%

A total of 8,800 units were started and 7,700 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

	Cost
Materials costs	$	142,400
Conversion costs	$	359,800

The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs.

The cost per equivalent unit for materials for the month in the first processing department is closest to:

Multiple Choice

• $17.42

• $16.12

• $15.52

• $14.38

Answer 1

Q 1)
Particulars	Amount (in $ )
Beginning Work in Process Inventory ( $ 2,250 + $ 6,990 + $ 10,062 )	$ 19,302
Add: Total Manufacturing Costs ( $39,750 + $24,960 + ($19.30 x 2,350 ) )	$110,065
Less: Ending Work in Process Inventory	( $ 17,054)
Cost of Goods Manufactured	$ 112,313
Option (d) is Correct - $ 112,313
Q 2)
Overhead rate = Total estimated overhead /Estimated direct labor-hours	$ 27. 40 ( $ 243,900 / 8,900)
Estimated overhead ( Actual direct labor-hours x Overhead rate )	$ 164,400
Overhead is under applied ( $ 244,800 (-) $ 164,400 )	$ 80,400 ( under applied )
Option (b) is Correct - $ 80,400 ( under applied )

Q 3)
Particulars	Units
Beginning inventory	1,100
Add: Units Started	8,800
Less: Units Transferred Out	-7,700
Ending Inventory	2,200
Computation of Equivalent Units	Physical Units	Percentage of Completion	Equivalent Units
Units Completed and Transferred out	7,700	100%	7,700
Ending Inventory	2,200	50%	1,100
Total Equivalent Units			8,800
Cost per Equivalent Unit =	Total Material Costs /Total Equivalent Units	($ 10,900 + $ 142,400 ) / 8,800)	$ 17.42 per Unit
Option ( a) is Correct - $ 17.42 per unit