Required information

The Foundational 15 [LO2-1, LO2-2, LO2-3, LO2-4]

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

Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments--Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):

	Molding			Fabrication			Total
Estimated total machine-hours used		2,500			1,500			4,000
Estimated total fixed manufacturing overhead	$	10,750		$	15,450		$	26,200
Estimated variable manufacturing overhead per machine-hour	$	1.70		$	2.50

	Job P			Job Q
Direct materials	$	16,000		$	9,500
Direct labor cost	$	23,400		$	8,700
Actual machine-hours used:
Molding		2,000			1,100
Fabrication		900			1,200
Total		2,900			2,300

Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.

Required:

For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base. For questions 9-15, assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments.

Foundational 2-1

1. What was the company’s plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)

2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

3. What was the total manufacturing cost assigned to Job P? (Do not round intermediate calculations.)

4. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

5. What was the total manufacturing cost assigned to Job Q? (Do not round intermediate calculations.)

6. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

7. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)

8. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)

9. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department? (Round your answers to 2 decimal places.)

10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

12. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations.)

13. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

14. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

15. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)

These items are taken from the financial statements of Kingbird, Inc. for 2017.

Retained earnings (beginning of year)		$ 33,380
Utilities expense		2,150
Equipment		68,380
Accounts payable		22,250
Cash		14,300
Salaries and wages payable		5,510
Common stock		12,000
Dividends		12,000
Service revenue		72,730
Prepaid insurance		6,010
Maintenance and repairs expense		1,650
Depreciation expense		3,140
Accounts receivable		15,650
Insurance expense		2,660
Salaries and wages expense		41,730
Accumulated depreciation—equipment		21,800

Prepare an income statement for the year ended December 31, 2017.

Kingbird, Inc. Income Statement choose the accounting period  For the Month Ended December 31, 2017For the Year Ended December 31, 2017December 31, 2017
select an opening name for section one  DividendsExpensesNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues
enter an income statement item		$ enter a dollar amount
select an opening name for section two  DividendsExpensesNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues
enter an income statement item	$ enter a dollar amount
enter an income statement item	enter a dollar amount
enter an income statement item	enter a dollar amount
enter an income statement item	enter a dollar amount
enter an income statement item	enter a dollar amount
select a closing name for section two  DividendsExpensesNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		enter a total of the five previous amounts
select a closing name for this statement  DividendsExpensesNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		$ enter a total net income or loss amount

eTextbook and Media

List of Accounts

Prepare a retained earnings statement for the year ended December 31, 2017. (List items that increase retained earnings first.)

Kingbird, Inc. Retained Earnings Statement choose the accounting period  For the Month Ended December 31, 2017December 31, 2017For the Year Ended December 31, 2017
select an opening name  DividendsExpensesNet Income / (Loss)Retained Earnings, January 1, 2017Retained Earnings, December 31, 2017RevenuesTotal ExpensesTotal Revenues	$ enter a dollar amount
select between addition and deduction  AddLess: select an item  DividendsExpensesNet Income / (Loss)Retained Earnings, January 1, 2017Retained Earnings, December 31, 2017RevenuesTotal ExpensesTotal Revenues	enter a dollar amount
	enter a subtotal of the two previous amounts
select between addition and deduction  AddLess: select an item  DividendsExpensesNet Income / (Loss)Retained Earnings, January 1, 2017Retained Earnings, December 31, 2017RevenuesTotal ExpensesTotal Revenues	enter a dollar amount
select a closing name  DividendsExpensesNet Income / (Loss)Retained Earnings, January 1, 2017Retained Earnings, December 31, 2017RevenuesTotal ExpensesTotal Revenues	$ enter a total amount

eTextbook and Media

List of Accounts

Prepare a classified balance sheet as of December 31, 2017. (List current assets in order of liquidity.)

Kingbird, Inc. Balance Sheet choose the accounting period  For the Month Ended December 31, 2017For the Year Ended December 31, 2017December 31, 2017
Assets
select an opening name for subsection one  Current AssetsCurrent LiabilitiesIntangible AssetsLong-Term InvestmentsLong-Term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity
enter a balance sheet item			$ enter a dollar amount
enter a balance sheet item			enter a dollar amount
enter a balance sheet item			enter a dollar amount
select a closing name for subsection one  Current AssetsCurrent LiabilitiesIntangible AssetsLong-Term InvestmentsLong-Term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity					$ enter a total amount for subsection one
select an opening name for subsection two  Current AssetsCurrent LiabilitiesIntangible AssetsLong-Term InvestmentsLong-Term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity
enter a balance sheet item			enter a dollar amount
select between addition and deduction  AddLess: enter a balance sheet item			enter a dollar amount		enter a subtotal of the two previous amounts
select a closing section name for this part of balance sheet  Current AssetsCurrent LiabilitiesIntangible AssetsLong-Term InvestmentsLong-Term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity					$ enter a total amount of this part of the balance sheet
Liabilities and Stockholders' Equity
select an opening name for subsection one  Current AssetsCurrent LiabilitiesIntangible AssetsLong-Term InvestmentsLong-Term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity
enter a balance sheet item			$ enter a dollar amount
enter a balance sheet item			enter a dollar amount
select a closing name for subsection one  Current AssetsCurrent LiabilitiesIntangible AssetsLong-Term InvestmentsLong-Term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity					$ enter a total amount for subsection one of the second part of the balance sheet
select an opening name for section two  Current AssetsCurrent LiabilitiesIntangible AssetsLong-Term InvestmentsLong-Term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity
enter a balance sheet item			enter a dollar amount
enter a balance sheet item			enter a dollar amount
select a closing name for section two  Current AssetsCurrent LiabilitiesIntangible AssetsLong-Term InvestmentsLong-Term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity					enter a total of the two previous amounts
select a closing name for this part of the balance sheet  Current AssetsCurrent LiabilitiesIntangible AssetsLong-Term InvestmentsLong-Term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity					$ enter a total amount for this part of the balance sheet

A fixed capital investment of P10,000,000 is required for a proposed manufacturing plant and an estimated working capital of P2,000,000. Annual depreciation is estimated to be 10% of the fixed capital investment. Determine the rate of return on the total investment if the annual profit is P2,500,000.  Determine the payout period if the annual profit is P2,500,000

Identify and describe each step in the Accounting Cycle.

Forest Components makes aircraft parts. The following transactions occurred in July.

1. Purchased $16,960 of materials on account.

2. Issued $16,790 in direct materials to the production department.

3. Issued $1,290 of supplies from the materials inventory.

4. Paid for the materials purchased in transaction (1) using cash.

5. Returned $2,020 of the materials issued to production in (2) to the materials inventory.

6. Direct labor employees earned $32,300, which was paid in cash.

7. Purchased miscellaneous items for the manufacturing plant for $17,330 on account.

8. Recognized depreciation on manufacturing plant of $36,200.

9. Applied manufacturing overhead for the month.

Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $435,000. Estimated overhead for the year was $430,650.

The following balances appeared in the inventory accounts of Forest Components for July.

	Beginning			Ending
Materials Inventory		?		$	12,510
Work-in-Process Inventory		?			10,550
Finished Goods Inventory	$	2,670			6,910
Cost of Goods Sold		?			73,700

Required:

a. Prepare journal entries to record these transactions.

b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.

The following represents the financial information for Domingo Corporation for two months.

	March			April
Sales revenue	$	540,000		$	430,000
Costs
Process inspection	$	1,500		$	1,840
Scrap		1,940			1,870
Quality training		19,500			13,500
Warranty repairs		4,200			5,100
Product testing equipment		6,600			7,100
Customer complaints		2,900			3,100
Rework		16,000			19,500
Preventive maintenance		12,700			10,200
Materials inspection		7,400			5,000
Field testing		8,600			11,600

Required:

a. Classify these items into Prevention, Appraisal, Internal failure, or External failure costs.

The following represents the financial information for Domingo Corporation for two months.

	March			April
Sales revenue	$	540,000		$	430,000
Costs
Process inspection	$	1,500		$	1,840
Scrap		1,940			1,870
Quality training		19,500			13,500
Warranty repairs		4,200			5,100
Product testing equipment		6,600			7,100
Customer complaints		2,900			3,100
Rework		16,000			19,500
Preventive maintenance		12,700			10,200
Materials inspection		7,400			5,000
Field testing		8,600			11,600

Required:

a. Classify these items into Prevention, Appraisal, Internal failure, or External failure costs.

b. Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for March and April.

Identify the purposes and types of adjusting entries that an entity might make.

The Welding Department of Healthy Company has the following production and manufacturing cost data for February 2020. All materials are added at the beginning of the process.

Manufacturing Costs						Production Data
Beginning work in process						Beginning work in process		15,500	units, 1/10 complete
Materials		$ 18,200				Units transferred out		54,800
Conversion costs		14,460		$ 32,660		Units started		51,500
Materials				206,250		Ending work in process		12,200	units, 1/5 complete
Labor				67,700
Overhead				69,526

Prepare a production cost report for the Welding Department for the month of February. (Round unit costs to 2 decimal places, e.g. 2.25 and all other answers to 0 decimal places, e.g. 1,225.)

HEALTHY MANUFACTURING COMPANY Welding Department Production Cost Report For the Month Ended February 28, 2020
				Equivalent Units
Quantities		Physical Units		Materials		Conversion Costs
Units to be accounted for
Work in process, February 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, February 28
Total units
Costs				Materials		Conversion Costs		Total
Unit costs
Total Costs				$		$		$
Equivalent units
Unit costs				$		$		$
Costs to be accounted for
Work in process, February 1								$
Started into production
Total costs								$
Cost Reconciliation Schedule
Costs accounted for
Transferred out								$
Work in process, February 28
Materials						$
Conversion costs
Total costs								$

26)

In December 2016, Shire Computer’s management establishes the 2017 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $780,000 of overhead costs and $520,000 of direct labor cost in year 2017. During March 2017, Shire began and completed Job 13-56.

  
1. What is the predetermined overhead rate for 2017?
2. Using the information on the following job cost sheet, determine the total cost of the job.

Complete this question by entering your answers in the tabs below.

Required 1 Required 2

What is the predetermined overhead rate for 2017?

Overhead Rate

Choose Numerator / Choose Denominator = Overhead Rate

Required 2

Using the information on the following job cost sheet, determine the total cost of the job. (Round your answers to the nearest dollar amount.)

Job Cost Sheet: Job No. 13-56

Direct Materials Direct Labor Overhead Total Cost

Date Requisition No. Amount Time- Ticket No. Amount Costs Applied

Mar.8 4-129 $7,000 T-306 $600

Mar.11 4-142 $6,950 T-432 $1,310

Mar.18 4-167 $3,450 T-456 $1,300

1) Modern Décor Furniture began June with merchandise inventory of 40 sofas that cost a total of $28,000. During the month, Modern Décor purchased and sold merchandise on account as follows:  

June 7	Purchase	30 sofas @ $700 each
14	Sale	30 sofas @ 1,100each
18	Purchase	50 sofas @ $750 each
27	Sale	40 sofas @ $1,150each

Prepare a perpetual inventory record, using the LIFO inventory costing method, and determine the company's cost of goods sold (COGS), ending merchandise inventory, and gross profit. (20pts)

   

Date	Purchase			Cost of Goods Sold			Inventory On Hand
	Cost	Number	Total	Cost	Number	Total	Cost	Number	Total

2) Taco Hell Inc. had the following balances and transactions during 2017:

Beginning Merchandise Inventory	30 units at $80
March 10	Sold 25 units
June 10	Purchased 40 units at $87
October 30	Sold 30 units

What is the amount of the company's Merchandise Inventory and COGS, as disclosed in the December 31, 2017 balance sheet, using the periodic FIFO inventory costing method? (10pts)

3) Magras Gas uses a perpetual inventory system. Journalize the following sales transactions. (20pts)

June 10	Sold $15,000 of merchandise on account, credit terms are 3/10, n/30. Cost of goods is $8,000.
June 14	Received a $600 sales return from the customer. Cost of the goods is $550.
June 23	Magras Gas receives payment for the customer for the amount due from the June 10 sale.

Date	Transaction	Debit	Credit

Direct Method, Reciprocal Method, Overhead Rates

Macalister Corporation is developing departmental overhead rates based on direct labor hours for its two production departments—Molding and Assembly. The Molding Department employs 19 people, and the Assembly Department employs 75 people. Each person in these two departments works 1,910 hours per year. The production-related overhead costs for the Molding Department are budgeted at $239,000, and the Assembly Department costs are budgeted at $99,000. Two support departments—Engineering and General Factory—directly support the two production departments and have budgeted costs of $221,000 and $379,000, respectively. The production departments’ overhead rates cannot be determined until the support departments’ costs are properly allocated. The following schedule reflects the use of the Engineering Department’s and General Factory Department’s output by the various departments.

	Engineering	General Factory	Molding	Assembly
Engineering hours	—	2,500	2,200	7,800
Square feet	88,200	—	388,080	111,720

For all requirements, round allocation ratios to four significant digits and round allocated costs to the nearest dollar.

Required:

1. Calculate the overhead rates per direct labor hour for the Molding Department and the Assembly Department using the direct allocation method to charge the production departments for support department costs. Round final answers to the nearest cent.

	Overhead rate per DLH
Molding
Assembly

2. Calculate the overhead rates per direct labor hour for the Molding Department and the Assembly Department using the reciprocal method to charge support department costs to each other and to the production departments. Round final answers to the nearest cent. Round your intermediate calculations to four decimal places.

	Overhead rate per DLH
Molding
Assembly

Plata Company produces two products: a mostly handcrafted soft leather briefcase sold under the label Maletin Elegant and a leather briefcase produced largely through automation and sold under the label Maletin Fina. The two products use two overhead activities, with the following costs: Setting up equipment $ 6,000 Machining 19,000 The controller has collected the expected annual prime costs for each briefcase, the machine hours, the setup hours, and the expected production. Elegant Fina Direct labor $9,000 $3,000 Direct materials $3,000 $3,000 Units 3,000 3,000 Machine hours 500 4,500 Setup hours 100 100 Required: 1. Conceptual Connection: Do you think that the direct labor costs and direct materials costs are accurately traced to each briefcase? Explain. 2. Calculate the consumption ratios for each activity. Round your answers to one decimal place. Elegant Fina Machining Setups Calculate the overhead cost per unit for each briefcase by using a plantwide rate based on direct labor costs. Round to the nearest cent. (Note: Do not round intermediate calculations.) Elegant $ per briefcase Fina $ per briefcase ased on your calculations above which of the following statements is correct? More machine and setup costs are assigned to Elegant than Fina. T or F? Conceptual Connection: Calculate the overhead cost per unit for each briefcase by using overhead rates based on machine hours and setup hours. Round your answers to the nearest cent. Elegant $ per unit Fina $ per unit

Pull the annual report from Mergent Online for one of the following Fortune 500 Companies:

• Apple
• Microsoft
• Amazon

Using the Excel Template in the Course Materials folder, calculate the following ratios from 2014-2016.

• Total Debt to Equity Ratio
• Current Ratio
• Return on Equity (ROE)

What do the ratios tell you about your selected company?

Problem 23-5A (Part Level Submission) Hart Labs, Inc. provides mad cow disease testing for both state and federal governmental agricultural agencies. Because the company’s customers are governmental agencies, prices are strictly regulated. Therefore, Hart Labs must constantly monitor and control its testing costs. Shown below are the standard costs for a typical test. Direct materials (2 test tubes @ $1.80 per tube) $3.60 Direct labor (1 hour @ $30 per hour) 30.00 Variable overhead (1 hour @ $7.00 per hour) 7.00 Fixed overhead (1 hour @ $13.00 per hour) 13.00 Total standard cost per test $53.60 The lab does not maintain an inventory of test tubes. As a result, the tubes purchased each month are used that month. Actual activity for the month of November 2017, when 800 tests were conducted, resulted in the following: Direct materials (1,664 test tubes) $2,746 Direct labor (840 hours) 24,360 Variable overhead 5,280 Fixed overhead 10,080 Monthly budgeted fixed overhead is $17,160. Revenues for the month were $52,000, and selling and administrative expenses were $4,100. (a) Your answer is correct. Compute the price and quantity variances for direct materials and direct labor. (Round answers to 0 decimal places, e.g. 5,275.) Materials price variance $ Materials quantity variance $ Labor price variance $ Labor quantity variance $ Click if you would like to Show Work for this question: Open Show Work Show Solution Show Answer Link to Text Link to Text Link to Text Attempts: 1 of 3 used (b) Compute the total overhead variance. Total Overhead variance $