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Sawaya Co., Ltd., of Japan is a manufacturing company whose total factory overhead costs fluctuate considerably from year to year according to increases and decreases in the number of direct labor-hours worked in the factory. Total factory overhead costs at high and low levels of activity for recent years are given below: |
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Level of Activity |
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| Low | High | ||||
| Direct labor-hours | 47,100 | 62,800 | |||
| Total factory overhead costs | $ | 245,580 | $ | 273,840 | |
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The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 47,100-hour level of activity as follows: |
| Indirect materials (variable) | $ | 61,230 |
| Rent (fixed) | 127,000 | |
| Maintenance (mixed) | 57,350 | |
| Total factory overhead costs | $ | 245,580 |
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To have data available for planning, the company wants to break down the maintenance cost into its variable and fixed cost elements. |
| Required: |
| 1. |
Estimate how much of the $273,840 factory overhead cost at the high level of activity consists of maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $273,840 consists of indirect materials and rent. Think about the behavior of variable and fixed costs!) (Do not round intermediate calculations.) |
Maintenance cost at high level of activity_________
| 2. |
Using the high-low method, estimate a cost formula for maintenance. (Do not round intermediate calculations. Round "Variable cost element" to 2 decimal places.) |
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Y =_____ +______X
| 3. |
What total factory overhead costs would you expect the company to incur at an operating level of 51,810 direct labor-hours? (Do not round intermediate calculations.) |
Total Factory overhead cost____
In: Accounting
Required information
[The following
information applies to the questions displayed below.]
Victory Company uses weighted-average process costing to account
for its production costs. Conversion cost is added evenly
throughout the process. Direct materials are added at the beginning
of the process. During November, the company transferred 740,000
units of product to finished goods. At the end of November, the
work in process inventory consists of 202,000 units that are 50%
complete with respect to conversion. Beginning inventory had
$306,150 of direct materials and $105,125 of conversion cost. The
direct material cost added in November is $2,048,850, and the
conversion cost added is $1,997,375. Beginning work in process
consisted of 77,000 units that were 100% complete with respect to
direct materials and 80% complete with respect to conversion. Of
the units completed, 77,000 were from beginning work in process and
663,000 units were started and completed during the period.
Required:
1. Determine the equivalent units of production
with respect to direct materials and conversion.
| Equivalent Units of Production (EUP)- Weighted Average Method | |||||
| Units | % Materials | EUP- Materials | % Conversion | EUP-Conversion | |
|
Beginning work in process inventory - units Ending work in process - units Units completed and transferred out Units started this period |
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Beginning work in process inventory - units Ending work in process - units Units completed and transferred out Units started this period |
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| Total units | |||||
2. Compute both the direct material cost and
the conversion cost per equivalent unit.
| Cost per equivalent unit of production | Materials | Conversion | ||
|
Costs incurred this period Costs of beginning work in process Costs of ending work in process Costs transferred out |
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Costs incurred this period Costs of beginning work in process Costs of ending work in process Costs transferred out |
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| Total costs | Costs | Costs | ||
| ÷ Equivalent units of production | EUP | EUP | ||
| Cost per equivalent unit of production (rounded to 2 decimals) |
3. Compute the direct material cost and the
conversion cost assigned to units completed and transferred out and
ending work in process inventory. (Round "Cost per EUP" to
2 decimal places.)
|
In: Accounting
Required information
[The following
information applies to the questions displayed below.]
Victory Company uses weighted-average process costing to account
for its production costs. Conversion cost is added evenly
throughout the process. Direct materials are added at the beginning
of the process. During November, the company transferred 800,000
units of product to finished goods. At the end of November, the
work in process inventory consists of 191,000 units that are 50%
complete with respect to conversion. Beginning inventory had
$515,320 of direct materials and $201,488 of conversion cost. The
direct material cost added in November is $3,448,680, and the
conversion cost added is $3,828,262. Beginning work in process
consisted of 80,000 units that were 100% complete with respect to
direct materials and 80% complete with respect to conversion. Of
the units completed, 80,000 were from beginning work in process and
720,000 units were started and completed during the period.
Required:
1. Determine the equivalent units of production
with respect to direct materials and conversion.
| Equivalent Units of Production (EUP)- Weighted Average Method | |||||
| Units | % Materials | EUP- Materials | % Conversion | EUP-Conversion | |
|
Beginning work in process inventory - units Ending work in process - units Units completed and transferred out Units started this period |
|||||
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Beginning work in process inventory - units Ending work in process - units Units completed and transferred out Units started this period |
|||||
| Total units | |||||
2. Compute both the direct material cost and the conversion cost per equivalent unit.
| Cost per equivalent unit of production | Materials | Conversion | ||
|
Costs incurred this period Costs of beginning work in process Costs of ending work in process Costs transferred out |
||||
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Costs incurred this period Costs of beginning work in process Costs of ending work in process Costs transferred out |
||||
| Total costs | Costs | Costs | ||
| ÷ Equivalent units of production | EUP | EUP | ||
| Cost per equivalent unit of production (rounded to 2 decimals) | 0 | 0 |
3. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)
| Cost of units transferred out: | EUP | Cost per EUP | Total cost | |
| Direct materials | ||||
| Conversion | ||||
| Total costs transferred out | ||||
| Costs of ending work in process | EUP | Cost per EUP | Total cost | |
| Direct materials | $0.00 | $0 | ||
| Conversion | $0.00 | 0 | ||
| Total cost of ending work in process | ||||
| Total costs accounted for |
In: Accounting
Lower-of-Cost-or-Market Inventory
On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 10.
| Product |
Inventory |
Cost Per |
|
| Class 1: | |||
| Model A | 19 | $299 | $295 |
| Model B | 23 | 78 | 86 |
| Model C | 44 | 237 | 241 |
| Class 2: | |||
| Model D | 9 | 78 | 83 |
| Model E | 9 | 244 | 228 |
a. Determine the value of the inventory at the lower of cost or market applied to each item in the inventory.
| Inventory at the Lower of Cost or Market | ||||||
Product |
Inventory Quantity |
Cost per Unit |
Market Value per Unit (Net Realizable Value) |
Cost | Market | Lower of Cost or Market |
| Model A | $ | $ | $ | $ | $ | |
| Model B | ||||||
| Model C | ||||||
| Model D | ||||||
| Model E | ||||||
| Total | $ | $ | $ | |||
b. Determine the value of the inventory at the lower of cost or market applied to each class of inventory.
| Inventory at the Lower of Cost or Market |
||||||
Product |
Inventory Quantity |
Cost per Unit |
Market Value per Unit (Net Realizable Value) |
Cost | Market | Lower of Cost or Market |
| Class 1: | ||||||
| Model A | $ | $ | $ | $ | ||
| Model B | ||||||
| Model C | ||||||
| Subtotal | $ | $ | $ | |||
| Class 2: | ||||||
| Model D | $ | $ | ||||
| Model E | ||||||
| Subtotal | $ | $ | ||||
| Total | $ | $ | $ | |||
c. Determine the value of the inventory at the lower of cost or market applied to total inventory.
| Inventory at the Lower of Cost or Market | ||||||
Product |
Inventory Quantity |
Cost per Unit |
Market Value per Unit (Net Realizable Value) |
Cost | Market | Lower of Cost or Market |
| Model A | $ | $ | $ | $ | ||
| Model B | ||||||
| Model C | ||||||
| Model D | ||||||
| Model E | ||||||
| Total | $ | $ | $ | |||
Check My Work
In: Accounting
Lower-of-Cost-or-Market Inventory
On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 10.
| Product |
Inventory |
Cost Per |
|
| Class 1: | |||
| Model A | 10 | $164 | $144 |
| Model B | 20 | 253 | 269 |
| Model C | 47 | 48 | 33 |
| Class 2: | |||
| Model D | 26 | 48 | 37 |
| Model E | 35 | 49 | 37 |
a. Determine the value of the inventory at the lower of cost or market applied to each item in the inventory.
| Inventory at the Lower of Cost or Market | ||||||
Product |
Inventory Quantity |
Cost per Unit |
Market Value per Unit (Net Realizable Value) |
Cost | Market | Lower of Cost or Market |
| Model A | $ | $ | $ | $ | $ | |
| Model B | ||||||
| Model C | ||||||
| Model D | ||||||
| Model E | ||||||
| Total | $ | $ | $ | |||
b. Determine the value of the inventory at the lower of cost or market applied to each class of inventory.
| Inventory at the Lower of Cost or Market |
||||||
Product |
Inventory Quantity |
Cost per Unit |
Market Value per Unit (Net Realizable Value) |
Cost | Market | Lower of Cost or Market |
| Class 1: | ||||||
| Model A | $ | $ | $ | $ | ||
| Model B | ||||||
| Model C | ||||||
| Subtotal | $ | $ | $ | |||
| Class 2: | ||||||
| Model D | $ | $ | ||||
| Model E | ||||||
| Subtotal | $ | $ | ||||
| Total | $ | $ | $ | |||
c. Determine the value of the inventory at the lower of cost or market applied to total inventory.
| Inventory at the Lower of Cost or Market | ||||||
Product |
Inventory Quantity |
Cost per Unit |
Market Value per Unit (Net Realizable Value) |
Cost | Market | Lower of Cost or Market |
| Model A | $ | $ | $ | $ | ||
| Model B | ||||||
| Model C | ||||||
| Model D | ||||||
| Model E | ||||||
| Total | ||||||
In: Accounting
Lower-of-Cost-or-Market Inventory
On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 10.
| Product |
Inventory |
Cost Per |
|
| Class 1: | |||
| Model A | 32 | $256 | $251 |
| Model B | 8 | 94 | 79 |
| Model C | 18 | 178 | 194 |
| Class 2: | |||
| Model D | 23 | 247 | 263 |
| Model E | 34 | 98 | 77 |
a. Determine the value of the inventory at the lower of cost or market applied to each item in the inventory.
| Inventory at the Lower of Cost or Market | ||||||
Product |
Inventory Quantity |
Cost per Unit |
Market Value per Unit (Net Realizable Value) |
Cost | Market | Lower of Cost or Market |
| Model A | $ | $ | $ | $ | $ | |
| Model B | ||||||
| Model C | ||||||
| Model D | ||||||
| Model E | ||||||
| Total | $ | $ | $ | |||
b. Determine the value of the inventory at the lower of cost or market applied to each class of inventory.
| Inventory at the Lower of Cost or Market |
||||||
Product |
Inventory Quantity |
Cost per Unit |
Market Value per Unit (Net Realizable Value) |
Cost | Market | Lower of Cost or Market |
| Class 1: | ||||||
| Model A | $ | $ | $ | $ | ||
| Model B | ||||||
| Model C | ||||||
| Subtotal | $ | $ | $ | |||
| Class 2: | ||||||
| Model D | $ | $ | ||||
| Model E | ||||||
| Subtotal | $ | $ | ||||
| Total | $ | $ | $ | |||
c. Determine the value of the inventory at the lower of cost or market applied to total inventory.
| Inventory at the Lower of Cost or Market | ||||||
Product |
Inventory Quantity |
Cost per Unit |
Market Value per Unit (Net Realizable Value) |
Cost | Market | Lower of Cost or Market |
| Model A | $ | $ | $ | $ | ||
| Model B | ||||||
| Model C | ||||||
| Model D | ||||||
| Model E | ||||||
| Total | $ | $ | $ | |||
In: Accounting
In: Economics
8. Saxbury Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 4,300 units, its average costs per unit are as follows:
| Average Cost per Unit |
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| Direct materials | $ | 6.50 | |
| Direct labor | $ | 3.20 | |
| Variable manufacturing overhead | $ | 1.30 | |
| Fixed manufacturing overhead | $ | 3.40 | |
| Fixed selling expense | $ | 0.60 | |
| Fixed administrative expense | $ | 0.45 | |
| Sales commissions | $ | 0.35 | |
| Variable administrative expense | $ | 0.35 | |
Required:
a. For financial reporting purposes, what is the total amount of product costs incurred to make 4,300 units?
b. For financial reporting purposes, what is the total amount of period costs incurred to sell 4,300 units?
c. If 5,300 units are sold, what is the variable cost per unit sold? (Round "Per unit" answer to 2 decimal places.)
d. If 5,300 units are sold, what is the total amount of variable costs related to the units sold?
e. If 5,300 units are produced, what is the average fixed manufacturing cost per unit produced? (Round "Per unit" answer to 2 decimal places.)
f. If 5,300 units are produced, what is the total amount of fixed manufacturing cost incurred?
g. If 5,300 units are produced, what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per unit basis? (Round "Per unit" answer to 2 decimal places.)
h. If the selling price is $24.00 per unit, what is the contribution margin per unit sold? (Round "Per unit" answer to 2 decimal places.)
i. If 3,300 units are produced, what is the total amount of direct manufacturing cost incurred?
j. If 3,300 units are produced, what is the total amount of indirect manufacturing cost incurred?
k. What incremental manufacturing cost will the company incur if it increases production from 4,300 to 4,301 units? (Round "Per unit" answer to 2 decimal places.)
In: Accounting
Saxbury Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 4,800 units, its average costs per unit are as follows:
| Average Cost per Unit |
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| Direct materials | $ | 6.00 | |
| Direct labor | $ | 3.90 | |
| Variable manufacturing overhead | $ | 1.60 | |
| Fixed manufacturing overhead | $ | 4.50 | |
| Fixed selling expense | $ | 0.70 | |
| Fixed administrative expense | $ | 0.55 | |
| Sales commissions | $ | 0.45 | |
| Variable administrative expense | $ | 0.45 | |
Required:
a. For financial reporting purposes, what is the total amount of product costs incurred to make 4,800 units? Answer: 76800
b. For financial reporting purposes, what is the total amount of period costs incurred to sell 4,800 units? Answer: 10320
c. If 5,800 units are sold, what is the variable cost per unit sold? (Round "Per unit" answer to 2 decimal places.)
d. If 5,800 units are sold, what is the total amount of variable costs related to the units sold?
e. If 5,800 units are produced, what is the average fixed manufacturing cost per unit produced? (Round "Per unit" answer to 2 decimal places.)
f. If 5,800 units are produced, what is the total amount of fixed manufacturing cost incurred?
g. If 5,800 units are produced, what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per unit basis? (Round "Per unit" answer to 2 decimal places.)
h. If the selling price is $23.50 per unit, what is the contribution margin per unit sold? (Round "Per unit" answer to 2 decimal places.)
i. If 3,800 units are produced, what is the total amount of direct manufacturing cost incurred?
j. If 3,800 units are produced, what is the total amount of indirect manufacturing cost incurred?
k. What incremental manufacturing cost will the company incur if it increases production from 4,800 to 4,801 units? (Round "Per unit" answer to 2 decimal places.)
In: Accounting
As of the end of June, the job cost sheets at Racing Wheels, Inc., show the following total costs accumulated on three custom jobs.
| Job 102 | Job 103 | Job 104 | |||||||
| Direct materials | $ | 21,000 | $ | 55,000 | $ | 59,000 | |||
| Direct labor | 12,000 | 29,700 | 44,000 | ||||||
| Overhead applied | 4,560 | 11,286 | 16,720 | ||||||
Job 102 was started in production in May, and the following costs
were assigned to it in May: direct materials, $8,000; direct labor,
$3,300; and overhead, $1,254. Jobs 103 and 104 were started in
June. Overhead cost is applied with a predetermined rate based on
direct labor cost. Jobs 102 and 103 were finished in June, and Job
104 is expected to be finished in July. No raw materials were used
indirectly in June. Using this information, answer the following
questions. (Assume this company’s predetermined overhead rate did
not change across these months.)
1&2. Complete the table below to calculate the
cost of the raw materials requisitioned and direct labor cost
incurred during June for each of the three jobs?
3. Using the accumulated costs of the jobs, what
predetermined overhead rate is used?
4. How much total cost is transferred to finished
goods during June?
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In: Accounting