Frate Company was formed on December 1, 2015, and uses the periodic inventory system. The following information is available from Frate's inventory records for Product Ply:
| Units | Unit Cost | |||
|---|---|---|---|---|
| January 1, 2016 (beginning inventory) | 3,600 | $10.00 | ||
| Purchases: | ||||
| January 6, 2016 | 4,300 | 11.00 | ||
| January 25, 2016 | 4,000 | 11.50 | ||
| February 17, 2016 | 3,400 | 12.00 | ||
| March 27, 2016 | 3,700 | 12.50 | ||
A physical inventory on March 31, 2016 shows 7,200 units on hand.
Required:
For each method, enter your answers in chronological order.
Prepare schedules to compute the ending inventory at March 31,
2016, under each of the following inventory methods:
(For the weighted average method, round the average cost per unit
to two decimal places.)
1. FIFO
| FRATE COMPANY | |||
| Computation of Inventory for Product Ply Under FIFO Inventory Method | |||
| March 31, 2016 | |||
| Units | Unit cost | Total cost | |
| $ | $ | ||
| March 31, 2016 inventory | $ | ||
2. LIFO
| FRATE COMPANY | |||
| Computation of Inventory for Product Ply Under LIFO Inventory Method | |||
| March 31, 2016 | |||
| Units | Unit cost | Total cost | |
| $ | $ | ||
| March 31, 2016 inventory | $ | ||
3. Weighted average
| FRATE COMPANY | |||
| Computation of Inventory for Product Ply Under Weighted Average Inventory Method | |||
| March 31, 2016 | |||
| Units | Unit cost | Total cost | |
| Beginning inventory | $ | $ | |
| January 6, 2016 | |||
| January 25, 2016 | |||
| February 17, 2016 | |||
| March 27, 2016 | |||
| Total | $ | ||
| Weighted average cost | $ | ||
| March 31, 2016 inventory | |||
In: Accounting
Value-Stream Costing Objective
During the week of June 12, Harrison Manufacturing produced and shipped 16,400 units of its aluminum wheels: 4,000 units of Model A and 12,400 units of Model B. The following costs were incurred:
| Materials | Salaries/ Wages |
Machining | Other | Total Cost | |||||
| Order processing | $19,600 | $19,600 | |||||||
| Production planning | 236,400 | 236,400 | |||||||
| Purchasing | 23,400 | 23,400 | |||||||
| Stamping | $380,000 | 38,000 | $37,000 | $20,000 | 475,000 | ||||
| Welding | 160,000 | 42,000 | 42,000 | 12,000 | 256,000 | ||||
| Cladding | 415,000 | 415,000 | |||||||
| Testing | 10,000 | 10,000 | |||||||
| Packaging and shipping | 10,000 | 10,000 | |||||||
| Invoicing | 12,400 | 12,400 | |||||||
| Total | $955,000 | $391,800 | $79,000 | $32,000 | $1,457,800 |
Required:
1. Assume initially that the value-stream costs
and total units shipped apply only to one model (a single-product
value stream). Calculate the unit cost. Round your answer to the
nearest dollar amount.
$___________ per unit
2. Calculate the unit cost for Models A and B. Round your answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $ |
| Model B | $ |
3. What if Model A is responsible for 40 percent of the materials cost? Calculate the unit materials cost for Models A and B. Round your answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $ |
| Model B | $ |
Calculate the total unit cost for Models A and B. Round your interim calculations and final answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $ |
| Model B | $ |
In: Accounting
High-Low Method, Cost Formulas
The controller of the South Charleston plant of Ravinia, Inc., monitored activities associated with materials handling costs. The high and low levels of resource usage occurred in September and March for three different resources associated with materials handling. The number of moves is the driver. The total costs of the three resources and the activity output, as measured by moves for the two different levels, are presented as follows:
| Resource | Number of Moves | Total Cost | ||
| Forklift depreciation: | ||||
| Low | 5,000 | $2,000 | ||
| High | 15,000 | 2,000 | ||
| Indirect labor: | ||||
| Low | 5,000 | $79,000 | ||
| High | 15,000 | 119,000 | ||
| Fuel and oil for forklift: | ||||
| Low | 5,000 | $3,600 | ||
| High | 15,000 | 10,800 |
Required:
If required, round your answers to two decimal places. Enter a "0" if required.
1. Determine the cost behavior formula of each resource. Use the high-low method to assess the fixed and variable components.
| Forklift depreciation: | |
| V | $ |
| F | $ |
| Y | $ |
| Indirect labor: | |
| V | $ |
| F | $ |
| Y | $ + $X |
| Fuel and oil for forklift: | |
| V | $ |
| F | $ |
| Y | $X |
2. Using your knowledge of cost behavior, predict the cost of each item for an activity output level of 10,000 moves.
| Forklift depreciation | $ |
| Indirect labor | $ |
| Fuel and oil for forklift | $ |
3. Construct a cost formula that can be used to
predict the total cost of the three resources combined. If
required, round your answers to two decimal places.
Materials handling cost = $ + $X
Using this formula, predict the total materials handling cost if
activity output is 10,000 moves.
Y = $
In: Accounting
Value-Stream Costing Objective
During the week of June 12, Harrison Manufacturing produced and shipped 15,400 units of its aluminum wheels: 3,000 units of Model A and 12,400 units of Model B. The following costs were incurred:
| Materials | Salaries/ Wages |
Machining | Other | Total Cost | |||||
| Order processing | $19,000 | $19,000 | |||||||
| Production planning | 243,000 | 243,000 | |||||||
| Purchasing | 22,500 | 22,500 | |||||||
| Stamping | $355,000 | 35,500 | $36,600 | $20,000 | 447,100 | ||||
| Welding | 160,000 | 42,000 | 42,000 | 12,000 | 256,000 | ||||
| Cladding | 265,000 | 265,000 | |||||||
| Testing | 10,500 | 10,500 | |||||||
| Packaging and shipping | 9,000 | 9,000 | |||||||
| Invoicing | 12,600 | 12,600 | |||||||
| Total | $780,000 | $394,100 | $78,600 | $32,000 | $1,284,700 |
Required:
1. Assume initially that the value-stream costs
and total units shipped apply only to one model (a single-product
value stream). Calculate the unit cost. Round your answer to the
nearest dollar amount.
$ per unit
2. Calculate the unit cost for Models A and B. Round your answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $ |
| Model B | $ |
3. What if Model A is responsible for 40 percent of the materials cost? Calculate the unit materials cost for Models A and B. Round your answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $ |
| Model B | $ |
Calculate the total unit cost for Models A and B. Round your interim calculations and final answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $ |
| Model B | $ |
In: Accounting
Value-Stream Costing Objective
During the week of June 12, Harrison Manufacturing produced and shipped 17,200 units of its aluminum wheels: 3,800 units of Model A and 13,400 units of Model B. The following costs were incurred:
| Materials | Salaries/ Wages |
Machining | Other | Total Cost | |||||
| Order processing | $20,000 | $20,000 | |||||||
| Production planning | 228,600 | 228,600 | |||||||
| Purchasing | 22,500 | 22,500 | |||||||
| Stamping | $365,000 | 36,500 | $37,400 | $20,000 | 458,900 | ||||
| Welding | 150,000 | 42,000 | 42,000 | 12,000 | 246,000 | ||||
| Cladding | 655,000 | 655,000 | |||||||
| Testing | 11,000 | 11,000 | |||||||
| Packaging and shipping | 9,000 | 9,000 | |||||||
| Invoicing | 12,800 | 12,800 | |||||||
| Total | $1,170,000 | $382,400 | $79,400 | $32,000 | $1,663,800 |
Required:
1. Assume initially that the value-stream costs
and total units shipped apply only to one model (a single-product
value stream). Calculate the unit cost. Round your answer to the
nearest dollar amount.
$ per unit
2. Calculate the unit cost for Models A and B. Round your answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $ |
| Model B | $ |
3. What if Model A is responsible for 40 percent of the materials cost? Calculate the unit materials cost for Models A and B. Round your answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $ |
| Model B | $ |
Calculate the total unit cost for Models A and B. Round your interim calculations and final answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $ |
| Model B | $ |
In: Accounting
Value-Stream Costing Objective
During the week of June 12, Harrison Manufacturing produced and shipped 18,000 units of its aluminum wheels: 5,000 units of Model A and 13,000 units of Model B. The following costs were incurred:
| Materials | Salaries/ Wages |
Machining | Other | Total Cost | |||||
| Order processing | $19,000 | $19,000 | |||||||
| Production planning | 199,800 | 199,800 | |||||||
| Purchasing | 25,200 | 25,200 | |||||||
| Stamping | $355,000 | 35,500 | $37,800 | $19,600 | 447,900 | ||||
| Welding | 150,000 | 40,000 | 40,000 | 12,000 | 242,000 | ||||
| Cladding | 470,000 | 470,000 | |||||||
| Testing | 10,000 | 10,000 | |||||||
| Packaging and shipping | 9,000 | 9,000 | |||||||
| Invoicing | 13,000 | 13,000 | |||||||
| Total | $975,000 | $351,500 | $77,800 | $31,600 | $1,435,900 |
Required:
1. Assume initially that the value-stream costs
and total units shipped apply only to one model (a single-product
value stream). Calculate the unit cost. Round your answer to the
nearest dollar amount.
$ per unit
2. Calculate the unit cost for Models A and B. Round your answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $ |
| Model B | $ |
3. What if Model A is responsible for 40 percent of the materials cost? Calculate the unit materials cost for Models A and B. Round your answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $ |
| Model B | $ |
Calculate the total unit cost for Models A and B. Round your interim calculations and final answers to the nearest dollar amount.
| Unit Cost | |
| Model A | $ |
| Model B | $ |
In: Accounting
The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 40 cars per month. The cars cost $60 each, and ordering costs are approximately $15 per order, regardless of the order size. The annual holding cost rate is 20%.
In: Statistics and Probability
|
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below: |
| Quarter | ||||||||
| First | Second | Third | Fourth | |||||
| Direct materials | $ | 240,000 | $ | 120,000 | $ | 60,000 | $ | 180,000 |
| Direct labor | 120,000 | 60,000 | 30,000 | 90,000 | ||||
| Manufacturing overhead | 240,000 | 216,000 | 204,000 | ? | ||||
| Total manufacturing costs (a) | $ | 600,000 | $ | 396,000 | $ | 294,000 | $ | ? |
| Number of units to be produced (b) | 160,000 | 80,000 | 40,000 | 120,000 | ||||
| Estimated unit product cost (a รท b) | $ | 3.75 | $ | 4.95 | $ | 7.35 | $ | ? |
|
Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product. |
| Required: | |
| 1-a. |
Using the high-low method, estimate the fixed manufacturing overhead cost per quarter and the variable manufacturing overhead cost per unit. (Round the "Variable manufacturing overhead per unit" to 2 decimal places.) |
| 1-b. |
Compute the total manufacturing cost and unit product cost for the fourth quarter. (Round the "Unit product cost" to 2 decimal places.) |
| 3. |
Estimate the total manufacturing overhead cost for the year and an annual predetermined overhead rate. (Round the "Predetermined overhead rate" to 2 decimal places.) |
In: Accounting
The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 30 cars per month. The cars cost $51 each, and ordering costs are approximately $12 per order, regardless of the order size. The annual holding cost rate is 19%.
In: Operations Management
The A&M Hobby Shop carries a line of radio-controlled model racing cars. Demand for the cars is assumed to be constant at a rate of 40 cars per month. The cars cost $60 each, and ordering costs are approximately $15 per order, regardless of the order size. The annual holding cost rate is 20%.
In: Math