Gold Corporation produces a single product and the standard labor cost of that product is 5 hours at a labor rate of $25 per hour. During the month of January, 50,000 hours of labor are incurred at a cost of $23 per hour to produce 9,850 units. Compute the labor price and quantity variance, as well as the total labor variance.

In producing that product, the standard material cost for 1 unit is 10 pounds of direct materials at $3.50 per pound. During January, 95,000 pounds of direct materials were used at a cost of $3.25 per pound to make the 9,850 units. Compute the materials price and quantity variance, as well as the total materials variance.

Gold Corporation allocates overhead using a predetermined rate.  The predetermined rate is calculated using direct labor hours as the cost driver. Budgeted overhead for the month of January was $150,000 and budgeted direct labor hours were 45,000.  Total overhead incurred during the month of January was $165,000.  Compute the overhead variance for Gold Corporation for January.

Now, compute the total variance for Gold Corporation for the month of January.  Explain some reasons behind why those variances may have occurred.

Cornerstone Exercise 6.6 (Algorithmic) Nonuniform Inputs Apeto Company produces premium chocolate candy bars. Conversion costs are added uniformly. For February, EWIP is 30 percent complete with respect to conversion costs. Materials are added at the beginning of the process. The following information is provided for February: Physical flow schedule: Units to account for: Units in BWIP 0 Units started 70,000 Total units to account for 70,000 Units to account for: Units completed: From BWIP 0 Started and completed 48,000 48,000 Units in EWIP 22,000 Total units accounted for 70,000 Inputs Direct Materials Conversion Costs $31,500 $54,600 Required: 1. Calculate the equivalent units for each input category. Equivalent Units Direct Materials Conversion 2. Calculate the unit cost for each category and in total. If required, round your answers to the nearest cent. Unit direct materials cost $ Unit conversion cost $ Total unit cost $ 3. What if a different type of materials is also added at the end of the process (a candy wrapper), costing $4,800? Calculate the new unit cost. If required, round your answer to the nearest cent. $ per unit

Problem 1:

We are analyzing 2 products – product X and product Y.

Product X requires 4 Part As and 3Part B’s. Product Y requires 3 Part A’s and 2 Part B’s.

The standard cost for Part A is $24 per unit.

The standard cost for Part B is $12 per unit.

During this month, the company purchased 50,000 units of Part A for $1,220,000 (there was no beginning balance).

During this month, the company purchased 50,000 units of Part B for $590,000 (there was no beginning balance).

During the month the company produced 500 Xs and 1000 Ys.

During the month the company used 4950 units of Part A and 3540 units of Part B.

Factory payroll was $393,000 with 19,500 hours (this is actual - direct labor only).

X uses 14 standard direct labor hours.

Y uses 12 standard direct labor hours.

Labor standard cost is $20 per hour.

Hint: for production of both X and Y

Use the information given in Problem I.

26) B - Flex Budget

27) B -- Actual Cost (Total)

28) Using Direct Labor Hours, what is the Overhead unit cost of Y using the "traditional" method?

29) What is the Overhead unit ABC cost of Y?

30) What is the ABC allocation of A?

31) What is the ABC allocation of B?

32) What is the DL cost per unit for HB (using standard)

33) What is the total unit ABC cost of X?

34) Using DL hours, what is the total unit cost of X using the "traditional" method? (round to cents)

35) Using the DL hours, what is the total unit cost of Y using the "traditional" method?

36) What is the ABC allocation Rate for producing?

37) Using DL hours, what is the total allocation of Overhead costs to X using the "traditional" method?

38) What is the ABC allocation of the production cost of X?

39) What is the DM cost per unit for X (using standards)

40) What is the ABC allocation of producing cost of X?

41) Using DL hours, what is the Overhead unit cost of X using the "traditional" method? (round to cents)

42) What is the ABC allocation Rate for product X?

43) What is the Overhead unit ABC cost of X?

44) What is the DM cost per unit for Y (using standards)

45) Using DL hours, what is the Overhead unit costs to Y using the "traditional" method?

46) What is the DL cost per unit for Y (using standards)

47) What is the total unit ABC cost of Y?

48) Using direct labor hours, what is the allocation rate using the "traditional" method?

Compute the equivalent units for direct materials and conversion costs.

2.

Compute the cost per equivalent unit.

3.

Assign the costs to units completed and transferred out and ending work in process inventory.

4.

Record the journal entry for the costs transferred out of the Assembly Department to the Testing Department.

5.

Post all of the transactions in the​ "Work in Process

Inventory—​Assembly"

​T-account. What is the ending​ balance?

Data:

Cost of Goods Manufactured, using Variable Costing and Absorption Costing

On March 31, the end of the first year of operations, Barnard Inc., manufactured 3,700 units and sold 3,200 units. The following income statement was prepared, based on the variable costing concept:

Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.

Support Department Cost Allocation—Reciprocal Services Method

Blue Africa Inc. produces laptops and desktop computers. The company’s production activities mainly occur in what the company calls its Laser and Forming departments. The Cafeteria and Security departments support the company’s production activities and allocate costs based on the number of employees and square feet, respectively. The total cost of the Security Department is $266,000. The total cost of the Cafeteria Department is $638,000. The number of employees and the square footage in each department are as follows:

Using the reciprocal services method of support department cost allocation, determine the total costs from the Security Department that should be allocated to the Cafeteria Department and to each of the production departments.

Cafeteria
DepartmentLaser
DepartmentForming
DepartmentSecurity Department cost allocation$$$

Multiple-Product Break-even, Break-Even Sales Revenue Cherry Blossom Products Inc. produces and sells yoga-training products: how-to DVDs and a basic equipment set (blocks, strap, and small pillows). Last year, Cherry Blossom Products sold 13,500 DVDs and 4,500 equipment sets. Information on the two products is as follows: DVDs Equipment Sets Price $8 $25 Variable cost per unit 4 15 Total fixed cost is $76,680. Suppose that in the coming year, the company plans to produce an extra-thick yoga mat for sale to health clubs. The company estimates that 9,000 mats can be sold at a price of $18 and a variable cost per unit of $11. Total fixed cost must be increased by $25,560 (making total fixed cost $102,240). Assume that anticipated sales of the other products, as well as their prices and variable costs, remain the same.

Compute the break-even quantity of each product.

A firm in a purely competitive industry is currently producing 1,000 units per day at a total cost of $600. If the firm produced 800 units per day, its total cost would be $400, and if it produced 500 units per day, its total cost would be $375.

a. What are the firm's ATC at these three levels of production?

At 1000 units per day, ATC =

At 800 units per day, ATC =

At 500 units per day, ATC =

b. If every firm in this industry has the same cost structure, is the industry in long-run competitive equilibrium? Yes/No

c. From what you know about these firms’ cost structures, what is the highest possible price per unit that could exist as the market price in long-run equilibrium?

d. If that price ends up being the market price and if the normal rate of profit is 10 percent, then how big will each firm’s accounting profit per unit be?