Cost Information and FIFO

Gunnison Company had the following equivalent units schedule and cost information for its Sewing Department for the month of December:

Required:

1. Calculate the unit cost for December, using the FIFO method.
$  per equivalent unit

2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.

3. What if you were asked for the unit cost from the month of November?

Calculate November's unit cost.
$  per equivalent unit

Cost Information and the Weighted Average Method

Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown below.

Required:

1. Calculate the unit cost for December, using the weighted average method. Do NOT round interim calculations and, if required, round your answer to the nearest cent.
$  per equivalent unit

2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.

Cost of goods transferred out:

Reconciliation
Cost to account for:

3. What if you were asked to show that the weighted average unit cost for materials is the blend of the November unit materials cost and the December unit materials cost? The November unit materials cost is $3.47 ($66,000/19,000), and the December unit materials cost is $12.95 ($570,000/44,000). The equivalent units in BWIP are 19,000, and the FIFO equivalent units are 44,000. Calculate the weighted average unit materials cost using weights defined as the proportion of total units completed from each source (BWIP output and current output). Do NOT round interim calculations and, if required, round your answer to the nearest cent.
$  per unit

1. Entries for Costs in a Job Order Cost System

   Munson Co. uses a job order cost system. The following data summarize the operations related to production for July:

   1. Materials purchased on account, $732,780
   2. Materials requisitioned, $615,540, of which $80,020 was for general factory use
   3. Factory labor used, $754,760, of which $143,400 was indirect
   4. Other costs incurred on account for factory overhead, $175,870; selling expenses, $271,130; and administrative expenses, $161,210
   5. Prepaid expenses expired for factory overhead, $33,710; for selling expenses, $28,580; and for administrative expenses, $20,520
   6. Depreciation of office building was $98,190; of office equipment, $49,830; and of factory equipment, $33,710
   7. Factory overhead costs applied to jobs, $417,680
   8. Jobs completed, $967,270
   9. Cost of goods sold, $937,960

   Required:

   Journalize the entries to record the summarized operations. For a compound transaction, if an amount box does not require an entry, leave it blank.

   a. Materials purchased on account, $732,780.

   Entry	Description	Debit	Credit
   a.

   b. Materials requisitioned, $615,540, of which $80,020 was for general factory use.

   Entry	Description	Debit	Credit
   b.

   c. Factory labor used, $754,760, of which $143,400 was indirect.

   Entry	Description	Debit	Credit
   c.

   d. Other costs incurred on account for factory overhead, $175,870; selling expenses, $271,130; and administrative expenses, $161,210.

   Entry	Description	Debit	Credit
   d.

   e. Prepaid expenses expired for factory overhead, $33,710; for selling expenses, $28,580; and for administrative expenses, $20,520.

   Entry	Description	Debit	Credit
   e.

   f. Depreciation of office building was $98,190; of office equipment, $49,830; and of factory equipment, $33,710.

   Entry	Description	Debit	Credit
   f.

   g. Factory overhead costs applied to jobs, $417,680.

   Entry	Description	Debit	Credit
   g.

   h. Jobs completed, $967,270.

   Entry	Description	Debit	Credit
   h.

   i. Cost of goods sold, $937,960.

   Entry	Description	Debit	Credit
   i.

​(Cost of trade credit​) Calculate the effective cost of the following trade credit terms when payment is made on the net due date. Use approximate​ cost-of-credit formula. Note​: Assume a​ 30-day month and​ 360-day year. a. 2​/5​, net 45 b. 3​/10​, net 30 c. 4​/10​, net 60 d. 2​/10​, net 60 a. When payment is made on the net due​ date, the APR of the credit terms of 2​/5​, net 45 is nothing​%. ​(Round to two decimal​ places.) b. When payment is made on the net due​ date, the APR of the credit terms of 3​/10​, net 30 is nothing​%. ​(Round to two decimal​ places.) c. When payment is made on the net due​ date, the APR of the credit terms of 4​/10​, net 60 is nothing​%. ​(Round to two decimal​ places.) d. When payment is made on the net due​ date, the APR of the credit terms of 2​/10​, net 60 is nothing​%. ​(Round to two decimal​ places.)

​(Cost of trade credit​) Calculate the effective cost of the following trade credit terms when payment is made on the net due date. Use approximate​ cost-of-credit formula. Note​: Assume a​ 30-day month and​ 360-day year. a. 2​/10​, net 30 b. 3​/15​, net 30 c. 3​/15​, net 45 d. 2​/15​, net 60 a. When payment is made on the net due​ date, the APR of the credit terms of 2​/10​, net 30 is nothing​%. ​(Round to two decimal​ places.) b. When payment is made on the net due​ date, the APR of the credit terms of 3​/15​, net 30 is nothing​%. ​(Round to two decimal​ places.) c. When payment is made on the net due​ date, the APR of the credit terms of 3​/15​, net 45 is nothing​%. ​(Round to two decimal​ places.) d. When payment is made on the net due​ date, the APR of the credit terms of 2​/15​, net 60 is nothing​%. ​(Round to two decimal​ places.) Enter your answer in each of the answer boxes.

Discuss the impact of depreciation cost in cost per unit generation. Provide FOUR (4) items in a coal power plant that incorporate the component of this cost.

Briefly describe the typical average cost curve and the marginal cost curves most often faced by monopolists.

Briefly explain how a natural monopoly arises.

X Company uses a plantwide overhead allocation system, with direct labor cost as the cost driver. Budgeted overhead for the year is $867,000. The following annual budgeted and actual information is available for the only three products that it produces - X, Y, Z:

How much overhead was allocated to Product Z [round the overhead rate to two decimal places]?

A plant manager considers that operational cost per hour of five alternative machines. The cost per hour is sensitive to three potential weather conditions: cold, mild, and warm. The following table represents the operational cost per hour for each alternative-state of nature combination.

The EVPI is .

Entries for Costs in a Job Order Cost System

Munson Co. uses a job order cost system. The following data summarize the operations related to production for July:

1. Materials purchased on account, $496,630
2. Materials requisitioned, $417,170, of which $54,230 was for general factory use
3. Factory labor used, $511,530, of which $97,190 was indirect
4. Other costs incurred on account for factory overhead, $119,190; selling expenses, $183,750; and administrative expenses, $109,260
5. Prepaid expenses expired for factory overhead, $22,840; for selling expenses, $19,370; and for administrative expenses, $13,910
6. Depreciation of office building was $66,550; of office equipment, $33,770; and of factory equipment, $22,840
7. Factory overhead costs applied to jobs, $283,080
8. Jobs completed, $655,550
9. Cost of goods sold, $635,690

Required:

Journalize the entries to record the summarized operations. For a compound transaction, if an amount box does not require an entry, leave it blank.

a. Materials purchased on account, $496,630.

b. Materials requisitioned, $417,170, of which $54,230 was for general factory use.

c. Factory labor used, $511,530, of which $97,190 was indirect.

d. Other costs incurred on account for factory overhead, $119,190; selling expenses, $183,750; and administrative expenses, $109,260.

e. Prepaid expenses expired for factory overhead, $22,840; for selling expenses, $19,370; and for administrative expenses, $13,910.

f. Depreciation of office building was $66,550; of office equipment, $33,770; and of factory equipment, $22,840.

g. Factory overhead costs applied to jobs, $283,080.

h. Jobs completed, $655,550.

i. Cost of goods sold, $635,690.