Edney Company employs a standard cost system for product costing. The per-unit standard cost of its product is:
| Raw materials | $ | 14.00 | |
| Direct labor (2 direct labor hours × $8.00 per hour) | 16.00 | ||
| Manufacturing overhead (2 direct labor hours × $10.00 per hour) | 20.00 | ||
| Total standard cost per unit | $ | 50.00 | |
The manufacturing overhead rate is based on a normal capacity level of 600,000 direct labor hours. (Normal capacity is defined as the level of capacity needed to satisfy average customer demand over a period of two to four years. Operationally, this level of capacity would take into consideration sales trends and both seasonal and cyclical factors affecting demand.) The firm has the following annual manufacturing overhead budget:
| Variable | $ | 3,665,000 | |
| Fixed | 3,000,000 | ||
| $ | 6,665,000 | ||
Edney incurred $435,950 in direct labor cost for 54,800 direct labor hours to manufacture 26,000 units in November. Other costs incurred in November include $338,000 for fixed manufacturing overhead and $373,500 for variable manufacturing overhead.
Required:
1. Determine each of the following for November. [Note: Indicate whether each variance is favorable (F) or unfavorable (U).]
a. The variable overhead spending variance.
b. The variable overhead efficiency variance.
c. The fixed overhead spending (budget) variance.
d. The fixed overhead production volume variance.
e. The total amount of under- or overapplied manufacturing overhead (i.e., the total manufacturing overhead cost variance for the period).
2. Prepare the following four journal entries: (a) to record actual variable overhead costs, (b) to record actual fixed overhead costs, (c) to record standard overhead costs applied to production, and (d) to record all four overhead cost variances. The company uses a single account, Factory Overhead, to record all overhead costs. Assume that the actual variable manufacturing overhead consists of utilities payable of $171,500, indirect materials of $126,000 (all materials, direct and indirect, are recorded in a single account, Materials Inventory), and $76,000 depreciation on factory equipment (determined under the units-of-production method). Assume that the fixed manufacturing overhead consists of accrued (i.e, unpaid) salaries of $73,000 and factory depreciation of $265,000. All unpaid salaries should be recorded in a single account, Accrued Payroll.
3. Prepare the appropriate journal entry to close all manufacturing overhead variances to the cost of goods sold (CGS) account. (Assume the cost variances you calculated above are for the year, not the month.)
In: Accounting
Unit Cost and Cost Assignment, Nonuniform Inputs
Loran Inc. had the following equivalent units schedule and cost for its fabrication department during September:
| Materials | Conversion | ||
| Units completed | 180,000 | 180,000 | |
| Add: Units in ending WIP x Fraction complete | 67,000 | 35,510 | |
| (67,000 x 53%) | |||
| Equivalent units of output | 247,000 | 215,510 | |
| Costs: | |||
| Work in process, September 1: | |||
| Materials | $147,000 | ||
| Conversion costs | 7,875 | ||
| Total | $154,875 | ||
| Current costs: | |||
| Materials | $1,206,000 | ||
| Conversion costs | 430,980 | ||
| Total | $1,636,980 |
Required:
1. Calculate the unit cost for materials, for conversion, and in total for the fabrication department for September. If required, round your answers to the nearest cent.
| Unit materials cost | $ |
| Unit conversion cost | $ |
| Total unit cost | $ |
2. Calculate the cost of units transferred out and the cost of EWIP. Round unit cost value to the nearest cent in intermediate calculations. If required, round final answers to the nearest dollar.
| Cost transferred out | $ |
| Cost of ending work in process | $ |
In: Accounting
|
Expected Monthly Cost |
Maximum WTP for Insurance |
Total Expected Monthly Cost |
||
|
Type of Person |
Number of People |
($) |
($) |
($) |
|
Very Healthy |
450 |
100 |
110 |
45,000 |
|
Healthy |
250 |
550 |
633 |
137,500 |
|
Unhealthy |
100 |
650 |
910 |
65,000 |
|
Very Unhealthy |
50 |
5,000 |
7,500 |
250,000 |
|
Total |
850 |
497,500 |
How could the model you just examined be extended to more than four types of health insurance consumers?
10. What if the insurance company does incur administrative costs? How would this affect the expected costs of running the insurance policy, the premiums charged, and the consumer surplus of those who buy insurance? (Provide realistic estimates of administrative costs and your reasons).
11. How would the results of this model change if the insurance companies were not required to provide full insurance to everyone and could offer multiple policies ( including one with either a co-pay or deductible?
In: Economics
Manufacturing cost data for Orlando Company, which uses a job
order cost system, are presented below.
Indicate the missing amount for each letter. Assume that in all
cases manufacturing overhead is applied on the basis of direct
labor cost and the rate is the same. (Round overhead
rate to 2 decimal places, e.g. 15.25 and final answers to 0 decimal
places, e.g. 5,275.)
|
Case A |
Case B |
||||||
|---|---|---|---|---|---|---|---|
| Direct materials used | $enter a dollar amount | (a) | $93,900 | ||||
| Direct labor | 52,000 | 147,700 | |||||
| Manufacturing overhead applied | 33,800 | enter a dollar amount | (d) | ||||
| Total manufacturing costs | 146,650 | enter a dollar amount | (e) | ||||
| Work in process 1/1/20 | enter a dollar amount | (b) | 19,500 | ||||
| Total cost of work in process | 203,200 | enter a dollar amount | (f) | ||||
| Work in process 12/31/20 | enter a dollar amount | (c) | 16,700 | ||||
| Cost of goods manufactured | 194,300 | enter a dollar amount | (g) | ||||
In: Accounting
2. 2: Interest Rates: Cost of Money
|
Cost of Money Four fundamental factors affect the supply of, and demand for,
investment capital, hence the -Select-amountcostdesirabilityItem 1
of money. These factors are: production opportunities, time
preferences for consumption, risk, and inflation. If the entire
population was living at the subsistence level, time preferences
for current consumption would be -Select-highlowItem 2 , savings
would be -Select-highlowItem 3 , interest rates would be
-Select-highlowItem 4 , and capital formation would be
-Select-easydifficultItem 5 . Producers' expected returns on their
business investments set a(n) -Select-lowerupperItem 6 limit on how
much they can pay for savings, while consumers' time preferences
for consumption establish how much consumption they are willing to
delay, and, consequently, how much they will -Select-spendsaveItem
7 at different interest rates. In addition, -Select-lowerhigherItem
8 risk and -Select-lowerhigherItem 9 inflation lead to higher
interest rates. |
In: Economics
How do we determine the Net Pension Expense?
| Service Cost + Interest Cost + Actual return on Pension plan assets +/- Amortization of any deferred amounts. |
|
Service Cost + Interest Cost + Expected return on Pension plan assets +/- Amortization of any deferred amounts. |
| Service Cost + Interest Cost - Actual return on Pension plan assets +/- Amortization of any deferred amounts. |
| Service Cost + Interest Cost - Expected return on Pension plan assets +/- Amortization of any deferred amounts. |
|
None of these answers are correct. wayne Corporation reported the following ending balances related to its defined benefit plan as of December 31, 2017: Fair value of Plan assets 47,872 Projected Benefit Obligation 43,265 Pension Expense 4,843 What is wayne’s net pension status as of December 31, 2017?
|
In: Accounting
"Inventory Cost Flow Assumptions"
In: Accounting
What is the difference between volume-based cost drivers and
activity-based cost drivers? Give an example of each to
illustrate.
Could you please explain the answer in detail? I know that this
question is on Chegg already, but I still need a more in-depth
help.
Thanks!
In: Accounting
Product Cost Method of Product Costing
Voice Com, Inc., uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 4,700 units of cell phones are as follows:
| Variable costs: | Fixed costs: | |||||||
| Direct materials | $74 | per unit | Factory overhead | $200,400 | ||||
| Direct labor | 31 | Selling and admin. exp. | 69,000 | |||||
| Factory overhead | 25 | |||||||
| Selling and admin. exp. | 21 | |||||||
| Total variable cost per unit | $151 | per unit | ||||||
Voice Com desires a profit equal to a 14% rate of return on invested assets of $599,500.
a. Determine the amount of desired profit from
the production and sale of 4,700 units of cell phones.
$
b. Determine the product cost per unit for the
production of 4,700 of cell phones. If required, round your answer
to nearest dollar.
$ per unit
c. Determine the product cost markup percentage
(rounded to two decimal places) for cell phones.
%
d. Determine the selling price of cell phones. Round to the nearest dollar.
| Cost | $per unit |
| Markup | $per unit |
| Selling price | $per unit |
In: Accounting
Marigold Company’s Assembly Department has materials cost at $2 per unit and conversion cost at $5 per unit. There are 19200 units in ending work in process, all of which are 60% complete as to conversion costs and 60% complete as to materials. How much are total costs to be assigned to inventory?
In: Accounting