Pacific Ink had beginning work-in-process inventory of $1,005,960 on October 1. Of this amount, $423,500 was the cost of direct materials and $582,460 was the cost of conversion. The 61,000 units in the beginning inventory were 30 percent complete with respect to both direct materials and conversion costs.
During October, 128,000 units were transferred out and 43,000 remained in ending inventory. The units in ending inventory were 80 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. Costs incurred during the period amounted to $3,314,300 for direct materials and $4,022,730 for conversion.
Exercise 8-40 (Algo) Assign Costs to Goods Transferred Out and Ending Inventory: FIFO Method (LO 8-2, 5)
a-1. Compute the cost of goods transferred out and the cost of ending inventory using the FIFO method.
a-2. Is the ending inventory higher or lower under the weighted-average method compared to FIFO?
Can someone break down how to do this for me? Thank you
In: Accounting
Ace Mining Tools Ltd. of Calgary makes specialty tools used in the mining industry. The company uses an ABC system for internal decision making. The company has four activity cost pools, as listed below:
| Activity Cost Pool | Activity Measure | Activity Rate |
| Order size | Direct labour-hours | $17.60 |
| Customer orders | Customer orders | $360.00 |
| Product testing | Testing hours | $79.00 |
| Selling | Sales calls | $750.00 |
The managing director of the company would like information concerning the cost of a recently completed order for hard-rock drills. The order required 100 direct labour-hours, 20 hours of product testing, and five sales calls.
Required:
Prepare a report showing the overhead cost of the order for hard rock drills according to the ABC system. What is the total overhead cost assigned to the order?
In: Accounting
Affordable Electronics Inc. manufactures medium-quality, reasonably priced wireless speakers for home use. The company uses standards to control its costs. The labour standards that have been set for one speaker are as follows
| Standard Hours | Standard Rate per Hour | Standard Cost |
| 12 minutes (0.2 hours) | $15.00 | $3.00 |
During July, 3,400 hours of direct labour time were recorded to make 16,000 units. The direct labour cost totalled $49,300 for the month.
Required:
1. What direct labour cost should have been incurred to make the 16,000 speakers? By how much does this differ from the cost that was incurred?
In: Accounting
How do hotels use cost-volume-profit analysis?
How does the business benefit from using cost-volume-profit?
Does it have a low or high degree of operating leverage?
In: Accounting
Exercise 2-12 Applying Overhead; Cost of Goods Manufactured [LO2-2, LO2-6, LO2-7]
|
The following cost data relate to the manufacturing activities of Chang Company during the just completed year: |
| Manufacturing overhead costs incurred: | ||
| Indirect materials | $ | 16,200 |
| Indirect labor | 142,000 | |
| Property taxes, factory | 9,200 | |
| Utilities, factory | 82,000 | |
| Depreciation, factory | 169,900 | |
| Insurance, factory | 11,200 | |
| Total actual manufacturing overhead costs incurred | $ | 430,500 |
| Other costs incurred: | ||
| Purchases of raw materials (both direct and indirect) | $ | 412,000 |
| Direct labor cost | $ | 72,000 |
| Inventories: | ||
| Raw materials, beginning | $ | 21,200 |
| Raw materials, ending | $ | 31,200 |
| Work in process, beginning | $ | 41,200 |
| Work in process, ending | $ | 71,200 |
|
The company uses a predetermined overhead rate to apply overhead cost to jobs. The rate for the year was $21 per machine-hour. A total of 20,900 machine-hours was recorded for the year. |
| Required: |
| 1. |
Compute the amount of underapplied or overapplied overhead cost for the year.
|
| 2. |
Prepare a schedule of cost of goods manufactured for the year.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
In: Accounting
Pacific Ink had beginning work-in-process inventory of $1,069,960 on October 1. Of this amount, $459,200 was the cost of direct materials and $610,760 was the cost of conversion. The 63,000 units in the beginning inventory were 30 percent complete with respect to both direct materials and conversion costs.
During October, 132,000 units were transferred out and 45,000 remained in ending inventory. The units in ending inventory were 80 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. Costs incurred during the period amounted to $3,578,400 for direct materials and $4,182,090 for conversion.
Compute the costs of goods transferred out and the ending inventory using the weighted-average method
|
In: Accounting
Pacific Ink had beginning work-in-process inventory of $1,069,960 on October 1. Of this amount, $459,200 was the cost of direct materials and $610,760 was the cost of conversion. The 63,000 units in the beginning inventory were 30 percent complete with respect to both direct materials and conversion costs.
During October, 132,000 units were transferred out and 45,000 remained in ending inventory. The units in ending inventory were 80 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. Costs incurred during the period amounted to $3,578,400 for direct materials and $4,182,090 for conversion.
a-1. Compute the cost of goods transferred out and the cost of ending inventory using the FIFO method.
a-2. Is the ending inventory higher or lower under the weighted-average method compared to FIFO?
Compute the cost of goods transferred out and the cost of ending inventory using the FIFO method
| Cost of goods transferred out | |
| Cost of ending inventory |
Is the ending inventory higher or lower under the weighted-average method compared to FIFO?
In: Accounting
Check out this cost equation for the cost of a cab ride when m miles are driven: C = 5.1 +2.6m. What does the 5.1 represent? What does the 2.6 represent? Solve the equation for m. Put that equation here.
Based on that formula, enter a formula in cell B2 that will give the number of miles that can be driven for the cost shown in cell A2. You will need to use grouping symbols carefully. This equation reverses the original. Here you would enter the dollars and see how many miles you can go. To know that you have the formula correct, the value in B2 should be 0 miles.
| Cost | Miles |
| $5.10 | |
| $10.00 | |
| $15.00 | |
| $20.00 | |
| $25.00 | |
| $30.00 | |
| $35.00 | |
| $40.00 | |
| $45.00 | |
| $50.00 | |
| $55.00 | |
| $60.00 | |
| $65.00 | |
| $70.00 | |
| $75.00 | |
| $80.00 | |
| $85.00 | |
| $90.00 | |
| $95.00 | |
| $100.00 |
In: Physics
Suppose Dan's cost of making pizzas is
C(Q)=4Q+(Q2/40),
and his marginal cost is
MC=4+(Q/20).
Dan is a price taker.
a. What is Dan's supply function?
| Q = 20P - 20 if P ≥ 4.5. | |
| Q = 20P - 80 if P ≥ 4. | |
| Q = 40P + 80 if P ≥ 4. | |
| Q = 20P + 80 if P ≥ 4. | |
| Q = 20P - 40 if P ≥ 4.5. |
b. What if Dan has an avoidable fixed cost of $2.5? What is Dan's
supply function?
| Q = 40P + 20 if P ≥ 4. | |
| Q = 20P - 80 if P ≥ 4.5. | |
| Q = 20P + 80 if P ≥ 4.5. | |
| Q = 20P - 40 if P ≥ 4. | |
| Q = 40P - 80 if P ≥ 4.5. |
In: Economics
Problem 1-24A Cost Classification and Cost Behavior [LO1-1, LO1-2, LO1-3, LO1-4] The Dorilane Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The set enjoys great popularity, and the company has ample orders to keep production going at its full capacity of 4,200 sets per year. Annual cost data at full capacity follow: Direct labor $ 92,000 Advertising $ 99,000 Factory supervision $ 67,000 Property taxes, factory building $ 18,000 Sales commissions $ 65,000 Insurance, factory $ 6,000 Depreciation, administrative office equipment $ 2,000 Lease cost, factory equipment $ 17,000 Indirect materials, factory $ 20,000 Depreciation, factory building $ 108,000 Administrative office supplies (billing) $ 5,000 Administrative office salaries $ 114,000 Direct materials used (wood, bolts, etc.) $ 426,000 Utilities, factory $ 43,000 Required: 1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as variable or fixed with respect to the number of units produced and sold; and second, as a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect.) 2. Compute the average product cost of one patio set. (Round your answer to nearest whole dollar.) 3. Assume that production drops to only 1,000 sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged? Increase Decrease Remain unchanged
In: Accounting