Palcic Manufacturing Company uses a process cost system. The Molding Department adds materials at the beginning of the process and conversion costs are incurred uniformly throughout the process. Work in process on May 1 was 75% complete and work in process on May 31 was 40% complete.

Instructions

Part A: Complete the Production Cost Report for the Molding Department for the month of May using the above information and the information below.

PALCIC MANUFACTURING COMPANY

Molding Department

Production Cost Report

For the Month Ended May 31, 2018

                                                                                                                Equivalent Units             

QUANTITIES                                Physical Units                   Materials             Conversion Costs

Units to be accounted for

      Work in process, May 1                    16,000

      Started into production                      50,000

Total units                                               66,000

Units accounted for

      Transferred out                                ______                       _______                       _______

      Work in process, May 31                  20,000                       _______                       _______                                                 

Total units                                              ______                       _______                       _______                                                                                           

COSTS

Unit costs                                                      Materials         Conversion Costs              Total     

      Costs in May                                             $198,000                $135,000                $333,000

      Equivalent units                                        ______                    _______                  _______                                                        

      Unit costs                                                $______                  $______                  $  ______           

Costs to be accounted for

      Work in process, May 1                                                                                          $ 83,000

      Started into production**                                                                                        250,000

Total costs                                                                                                                 $333,000

Cost Reconciliation Schedule

Costs accounted for

      Transferred out to assembly department                                                                $

      Work in process, May 31

            Materials                                                                            $

            Conversion costs                                                                ______                        ______                      

Total costs                                                                                                                                      $______ .          

Part B: journalize all the transactions from above (current period manufacturing costs and transfer to next department – Packaging Department in this case).

**NOTE: Started into production costs (current period costs) breakdown as follows

Material costs: $85,000      Direct Labor: $100,000           Manufacturing Overhead: $65,000

The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

Each unit requires 0.25 direct labor-hours and direct laborers are paid $12.00 per hour.

In addition, the variable manufacturing overhead rate is $1.70 per direct labor-hour. The fixed manufacturing overhead is $84,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $24,000 per quarter.

Required:

1. Calculate the company’s total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced.

2&3. Calculate the company’s total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole

2&3

Calculate the company’s total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the the upcoming fiscal year and for the year as a whole.

Mello Manufacturing Company is a diversified manufacturer that manufactures three products (Alpha, Beta, and Omega) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows:

The activity bases identified for each activity are as follows:

The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows:

Each product requires 40 minutes per unit of machine time.

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3. Why aren’t the activity unit costs equal across all three products since they require the same machine time per unit?

The difference is due to product cost distortions.

The difference is because the products consume many activities in ratios different from the volume.

The difference is due to machine inefficiencies.

Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments—Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):

Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month. For questions 10- 16 assume that Sweeten Company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments and Job P included 20 units and Job Q included 30 units. For questions 10-15, assume that the company uses a plantwide predetermined overhead rate with machine-hours as the allocation base.

9.What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department? Molding - Fabrication-

10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q?

JOB P -

JOB Q -

11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q?

JOB P -

JOB Q -

12. What was the total manufacturing cost assigned to Job P?

13. If Job P included 20 units, what was its unit product cost?

14. What was the total manufacturing cost assigned to Job Q?

15. If Job Q included 30 units, what was its unit product cost?

16. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis?

JOB P -

JOB Q -

Answer the question below based on the following scenario:

A company has $1,000,000 in annual sales and the owner pays himself 100% of profits. The cost-of-goods-sold is $900,000. The company manufactures 9,000 units each year. The present defect rate is about 3%. Assume that the price/unit is based on this information and is equal in each of the scenarios.

Also, 1) the cost/unit is calculated by dividing the number of saleable units by the total cost of goods sold and, 2) the price is assumed to remain at the same rate as the units are being sold at in the current situation.

Complete the blank cells and answer the question.

Question:   What is the price per unit taking into account to the defect rate which results in no sale?

Klumper Corporation is a diversified manufacturer of industrial goods. The company’s activity-based costing system contains the following six activity cost pools and activity rates:

Activity data have been supplied for the following two products:

Determine the total overhead cost that would be assigned to each of the products listed above in the activity-based costing system.

Burnt Ham Company uses the weighted-average method in its process costing system. The Curing Department of Burnt Company reported the following information for the month of November:

Beginning work in process: 30% complete for materials, and 80% complete for conversion.

Ending work in process: 40% complete for materials, and 70% complete for conversion.

Prepare a Production Report for the company’s November production using the weighted-average method. You will need to include the following:

A)Units to account for.

B)The equivalent units of production for materials and conversion.

C)The cost per equivalent unit for materials and conversion. (Round to three decimals. There will be a small final rounding error).

D)The total cost assigned to units transferred out of the Curing Dept. during November (costs must be in dollars and cents).

E)The total cost of the work in process inventory on November 30 (costs must be in dollars and cents).

F)A cost reconciliation.