ABC Company uses a job order cost system with overhead applied to products on the basis of machine hours. For the upcoming year, the company estimated its total manufacturing overhead cost at $259,530 and total machine hours at 63,300. During the first month of operations, the company worked on three jobs and recorded the following actual direct materials cost, direct labor cost, and machine hours for each job:    

Job 101 was completed and sold for $51,700.
Job 102 was completed but not sold.
Job 103 is still in process.

Actual overhead costs recorded during the first month of operations totaled $14,770.

Required:

1. Prepare a journal entry showing the transfer of Job 102 into Finished Goods Inventory upon its completion.

2. Prepare the journal entries to recognize the sales revenue and cost of goods sold for Job 101.

3. Prepare the journal entry to transfer the balance of the Manufacturing Overhead account to Cost of Goods Sold.

(If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round your intermediate calculations.)

The following table provides incomplete information on the costs of producing diagnostic imaging tests. It uses two inputs to produce its outputs: capital and labour. The fixed capital costs reflect the monthly leasing cost for the diagnostic imaging machine and the variable labour costs reflects the wages and hours worked by staff.

Assume that the firm is operating in a perfectly competitive market. Also assume that its fixed costs are sunk costs (i.e. it cannot recuperate these costs even if it decides to leave the market.

1. Complete all empty cells in the table above

2. Provide a brief explanation of why the marginal costs could exhibit the pattern you observe in part (a).

3. Add three columns to the table above headed: (i) marginal revenue; (ii) total revenue; and (iii) profit. If the market price was $40, complete all new columns in the table over the output range of 0 to 10

4. If the market price was $40, what would be the optimum level of production for the firm? Why?

Required 1. Olmo, Inc., manufactures and sells two products: Product K0 and Product H9. The annual production and sales of Product of K0 is 700 units and of Product H9 is 700 units. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

The overhead applied to each unit of Product K0 under activity-based costing is closest to?

Required 2. Olmo, Inc., manufactures and sells two products: Product T8 and Product P4. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

The total overhead applied to Product P4 under activity-based costing is closest to?

Han Products manufactures 25,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is:

   
An outside supplier has offered to sell 25,000 units of part S-6 each year to Han Products for $49.00 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $707,500. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier.

Required:

1. Calculate the per unit and total relevant cost for buying and making the product. (Round your "per unit" answers to 2 decimal places.)

2. How much will profits increase or decrease if the outside supplier’s offer is accepted?

Statement of Cost of Goods Manufactured for a Manufacturing Company

Cost data for Sandusky Manufacturing Company for the month ended January 31 are as follows:

a. Prepare a cost of goods manufactured statement for January.

b. Determine the cost of goods sold for January.

On April 30, the end of the first month of operations, Joplin Company prepared the following income statement, based on the absorption costing concept:

If the fixed manufacturing costs were $12,408 and the fixed selling and administrative expenses were $5,580, prepare an income statement according to the variable costing concept. Round all final answers to whole dollars.

Exercise 4A-9 Equivalent Units; Equivalent Units of Production; Assigning Costs-FIFO Method [LO4-6, LO4-7, LO4-8]

Jarvene Corporation uses the FIFO method in its process costing system. The following data are for the most recent month of operations in one of the company’s processing departments:

The cost of beginning inventory according to the company’s costing system was $7,831 of which $4,849 was for materials and the remainder was for conversion cost. The costs added during the month amounted to $175,274. The costs per equivalent unit for the month were:

Required:

1. Compute the total cost per equivalent unit for the month.

2. Compute the equivalent units of material and conversion in the ending inventory.

3. Compute the equivalent units of material and conversion that were required to complete the beginning inventory.

4. Compute the number of units started and completed during the month.

5. Compute the cost of ending work in process inventory for materials, conversion, and in total for the month.

6. Compute the cost of the units transferred to the next department for materials, conversion, and in total for the month.

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows:

Barley Hopp had the following actual results last year:

Required:
1. Calculate the direct materials price, quantity, and total spending variances for Barley Hopp.
2. Calculate the direct labor rate, efficiency, and total spending variances for Barley Hopp.
3. Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp.

1.

2.

3.