The following cost data relate to the manufacturing activities of Jako Company during the just completed year: Manufacturing overhead costs incurred: Indirect materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,000 Indirect labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520,000 Property taxes, factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,000 Utilities, factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280,000 Depreciation, factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 960,000 Insurance, factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 Total actual manufacturing overhead costs incurred . . . . . . . . . .. . . $1,892,000 Other costs incurred: Purchases of raw materials (both direct and indirect) . . . . . . . . . . . . $1,600,000 Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $240,000 Inventories: Raw materials, beginning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $80,000 Raw materials, ending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $120,000 Work in process, beginning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160,000 Work in process, ending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $280,000 The company uses a predetermined overhead rate to apply overhead cost to production. The rate for the year was $100 per machine-hour. A total of 77,600 machine-hours were recorded for the year. Required: 1. Prepare a schedule of cost of goods manufactured for the year. 2. Compute the amount of underapplied or overapplied overhead cost for the year. Close it in the Cost of Goods Sold. 3- Prepare a schedule of cost of goods sold for the year, showing the adjusted amount.
In: Accounting
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Superior Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials): |
| Selling expenses | $ | 218,000 | |
| Purchases of raw materials | $ | 264,000 | |
| Direct labor | ? | ||
| Administrative expenses | $ | 159,000 | |
| Manufacturing overhead applied to work in process | $ | 334,000 | |
| Total actual manufacturing overhead costs | $ | 355,000 | |
| Inventory balances at the beginning and end of the year were as follows: |
| Beginning of Year | End of Year | |||||
| Raw materials | $ | 55,000 | $ | 32,000 | ||
| Work in process | ? | $ | 24,000 | |||
| Finished goods | $ | 35,000 | ? | |||
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The total manufacturing costs for the year were $690,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $661,000; and the net operating income was $33,000. The company’s overapplied or underapplied overhead is closed entirely to Cost of Goods Sold. |
| (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.) |
| Required: |
| a. | Prepare a schedule of cost of goods manufactured. |
| b. | Prepare a schedule of cost of goods sold. |
| c. | Prepare an income statement for the year. |
In: Accounting
aughn Manufacturing reported these income statement data for a 2-year period. 2017 2016 Sales revenue $246,700 $190,450 Beginning inventory 43,240 35,100 Cost of goods purchased 211,980 173,640 Cost of goods available for sale 255,220 208,740 Less: Ending inventory 56,720 43,240 Cost of goods sold 198,500 165,500 Gross profit $48,200 $24,950 Vaughn Manufacturing uses a periodic inventory system. The inventories at January 1, 2016, and December 31, 2017, are correct. However, the ending inventory at December 31, 2016, is overstated by $7,770. Prepare correct income statement data for the 2 years. 2016 2017 Sales $ $ Cost of goods sold Beginning inventory Cost of goods purchased Cost of goods available for sale Less: Ending inventory Cost of goods sold Gross profit $ $ LINK TO TEXT What is the cumulative effect of the inventory error on total gross profit for the 2 years? The cumulative effect on total gross profit for the two years is $ . Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT
In: Accounting
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Alexsandar Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials): |
| Selling expenses | $ | 230,000 |
| Purchases of raw materials | $ | 276,000 |
| Direct labor | ? | |
| Administrative expenses | $ | 164,000 |
| Manufacturing overhead applied to work in process | $ | 349,000 |
| Total actual manufacturing overhead costs | $ | 385,000 |
| Inventory balances at the beginning and end of the year were as follows: |
| Beginning of Year | End of Year | |||||
| Raw materials | $ | 65,500 | $ | 31,300 | ||
| Work in process | ? | $ | 35,500 | |||
| Finished goods | $ | 38,300 | ? | |||
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The total manufacturing costs for the year were $698,000; the cost of goods available for sale totaled $738,000; the unadjusted cost of goods sold totaled $669,500; and the net operating income was $45,500. The company’s overapplied or underapplied overhead is closed entirely to cost of goods sold. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.) |
| Required: |
| a. | Prepare a schedule of cost of goods manufactured. |
| b. |
Prepare a schedule of cost of goods sold. |
| c. |
Prepare an income statement for the year. |
In: Accounting
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Superior Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials): |
| Selling Expenses | $214000 |
| Purchases of Raw Materials | 262000 |
| Direct Labor | ? |
| Administrative Expenses | 159000 |
| Manufacturing Overhead Applied to Work in Process | 333000 |
| Total Actual Manufacturing Overhead Costs | 353000 |
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Inventory balances at the beginning and end of the year were as follows:
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In: Accounting
ScholfieldEnterprises makes a variety of products that it sells to other businesses. The company’s activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below:
| Activity Cost Pool | Activity Measure | Activity Rate | ||
| Supporting assembly | Direct labor-hours (DLHs) | $ | 6.55 | per DLH |
| Processing batches | Number of batches | $ | 138.20 | per batch |
| Processing orders | Number of orders | $ | 52.60 | per order |
| Serving customers | Number of customers | $ | 1,191.00 | per customer |
The cost of serving customers, $1,191.00 per customer, is the cost of serving a customer for one year.
Latif Corporation buys only one of the company’s products which ScholfieldEnterprises sells for $15.60per unit. Last year Latif Corporation ordered a total of 1,100units of this product in 2orders. To fill the orders, 7batches were required. The direct materials cost is $7.85per unit and the direct labor cost is $1.90per unit.Each unit requires 0.10DLHs.
According to the ABC system, the total cost of the activity "Processing batches" for this customer this past year was closest to:
In: Accounting
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Superior Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials): |
| Selling expenses | $ | 215,000 | |
| Purchases of raw materials | $ | 262,000 | |
| Direct labor | ? | ||
| Administrative expenses | $ | 157,000 | |
| Manufacturing overhead applied to work in process | $ | 338,000 | |
| Total actual manufacturing overhead costs | $ | 354,000 | |
| Inventory balances at the beginning and end of the year were as follows: |
| Beginning of Year | End of Year | |||||
| Raw materials | $ | 56,000 | $ | 35,000 | ||
| Work in process | ? | $ | 29,000 | |||
| Finished goods | $ | 30,000 | ? | |||
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The total manufacturing costs for the year were $685,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $666,000; and the net operating income was $39,000. The company’s overapplied or underapplied overhead is closed entirely to Cost of Goods Sold. |
| (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.) |
| Required: |
| a. | Prepare a schedule of cost of goods manufactured. |
| b. | Prepare a schedule of cost of goods sold. |
| c. | Prepare an income statement for the year. |
In: Accounting
Cost data for Sandusky Manufacturing Company for the month ended January 31 are as follows:
|
Inventories |
January 1 |
January 31 |
| Materials | $310,000 | $276,600 |
| Work in process | 215,200 | 238,400 |
| Finished goods | 162,800 | 190,100 |
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January 31 |
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| Direct labor | $565,000 |
| Materials purchased during the month | 604,800 |
| Factory overhead incurred during the month: | |
| Indirect labor | 60,440 |
| Machinery depreciation | 35,000 |
| Heat, light, and power | 13,600 |
| Supplies | 8,540 |
| Property taxes | 8,860 |
| Miscellaneous costs | 16,400 |
| Required: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| a. Prepare a cost of goods manufactured statement for January. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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b. Determine the cost of goods sold for January. a. Prepare a cost of goods manufactured statement for January. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
b. Determine the cost of goods sold for January. |
In: Accounting
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:
| Quarter | |||||||||||
| First | Second | Third | Fourth | ||||||||
| Direct materials | $ | 160,000 | $ | 80,000 | $ | 40,000 | $ | 120,000 | |||
| Direct labor | 80,000 | 40,000 | 20,000 | 60,000 | |||||||
| Manufacturing overhead | 230,000 | 206,000 | 194,000 | ? | |||||||
| Total manufacturing costs (a) | $ | 470,000 | $ | 326,000 | $ | 254,000 | $ | ? | |||
| Number of units to be produced (b) | 80,000 | 40,000 | 20,000 | 60,000 | |||||||
| Estimated unit product cost (a) ÷ (b) | $ | 5.88 | $ | 8.15 | $ | 12.70 | $ | ? | |||
Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.
Required:
1. Assuming the estimated variable manufacturing overhead cost per unit is $0.60, what must be the estimated total fixed manufacturing overhead cost per quarter?
2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?
3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?
4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
In: Accounting
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:
| Quarter | |||||||||||
| First | Second | Third | Fourth | ||||||||
| Direct materials | $ | 240,000 | $ | 120,000 | $ | 60,000 | $ | 180,000 | |||
| Direct labor | 80,000 | 40,000 | 20,000 | 60,000 | |||||||
| Manufacturing overhead | 230,000 | 206,000 | 194,000 | ? | |||||||
| Total manufacturing costs (a) | $ | 550,000 | $ | 366,000 | $ | 274,000 | $ | ? | |||
| Number of units to be produced (b) | 120,000 | 60,000 | 30,000 | 90,000 | |||||||
| Estimated unit product cost (a) ÷ (b) | $ | 4.58 | $ | 6.10 | $ | 9.13 | $ | ? | |||
Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.
Required:
1. Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter?
2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?
3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?
4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
In: Accounting