Maxey & Sons manufactures two types of storage cabinets—Type A and Type B—and applies manufacturing overhead to all units at the rate of $116 per machine hour. Production information follows.

The controller, who is studying the use of activity-based costing, has determined that the firm’s overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities’ three respective cost drivers, follow.

The firm’s total overhead of $12,951,400 is subdivided as follows: manufacturing setups, $2,825,760; machine processing, $7,770,840; and product shipping, $2,354,800.

Required:

1. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using the company’s current overhead costing procedures.

2. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using activity-based costing.

3. Is the cost of the Type A storage cabinet overstated or understated (i.e., distorted) by the use of machine hours to allocate total manufacturing overhead to production? By how much?

4. Assume that the current selling price of a Type A storage cabinet is $341.00 and the marketing manager is contemplating a $39 discount to stimulate volume. Is this discount advisable?

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

Barley Hopp had the following actual results last year:

Required:
a. Calculate the direct materials price, quantity, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable and "U" for unfavorable.)



b. Calculate the direct labor rate, efficiency, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable and "U" for unfavorable.)



c. Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable/Overapplied and "U" for unfavorable/underapplied.)

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.

Milden Company is a merchandiser that plans to sell 25,000 units during the next quarter at a selling price of $52 per unit. The company also gathered the following cost estimates for the next quarter:

Required:

1. Prepare a contribution format income statement for the next quarter.

2. Prepare a traditional format income statement for the next quarter.

Prepare a contribution format income statement for the next quarter.

Maxey & Sons manufactures two types of storage cabinets—Type A and Type B—and applies manufacturing overhead to all units at the rate of $124 per machine hour. Production information follows.

The controller, who is studying the use of activity-based costing, has determined that the firm’s overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities’ three respective cost drivers, follow.

The firm’s total overhead of $14,799,400 is subdivided as follows: manufacturing setups, $3,228,960; machine processing, $8,879,640; and product shipping, $2,690,800.

Required:

1. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using the company’s current overhead costing procedures.

2. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using activity-based costing.

3. Is the cost of the Type A storage cabinet overstated or understated (i.e., distorted) by the use of machine hours to allocate total manufacturing overhead to production? By how much?

4. Assume that the current selling price of a Type A storage cabinet is $369.50 and the marketing manager is contemplating a $41 discount to stimulate volume. Is this discount advisable?

Accessory World makes floor mats for the automobile industry. Finished sets of mats must pass through two departments: Cutting and Coating. Large sheets of synthetic material are cut to size in the Cutting Department and then transferred to the Coating Department, where each set is sprayed with a chemical coating for improved durability. The following information pertains to May activity in the Cutting department:

Cost data:

Total cost of beginning inventory on May 1 . . . . . . . . . . . .. . . . . . . . . . . $ 44,800

Direct materials costs incurred in May . . . . . . . . . . . . . . . . . . . . . . . . . . .   200,000

Conversion costs incurred in May   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     87,200

Physical units data:

Units in process, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .       8,000 sets

Units started in May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     50,000 sets

Units in process, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .     10,000 sets

Percentage of completion data:

Direct materials, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          100%

Conversion, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            80

Direct materials, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          100%

Conversion, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            20

1. Prepare a schedule showing: (1) the number of mat sets transferred from the Cutting Department to the Coating Department in May, and (2) the number of mat sets started and completed by the Cutting Department in May.

2. Compute the equivalent units of input resources for the Cutting Department in May.

3. Compute the cost per equivalent unit of input resource for the Cutting Department in May.

4. Determine the total cost transferred out and prepare the summary journal entry required to transfer the cost of completed mat sets from the Cutting Department to the Coating Department in May.

5. Compute the total cost assigned to the Cutting Department’s ending inventory on May 31.

Can someone post a clean and organized excel version w/ the journal entries as well for the Weight Average AND FIFO solutions. Please!

The Company uses a single department production process. Materials are added at the start of the production process and labor and overhead are added as indicated. For January 2018, the Company records have the following information:

UNITS:
Beginning WIP:                                                                                                          10,000 units

100% complete for materials, 50% complete for labor; 3% complete for overhead

Units started in process                                                                                               50,000 units

Units completed                                                                                                          49,000 units

Ending WIP:                                                                                                             11,000 units

100% complete for materials, 60% complete for labor; 20% complete for overhead

PRODUCTION COSTS:

Work in Process, Beginning of the Month:
Materials                                          $ 22,000
Labor                                                   18,000
Overhead                                             11,000                                                          51,000

Current Month Costs:
Materials                                          $ 320,000
Labor                                                   180,160
Overhead                                             152,840                                    653,000

                                    Total Costs:                        $                                  704,000

REQUIRED:

Prepare a Cost of Production Summary using the weighted average method (calculations for equivalent units of production, cost per equivalent unit of production, total cost for units completed and WIP, ending). Prepare your calculations for Materials, Labor, and Overhead separately.  Prepare the appropriate journal entries at month end.

Prepare a Cost of Production Summary using the FIFO method (calculations for equivalent units of production, cost per equivalent unit of production, total cost for WIP, beginning, units started and completed and WIP, ending). Prepare your calculations for Materials, Labor, and Overhead separately.  Prepare the appropriate journal entries at month end.

Hello team, I will cut and paste this:

Nation’s Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firm’s controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm’s equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y = a + bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows:

Variable Cost Per Unit = Difference in Total Cost

                                             Difference in Hours

                                    = $4882 - $2750 = 2132

                                    = 530 – 270 =         260

2132/260= 8.2 PER UNIT

FIXED COST = Total Costs – Variable Costs

= $4882 – ($8.20 x 530)

= $4882 – 4346

= 536

My question is, in order to figure this out at 630 hours of activity, do I do the same work above and just use 630 instead of 530?

Cooper Ltd. has 2 operating divisions: domestic sales and international sales.  They also have 2 support divisions: accounting support and human resources support. For the past year, Cooper’s cost records show the following information:

Required:

1. Allocate the 2 support divisions’ costs to the operating divisions using the Direct Method.
2. Allocate the 2 support divisions’ costs to the operating divisions using the Reciprocal Method.
3. Allocate the 2 support divisions’ costs to the operating divisions using the Step Down Method – Allocate Accounting Support first.
4. What method do you recommend and why?
5. Cooper Ltd. would like to share the services of a consultant with another company, Hofstadter Inc.  The consultant will work a total of 1,000 hours for both companies: 700 for Cooper and 300 hours for Hofstadter Inc.  The total cost of the contract will be $368,000.  If Cooper were to contract directly with the consultant for 700 hours, the cost would have been $350,000. If Hofstadter were to contract directly with the consultant, the contract would have cost them $ 150,000. How should the companies divide up the cost of the consultant?