You work for Thunderduck Custom Tables Inc. This is the first month of operations. The company designs and manufactures specialty tables. Each table is specially customized for the customer. This month, you have been asked to develop and manufacture two new tables for customers. You will design and build the tables. This is a no nail, no screw, and no glue manufacturing ( no indirect materials used). You will be keeping track of the costs incurred to manufacture the tables using Job #1 Cost Sheet and Job #2 Cost Sheet.
The cost of the direct materials that can be used to manufacture the table are as follows. These cost are on a per unit basis.
Table Top $1,000.00
Table Leg $ 150.00
Drawer $ 300.00
The company uses a job order costing system and applies manufacturing overhead to jobs based on direct labor hours.
The company estimates that there will be 12 direct labor hours worked during the month.
The estimated manufacturing overhead cost for the month is:
a. Factory supervisor salary per month $ 2,500.00
b. Rent for the factory per month $500.00
c. Depreciation of factory equipment per month $600.00
Total Estimated manufacturing overhead $ 3,600.00
What is the predetermined manufacturing overhead rate?
Step 2 The first order you received was to manufacture a table using a table top and four legs. This is your Job #1.
Step 3 The customer that has ordered Job #2, wants a table that is the same as Job #1, but wants to also add a drawer to the table.
Step 4 The following is a list of transactions that need to be recorded for the company for activity in the month of December. Record those in the "General Journal" tab of the excel file using the proper format. Please use the following accounts: Accounts Receivables, Raw materials, Work in process, Finished goods, Accumulated depreciation, Accounts payable, Salaries and wages payable, Sales revenue, Manufacturing overhead, Cost of goods sold, Salaries and wages expense, Advertising expenses, and Depreciation expense.
1-Dec Raw Materials purchased on account, $10,000.
5-Dec All Raw Materials needed for Job #1 were requisitioned from the material storage for use during the month. Assume all materials are direct. (After you journalize this entry please enter the information into Job #1 Cost Sheet)
10-Dec The following employee costs were incurred but not paid during the month:
There are three assembly employees that spend 2 hours each, $20 per hour to make the table for Job #1. (After you journalize this entry please enter the information into Job #1 Cost Sheet)
Salary for supervisor of the factory $3,000.
Administrative Salary $2,000.
15-Dec All Raw Materials needed for Job #2 were requisitioned from the material storage for use during the month. Assume all materials are direct. (After you journalize this entry please enter the information into Job #2 Cost Sheet)
16-Dec Rent for the month of December for the factory building incurred but not paid $500.
17-Dec Advertising costs incurred but not paid for the month was $1,200.
20-Dec Depreciation for the month of December was recorded on equipment was $750 ($150 for equipment used in the factory and the remainder for equipment used in selling and administrative activities).
22-Dec Manufacturing overhead cost was applied based on direct labor hours to Job #1 based on the POHR determined on the "Job Cost Sheet". (After you journalize this entry please enter the information into Job #1 Cost Sheet)
26-Dec Job #1 was completed and transferred to Finished Goods during the month.
28-Dec The completed table from Job #1 was sold on account to the customer for $15,000 during the month. (Hint: Make sure to account for the cost of the table that was sold using the cost from the job cost sheet.)
31-Dec Direct labor cost incurred but not paid for three employees to start manufacturing Job #2. The employees only worked one hour each, three hours total, $20 per hour during the month and they did not complete their work on the job. (After you journalize this entry please enter the information into Job #2 Cost Sheet)
31-Dec Manufacturing overhead cost was applied based on direct labor hours to Job #2 based on the POHR. Only three direct labor hours were worked on Job #2 during the month. (After you journalize this entry please enter the information into Job #2 Cost Sheet)
31-Dec Any underapplied or overapplied overhead for the month was closed out to Cost of Goods Sold.
Step 5 Post the journal entries that you recorded on the "General Journal" tab to the "T-accounts" tab. This is the company's first month of business, so there will not be any beginning balances. Compute the balance for each T-account after all of the entries have been posted.
Step 6 Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold on the "Schedule of COGM and COGS" tab for Job #1 and Job #2 that were worked on during the month by the company. Make sure to follow the format noted in your book (pg. 87). (Hint: This is the company's first month of operations and therefore the beginning balances will be zero.)
Step 7 Prepare an Income Statement for the month using the Traditional Format on the "Income Statement" tab.
Step 8 Answer the additional questions below
Check Figure: Cost of Goods Manufactured= $3,520, Net operating income=$6,730
What is the ending balance for raw materials?
What is the ending balance for work in process?
What is the ending balance for finished goods?
What is the actual manufacturing overhead cost incurred during December before adjustment?
What is the total applied manufacturing overhead cost during December before adjustment?
What is the unadjusted cost of goods sold?
Was the manufacturing overhead for the month of December overapplied/underapplied ?
What is the amount of Manufacturing overhead overapplied/underapplied?
What is the adjusted cost of goods sold?
What is gross margin?
What is the total prime cost for Job#1?
What is the total conversion cost for job #1?
What is the total product cost for job#1?
What was the period cost incurred for the month of December?
What is the total variable cost incurred for Job #1(assume that all selling and administrative cost and all manufacturing overhead costs are fixed.)?
What is the contribution margin for Job #1 (assume that all selling and administrative cost and all manufacturing overhead costs are fixed.)?
What would be the actual (not applied) total fixed manufacturing overhead cost incurred for the company for the month if the order in Job #1 is for five tables instead of one table assuming this cost is with in the relevant range?
In: Accounting
The Greensboro Performing Arts Center (GPAC) has a total capacity of 8,600 seats: 2,400 center seats, 2,900 side seats, and 3,300 balcony seats. The budgeted and actual tickets sold for a Broadway musical show are as follows:
| Percentage Occupied | |||||||||
| Ticket Price | Budgeted Seats | Actual Seats | |||||||
| Center | $ | 85 | 90 | % | 95 | % | |||
| Side | 75 | 80 | 85 | ||||||
| Balcony | 65 | 85 | 75 | ||||||
The actual ticket prices were the same as those budgeted. Once a show has been booked, the total cost does not vary with the total attendance.
Required:
Compute the following for the show:
3-a. The total sales mix variance.
3-b. The total sales quantity variance.
4. The total sales volume variance.
In: Accounting
NewTech Medical Devices is a medical devices wholesaler that commenced business on June 1, 2019. NewTech Medical Devices purchases merchandise for cash and on open account. In June 2019, NewTech Medical Devices engaged in the following purchasing and cash payment activities:
| DATE | TRANSACTIONS | |
| 2019 | ||
| June | 1 | Issued Check 101 to purchase merchandise, $3,800. |
| 3 |
Purchased merchandise for $1,350 from BioCenter Inc., Invoice 606; terms 2/10, n/30. |
|
| 5 |
Purchased merchandise for $5,150, plus a freight charge of $100, from New Concepts Corporation, Invoice 1011, terms 2/10, n/30. |
|
| 9 |
Paid amount due to BioCenter Inc. for purchase of June 3, less discount, Check 102. |
|
| 10 |
Received Credit Memorandum 227 from New Concepts Corporation for damaged merchandise totaling $350 that was returned; the goods were purchased on Invoice 1011, dated June 5. |
|
| 11 |
Purchased merchandise for $1,610 from BioCenter Inc., Invoice 612; terms 2/10, n/30. |
|
| 14 |
Paid amount due to New Concepts Corporation for Invoice 1011 of June 5, less the return of June 10 and less the cash discount, Check 103. |
|
| 15 |
Purchased merchandise with a list price of $8,500 and trade discounts of 20 percent and 15 percent from Park Research, Invoice 1029, terms n/30. |
|
| 20 | Issued Check 104 to purchase merchandise, $2,300. | |
| 25 |
Returned merchandise purchased on June 20 as defective, receiving a cash refund of $210. |
|
| 30 |
Purchased merchandise for $2,500, plus a freight charge of $78, from New Concepts Corporation, Invoice 1080; terms 2/10, n/30. |
|
Required:
Journalize the transactions in a general journal.
Analyze:
What was the amount of trade discounts received on the June 15
purchase from Park Research?
Issued Check 101 to purchase merchandise, $3,800.
Note: Enter debits before credits.
|
Purchased merchandise for $1,350 from BioCenter Inc., Invoice 606; terms 2/10, n/30.
Note: Enter debits before credits.
|
Purchased merchandise for $5,150, plus a freight charge of $100, from New Concepts Corporation, Invoice 1011, terms 2/10, n/30.
Note: Enter debits before credits.
|
Paid amount due to BioCenter Inc. for purchase of June 3, less discount, Check 102.
Note: Enter debits before credits.
|
Received Credit Memorandum 227 from New Concepts Corporation for damaged merchandise totaling $350 that was returned; the goods were purchased on Invoice 1011, dated June 5.
Note: Enter debits before credits.
|
Purchased merchandise for $1,610 from BioCenter Inc., Invoice 612; terms 2/10, n/30.
Note: Enter debits before credits.
|
Paid amount due to New Concepts Corporation for Invoice 1011 of June 5, less the return of June 10 and less the cash discount, Check 103.
Note: Enter debits before credits.
|
Purchased merchandise with a list price of $8,500 and trade discounts of 20 percent and 15 percent from Park Research, Invoice 1029, terms n/30.
Note: Enter debits before credits.
|
Issued Check 104 to purchase merchandise, $2,300.
Note: Enter debits before credits.
|
Returned merchandise purchased on June 20 as defective, receiving a cash refund of $210.
Note: Enter debits before credits.
Purchased merchandise for $2,500, plus a freight charge of $78, from New Concepts Corporation, Invoice 1080; terms 2/10, n/30. Note: Enter debits before credits.
Analyze What was the amount of trade discounts received on the June 15 purchase from Park Research?
|
In: Accounting
Describe wage determination in a labor market in which workers are unorganized and many firms actively compete for the services of labor. Show this situation graphically, using W1 to indicate the equilibrium wage rate and Q1 to show the number of workers hired by the firms as a group. Show the labor supply curve of the individual firm and compare it with that of the total market. Why are there differences? In the diagram representing the firm, identify total revenue, total wage cost, and revenue available for the payment of non labour resources.
In: Economics
Which of the following is true of the EOQ model? Note that the optimal order quantity, Q*, will be called EOQ.
|
If the annual sales, in units, increases by 10%, then EOQ will increase by 10%. |
||
|
If the average inventory increases by 10%, then the total carrying costs will increase by 10%. |
||
|
If the average inventory increases by 10% the total ordering costs will increase by 10%. |
||
|
At any order quantity below the EOQ, then total carrying costs increase, but ordering costs decrease. |
||
|
If the fixed per order cost increases by 10%, then EOQ will increase by 10%. |
In: Finance
| The following information is from the finanial records of Company ExCost for the year: | |||||
| Total Manufacturing Costs | $ 2,150,000 | ||||
| Cost of Goods Manufactured | $ 2,075,000 | ||||
| Applied Factory Overhead was | 25% of total manufacturing costs | ||||
| Factory Overhead was applied at a rate of | 80% of direct labor costs | ||||
| Work-in-Process Inventory on January 1 was | 75% of Work-in-Process Inventory on Dec 31 | ||||
| What is the carrying value of Work-in-Process Inventories on December 31: | |||||
| What is the total Direct Material Costs for the Year: | |||||
In: Accounting
A company has two warehouses A and B, and three retail outlets 1, 2 and 3. The warehouse capacities, retail outlet demands, and per-unit shipping costs ($) are shown in the table below. Formulate a linear programming (LP) model of this transportation problem with the objective of minimizing total shipping cost.
|
Retail Outlets Warehouses |
1 |
2 |
3 |
Total Supply |
|
A |
$5 |
$8 |
$3 |
500 |
|
B |
$7 |
$4 |
$6 |
250 |
|
Total Demand |
300 |
400 |
250 |
|
In: Operations Management
All questions below rely on the following assumptions:
p=20-0.25Q
MC=8= Average Cost
And what is the total profit?
And what is the total profit?
And what is the total profit?
In: Economics
Activity Availability, Capacity Used, Unused Capacity
Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each agent is paid $30,000 per year and is able to process 3,000 purchase orders. Last year, 13,350 purchase orders were processed by the five agents.
Required:
1. Calculate the activity rate per purchase order.
$ per purchase order
2. Calculate, in terms of purchase orders, the:
| a. | Total activity availability | purchase orders |
| b. | Unused capacity | purchase orders |
3. Calculate the dollar cost of:
| a. | Total activity availability | $ |
| b. | Unused capacity | $ |
4. Express total activity availability in terms
of activity capacity used and unused capacity. Express total
activity availability in terms of activity capacity used and unused
capacity.
Purchase orders
| Total activity availability | Activity capacity used | Unused capacity | ||
| = | + |
Dollars cost
| Total activity availability | Activity capacity used | Unused capacity | ||
| $ | = | $ | + | $ |
5. What if one of the purchasing agents agreed to work half time for $15,000?
a. How many purchase orders could be processed by four and a half purchasing agents?
purchase orders
b. What would unused capacity be in purchase orders?
purchase orders
In: Accounting
Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during the month of August 2018 is available:
| Aug. 1 Inventory on hand - 10,500 units; cost $8.80 each |
| 8 Purchased 30,000 units for $7.50 each |
| 14 Sold 21,000 units for $14.00 each |
| 18 Purchased 16,000 units for $7.00 each |
| 25 Sold 20,000 units for $13.00 each |
| 31 Inventory on hand - 15,500 units |
Required: Determine the inventory balance Altira would report in it's August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using FIFO, LIFO, and the Average Cost method:
| FIFO | COG Available for Sale | COG Sold - Periodic FIFO | Ending Inventory - Periodic FIFO | ||||||
| # of units | Cost per unit | COG Available for Sale | # of units sold | Cost per unit | COG Sold | # of units in ending inventory | Cost per unit | Ending inventory | |
| Beginning Inventory | 10,500 | $8.80 | $92,400 | 10,500 | $8.80 | $92,400 | 0 | $8.80 | 0 |
| Purchases: | |||||||||
| Aug 8 | 30,000 | $7.50 | $225,000 | 30,000 | $7.50 | $225,000 | 0 | $7.50 | 0 |
| Aug 18 | 16,000 | $7.00 | $112,000 | ? | $7.00 | ? | ? | $7.00 | ? |
| Total | 56,500 | $429,400 | ? | ? | ? | ||||
| LIFO | COG Available for Sale | COG Sold - Periodic LIFO | Ending Inventory - Periodic LIFO | ||||||
| # of units | Cost per unit | COG Available for Sale | # of units sold | Cost per unit | COG Sold | # of units in ending inventory | Cost per unit | Ending inventory | |
| Beginning Inventory | 10,500 | $8.80 | $92,400 | 0 | $8.80 | $0 | 10,500 | $8.80 | $92,400 |
| Purchases: | |||||||||
| Aug 8 | 30,000 | $7.50 | $225,000 | ? | $7.50 | ? | ? | $7.50 | ? |
| Aug 18 | 16,000 | $7.00 | $112,000 | 16,000 | $7.00 | $112,000 | 0 | $7.00 | 0 |
| Total | 56,500 | $429,400 | ? | ? | ? | ? | |||
| Average Cost | COG Available for Sale | COG Sold - Average Cost | Ending Inventory - Average Cost | ||||||
| # of units | Cost per unit | COG Available for Sale | # of units sold | Cost per unit | COG Sold | # of units in ending inventory | Cost per unit | Ending inventory | |
| Beginning Inventory | 10,500 | $8.80 | $92,400 | ||||||
| Purchases: | |||||||||
| Aug 8 | 30,000 | $7.50 | $225,000 | ||||||
| Aug 18 | 16,000 | $7.00 | $112,000 | ||||||
| Total | 56,500 | $429,400 | 41,000 | ? | ? | 15,500 | ? | ? | |
In: Accounting