3-35 Predicting Costs
Given the following four cost behaviors and expected levels of cost-driver activity, predict total costs:
1. Fuel costs of driving vehicles, $0.20 per mile, driven 17,000 miles per month
2. Equipment rental cost, $6,000 per piece of equipment per month for seven pieces for three
months
3. Ambulance and EMT personnel cost for a soccer tournament, $1,200 for each 250 tournament participants; the tournament is expecting 2,400 participants
4. Purchasing department cost, $7,500 per month plus $4 per material order processed at 4,000 orders in one month
Click here for the solution: Given the following four cost behaviors and expected levels of cost-driver activity, predict total costs
Showing posts with label Cost. Show all posts
Showing posts with label Cost. Show all posts
Friday, April 15, 2016
Wednesday, April 13, 2016
Allen Labinski has prepared the following list of statements about process cost accounting
E3-1 Allen Labinski has prepared the following list of statements about process cost accounting. Identify each statement as true or false. If false, indicate how to correct the statement.
1. Process cost systems are used to apply costs to similar products that are mass-produced in a continuous fashion.
2. A process cost system is used when each finished unit is indistinguishable from another.
3. Companies that produce soft drinks, motion pictures, and computers chips would all use process cost accounting.
4. In a process cost system, costs are tracked by individual jobs.
5. Job order costing and process costing track different manufacturing costs elements.
6. Both job order costing and process costing account for direct materials, direct labor, and manufacturing overhead.
7. Costs flow through the accounts in the same basic way for both job order costing and process costing.
8. In a process cost system, only one work in process account is used.
9. In a process cost system, costs are summarized in a job cost sheet.
10. In a process cost system, the unit cost is total manufacturing costs for the period divided by the units produced during the period.
NOTE: Fill in the table below with your responses; write correction for false statements below the table:
Click here for the solution: Allen Labinski has prepared the following list of statements about process cost accounting
1. Process cost systems are used to apply costs to similar products that are mass-produced in a continuous fashion.
2. A process cost system is used when each finished unit is indistinguishable from another.
3. Companies that produce soft drinks, motion pictures, and computers chips would all use process cost accounting.
4. In a process cost system, costs are tracked by individual jobs.
5. Job order costing and process costing track different manufacturing costs elements.
6. Both job order costing and process costing account for direct materials, direct labor, and manufacturing overhead.
7. Costs flow through the accounts in the same basic way for both job order costing and process costing.
8. In a process cost system, only one work in process account is used.
9. In a process cost system, costs are summarized in a job cost sheet.
10. In a process cost system, the unit cost is total manufacturing costs for the period divided by the units produced during the period.
NOTE: Fill in the table below with your responses; write correction for false statements below the table:
Click here for the solution: Allen Labinski has prepared the following list of statements about process cost accounting
(Cost of trade credit) Calculate the cost of skipping the discount and paying at the end of the net period for each of the following credit terms
A14. (Cost of trade credit) Calculate the cost of skipping the discount and paying at the end of the net period for each of the following credit terms. Calculate the APR and the APY.
a. 5/10, net 50
b. 3/15, net 30
c. 2/10, net 20
Click here for the solution: Calculate the cost of skipping the discount and paying at the end of the net period for each of the following credit terms
a. 5/10, net 50
b. 3/15, net 30
c. 2/10, net 20
Click here for the solution: Calculate the cost of skipping the discount and paying at the end of the net period for each of the following credit terms
Tuesday, April 12, 2016
At a seminar, a cost accountant spoke on identification of different kinds of cost behavior
3-B1 Identifying Cost Behavior Patterns
At a seminar, a cost accountant spoke on identification of different kinds of cost behavior. Tammy Li, a hospital administrator who heard the lecture, identified several hospital costs of concern to her. After her classification, Li presented you with the following list of costs and asked you to (1) classify their behavior as one of the following: variable, step, mixed, discretionary fixed, committed fixed, and (2) to identify a likely cost driver for each variable or mixed cost.
1. Operating costs of X-ray equipment ($95,000 a year plus $3 per film)
2. Health insurance for all full-time employees
3. Costs incurred by Dr. Rath in cancer research
4. Repairs made on hospital furniture
5. Training costs of an administrative resident
6. Straight-line depreciation of operating room equipment
7. Costs of services of King Hospital Consulting
8. Nursing supervisors’ salaries (a supervisor is needed for each 45 nursing personnel)
Click here for the solution: At a seminar, a cost accountant spoke on identification of different kinds of cost behavior
At a seminar, a cost accountant spoke on identification of different kinds of cost behavior. Tammy Li, a hospital administrator who heard the lecture, identified several hospital costs of concern to her. After her classification, Li presented you with the following list of costs and asked you to (1) classify their behavior as one of the following: variable, step, mixed, discretionary fixed, committed fixed, and (2) to identify a likely cost driver for each variable or mixed cost.
1. Operating costs of X-ray equipment ($95,000 a year plus $3 per film)
2. Health insurance for all full-time employees
3. Costs incurred by Dr. Rath in cancer research
4. Repairs made on hospital furniture
5. Training costs of an administrative resident
6. Straight-line depreciation of operating room equipment
7. Costs of services of King Hospital Consulting
8. Nursing supervisors’ salaries (a supervisor is needed for each 45 nursing personnel)
Click here for the solution: At a seminar, a cost accountant spoke on identification of different kinds of cost behavior
Thursday, November 26, 2015
Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments
1. Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments? (Points : 1)
2. Process costing is used in companies that _______. (Points : 1)
3. A producer of ____ would not use a process costing system. (Points : 1)
4. Equivalent units of production are equal to the _______. (Points : 1)
5. In a process costing system using the weighted average method, cost per equivalent unit for a given cost component is found by dividing which of the following by EUP? (Points : 1)
6. The difference between EUP calculated using FIFO and EUP calculated using weighted average is the equivalent units _______. (Points : 1)
7. In a FIFO process costing system, which of the following are assumed to be completed first in the current period? (Points : 1)
8. The primary difference between the FIFO and weighted average methods of process costing is _______. (Points : 1)
9. In a cost of production report using process costing, transferred-in costs are similar to the ______. (Points : 1)
10. In a process costing system, the journal entry to record the transfer of goods from Department #2 to Finished Goods Inventory is a _______. (Points : 1)
11. Transferred-in cost represents the cost from _______. (Points : 1)
12. A hybrid costing system combines characteristics of _______. (Points : 1)
13. When standard costs are used in process costing, _______. (Points : 1)
14. The cost of abnormal continuous losses is _______. (Points : 1)
15. Normal spoilage units resulting from a continuous process _______. (Points : 1)
16. Listed below are the steps to assign costs to ending inventory using the weighted average method process costing method.
A. Assign the costs to the inventory accounts
B. Calculate the physical units accounted for
C. Calculate the physical units to account for
D. Calculate the equivalent units of production
E. Calculate the total costs to account for
F. Calculate the cost per equivalent units
(Points : 1)
17. Units started and completed during the period equals (Points : 1)
18. In process costing systems, unit costs are found by dividing total costs incurred by (Points : 1)
19. Equivalent units of production using the weighted average method of costing are found using which of the following formulas: (Points : 1)
20. Total costs to account for is: (Points : 1)
Click here for the solution: Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments
2. Process costing is used in companies that _______. (Points : 1)
3. A producer of ____ would not use a process costing system. (Points : 1)
4. Equivalent units of production are equal to the _______. (Points : 1)
5. In a process costing system using the weighted average method, cost per equivalent unit for a given cost component is found by dividing which of the following by EUP? (Points : 1)
6. The difference between EUP calculated using FIFO and EUP calculated using weighted average is the equivalent units _______. (Points : 1)
7. In a FIFO process costing system, which of the following are assumed to be completed first in the current period? (Points : 1)
8. The primary difference between the FIFO and weighted average methods of process costing is _______. (Points : 1)
9. In a cost of production report using process costing, transferred-in costs are similar to the ______. (Points : 1)
10. In a process costing system, the journal entry to record the transfer of goods from Department #2 to Finished Goods Inventory is a _______. (Points : 1)
11. Transferred-in cost represents the cost from _______. (Points : 1)
12. A hybrid costing system combines characteristics of _______. (Points : 1)
13. When standard costs are used in process costing, _______. (Points : 1)
14. The cost of abnormal continuous losses is _______. (Points : 1)
15. Normal spoilage units resulting from a continuous process _______. (Points : 1)
16. Listed below are the steps to assign costs to ending inventory using the weighted average method process costing method.
A. Assign the costs to the inventory accounts
B. Calculate the physical units accounted for
C. Calculate the physical units to account for
D. Calculate the equivalent units of production
E. Calculate the total costs to account for
F. Calculate the cost per equivalent units
(Points : 1)
17. Units started and completed during the period equals (Points : 1)
18. In process costing systems, unit costs are found by dividing total costs incurred by (Points : 1)
19. Equivalent units of production using the weighted average method of costing are found using which of the following formulas: (Points : 1)
20. Total costs to account for is: (Points : 1)
Click here for the solution: Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments
Wednesday, November 25, 2015
If intangible assets are acquired for stock, how is the cost of the intangible determined?
If intangible assets are acquired for stock, how is the cost of the intangible determined?
Click here for the solution: If intangible assets are acquired for stock, how is the cost of the intangible determined?
Click here for the solution: If intangible assets are acquired for stock, how is the cost of the intangible determined?
Tuesday, November 10, 2015
The standard cost card contains quantities and costs for
MULTIPLE CHOICE
1. The standard cost card contains quantities and costs for _______. (Points : 1)
2. A total variance is best defined as the difference between total _______. (Points : 1)
3. The term standard hours allowed measures _______. (Points : 1)
4. Which of the following factors should not be considered when deciding whether to investigate a variance? (Points : 1)
5. A company wishing to isolate variances at the point closest to the point of responsibility will determine its material price variance when ______. (Points : 1)
6. The standard predominantly used in Western cultures for motivational purposes is a(n) ____ standard. (Points : 1)
7. Gallagher Corporation. incurred 2,300 direct labor hours to produce 600 units of product. Each unit should take 4 direct labor hours. Gallagher Corporation applies variable overhead to production on a direct labor hour basis. The variable overhead efficiency variance _______. (Points : 1)
8. A variable overhead spending variance is caused by ________. (Points : 1)
9. McCoy Company has the following information available for October when 3,500 units were produced (round answers to the nearest dollar).
Standards:
Material 3.5 pounds per unit @ $4.50 per pound
Labor 5.0 hours per unit @ $10.25 per hour
Actual:
Material purchased 12,300 pounds @ $4.25
Material used 11,750 pounds
17,300 direct labor hours @ $10.20 per hour
What is the labor rate variance? (Points : 1)
10. McCoy Company has the following information available for October when 3,500 units were produced (round answers to the nearest dollar).
Standards:
Material 3.5 pounds per unit @ $4.50 per pound
Labor 5.0 hours per unit @ $10.25 per hour
Actual:
Material purchased 12,300 pounds @ $4.25
Material used 11,750 pounds
17,300 direct labor hours @ $10.20 per hour
What is the labor efficiency variance? (Points : 1)
11. Joint costs are useful for _______. (Points : 1)
12. Each of the following is a method to allocate joint costs except _______. (Points : 1)
13. When allocating joint process cost based on tons of output, all products will _______. (Points : 1)
14. Scrap is defined as a _______. (Points : 1)
15. Waste created by a production process is _______. (Points : 1)
16. In a lumber mill, which of the following would most likely be considered a primary product? (Points : 1)
17. Fisher Company produces three products from a joint process. The products can be sold at split-off or processed further. In deciding whether to sell at split-off or process further, management should _______. (Points : 1)
18. The split-off point is the point at which _______. (Points : 1)
19. A product may be processed beyond the split-off point if management believes that _______. (Points : 1)
20. Which of the following is a commonly used joint cost allocation method? (Points : 1)
Click here for the solution: The standard cost card contains quantities and costs for
1. The standard cost card contains quantities and costs for _______. (Points : 1)
2. A total variance is best defined as the difference between total _______. (Points : 1)
3. The term standard hours allowed measures _______. (Points : 1)
4. Which of the following factors should not be considered when deciding whether to investigate a variance? (Points : 1)
5. A company wishing to isolate variances at the point closest to the point of responsibility will determine its material price variance when ______. (Points : 1)
6. The standard predominantly used in Western cultures for motivational purposes is a(n) ____ standard. (Points : 1)
7. Gallagher Corporation. incurred 2,300 direct labor hours to produce 600 units of product. Each unit should take 4 direct labor hours. Gallagher Corporation applies variable overhead to production on a direct labor hour basis. The variable overhead efficiency variance _______. (Points : 1)
8. A variable overhead spending variance is caused by ________. (Points : 1)
9. McCoy Company has the following information available for October when 3,500 units were produced (round answers to the nearest dollar).
Standards:
Material 3.5 pounds per unit @ $4.50 per pound
Labor 5.0 hours per unit @ $10.25 per hour
Actual:
Material purchased 12,300 pounds @ $4.25
Material used 11,750 pounds
17,300 direct labor hours @ $10.20 per hour
What is the labor rate variance? (Points : 1)
10. McCoy Company has the following information available for October when 3,500 units were produced (round answers to the nearest dollar).
Standards:
Material 3.5 pounds per unit @ $4.50 per pound
Labor 5.0 hours per unit @ $10.25 per hour
Actual:
Material purchased 12,300 pounds @ $4.25
Material used 11,750 pounds
17,300 direct labor hours @ $10.20 per hour
What is the labor efficiency variance? (Points : 1)
11. Joint costs are useful for _______. (Points : 1)
12. Each of the following is a method to allocate joint costs except _______. (Points : 1)
13. When allocating joint process cost based on tons of output, all products will _______. (Points : 1)
14. Scrap is defined as a _______. (Points : 1)
15. Waste created by a production process is _______. (Points : 1)
16. In a lumber mill, which of the following would most likely be considered a primary product? (Points : 1)
17. Fisher Company produces three products from a joint process. The products can be sold at split-off or processed further. In deciding whether to sell at split-off or process further, management should _______. (Points : 1)
18. The split-off point is the point at which _______. (Points : 1)
19. A product may be processed beyond the split-off point if management believes that _______. (Points : 1)
20. Which of the following is a commonly used joint cost allocation method? (Points : 1)
Click here for the solution: The standard cost card contains quantities and costs for
Holder-Webb Company began operations on January 1, 2005, and uses the average cost method of pricing inventory
E22-2 (Change in Principle—Inventory Methods) Holder-Webb Company began operations on January 1, 2005, and uses the average cost method of pricing inventory. Management is contemplating a change in inventory methods for 2008. The following information is available for the years 2005–2007.
Net Income Computed Using
2005: Average Cost = $15,000 FIFO: $19,000 LIFO: $12,000
2006: Average Cost = $18,000 FIFO: $23,000 LIFO: $14,000
2007: Average Cost= $20,000 FIFO: $25,000 LIFO: $17,000
Instructions
(Ignore all tax effects.)
(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2008.
(b) Determine net income to be reported for 2005, 2006, and 2007, after giving effect to the change in accounting principle.
(c) Assume Holder-Webb Company used the LIFO method instead of the average cost method during the years 2005–2007. In 2008, Holder-Webb changed to the FIFO method. Prepare the journal entry necessary to record the change in principle.
Click here for the solution: Holder-Webb Company began operations on January 1, 2005, and uses the average cost method of pricing inventory
Net Income Computed Using
2005: Average Cost = $15,000 FIFO: $19,000 LIFO: $12,000
2006: Average Cost = $18,000 FIFO: $23,000 LIFO: $14,000
2007: Average Cost= $20,000 FIFO: $25,000 LIFO: $17,000
Instructions
(Ignore all tax effects.)
(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2008.
(b) Determine net income to be reported for 2005, 2006, and 2007, after giving effect to the change in accounting principle.
(c) Assume Holder-Webb Company used the LIFO method instead of the average cost method during the years 2005–2007. In 2008, Holder-Webb changed to the FIFO method. Prepare the journal entry necessary to record the change in principle.
Click here for the solution: Holder-Webb Company began operations on January 1, 2005, and uses the average cost method of pricing inventory
Monday, October 26, 2015
The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2008, the first month of operation
ACC 560 Week 2 Assignment
E3-7 The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2008, the first month of operation.
Production: 12,000 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs.
Manufacturing costs: Materials $33,000; labor $27,000; overhead $36,000.
Prepare a production cost report.
Click here for the solution: The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2008, the first month of operation
E3-7 The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2008, the first month of operation.
Production: 12,000 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs.
Manufacturing costs: Materials $33,000; labor $27,000; overhead $36,000.
Prepare a production cost report.
Click here for the solution: The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2008, the first month of operation
Container Shipping, Inc. is contemplating the use of process costing to track the cost of its operations
ACC 560 Week 2 Assignment
E3-14 Container Shipping, Inc. is contemplating the use of process costing to track the cost of its operations. The operation consists of three segments (departments): receiving, shipping, and delivery. Containers are received at Container's docks and sorted according to the ship they will be carried on. The containers are then loaded onto a ship, which carries them to the appropriate port of destination. The containers are then off-loaded and delivered to the receiving company. Container shipping wants to begin to use process costing in the shipping department. Direct materials represent the fuel costs to run the ship, and "Containers in transit" represents work in process. Listed below is information about the shipping department's first month's activity.
Containers in Transit April 1 0
Containers loaded 800
Containers in Transit April 30 350 40% of direct materials and
30% of conversion costs
Determine the physical flow of containers for the month
Compute the equivalent units for direct materials and conversion costs
Click here for the solution: Container Shipping, Inc. is contemplating the use of process costing to track the cost of its operations
E3-14 Container Shipping, Inc. is contemplating the use of process costing to track the cost of its operations. The operation consists of three segments (departments): receiving, shipping, and delivery. Containers are received at Container's docks and sorted according to the ship they will be carried on. The containers are then loaded onto a ship, which carries them to the appropriate port of destination. The containers are then off-loaded and delivered to the receiving company. Container shipping wants to begin to use process costing in the shipping department. Direct materials represent the fuel costs to run the ship, and "Containers in transit" represents work in process. Listed below is information about the shipping department's first month's activity.
Containers in Transit April 1 0
Containers loaded 800
Containers in Transit April 30 350 40% of direct materials and
30% of conversion costs
Determine the physical flow of containers for the month
Compute the equivalent units for direct materials and conversion costs
Click here for the solution: Container Shipping, Inc. is contemplating the use of process costing to track the cost of its operations
Mabry Manufacturing Company uses a job order cost system in each of its three manufacturing departments
P2-4A Mabry Manufacturing Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K.
In establishing the predetermined overhead rates for 2008 the following estimates were made for the year.
Department
D E K
Manufacturing overhead $1,050,000 $1,500,000 $840,000
Direct labor costs $1,500,000 $1,250,000 $450,000
Direct labor hours 100,000 125,000 40,000
Machine hours 400,000 500,000 120,000
During January, the job cost sheets showed the following costs and production data.
Department
D E K
Direct materials used $140,000 $126,000 $78,000
Direct labor costs $120,000 $110,000 $37,500
Manufacturing overhead incurred $89,000 $124,000 $74,000
Direct labor hours 8,000 11,000 3,500
Machine hours 34,000 45,000 10,400
Required:
a) Compute the predetermined overhead rate for each department
b) Compute the total manufacturing costs assigned to jobs in January in each department
c) Compute the under- or overapplied overhead for each department at January 31
Click here for the solution: Mabry Manufacturing Company uses a job order cost system in each of its three manufacturing departments
In establishing the predetermined overhead rates for 2008 the following estimates were made for the year.
Department
D E K
Manufacturing overhead $1,050,000 $1,500,000 $840,000
Direct labor costs $1,500,000 $1,250,000 $450,000
Direct labor hours 100,000 125,000 40,000
Machine hours 400,000 500,000 120,000
During January, the job cost sheets showed the following costs and production data.
Department
D E K
Direct materials used $140,000 $126,000 $78,000
Direct labor costs $120,000 $110,000 $37,500
Manufacturing overhead incurred $89,000 $124,000 $74,000
Direct labor hours 8,000 11,000 3,500
Machine hours 34,000 45,000 10,400
Required:
a) Compute the predetermined overhead rate for each department
b) Compute the total manufacturing costs assigned to jobs in January in each department
c) Compute the under- or overapplied overhead for each department at January 31
Click here for the solution: Mabry Manufacturing Company uses a job order cost system in each of its three manufacturing departments
Saturday, October 17, 2015
Dacher Company uses a job order cost system
Dacher Company uses a job order cost system. The following data summarize the operations related to production for October:
a. Materials purchased on account, $450,000.
b. Materials requisitioned, $425,000, of which $4,500 was for general factory use.
c. Factory labor used, $385,000, of which $95,000 was indirect.
d. Other costs incurred on account were for factory overhead, $125,400; selling expenses, $87,500; and administrative expenses, $56,400.
e. Prepaid expenses expired for factory overhead were $12,500; for selling expenses, $14,500; and for administrative expenses, $8,500.
f. Depreciation of factory equipment was $25,300; of office equipment, $31,600; and of store equipment, $7,600.
g. Factory overhead costs applied to jobs, $261,500.
h. Jobs completed, $965,000.
i. Cost of goods sold, $952,400.
Journalize the entries to record the summarized operations.
Click here for the solution: Dacher Company uses a job order cost system
a. Materials purchased on account, $450,000.
b. Materials requisitioned, $425,000, of which $4,500 was for general factory use.
c. Factory labor used, $385,000, of which $95,000 was indirect.
d. Other costs incurred on account were for factory overhead, $125,400; selling expenses, $87,500; and administrative expenses, $56,400.
e. Prepaid expenses expired for factory overhead were $12,500; for selling expenses, $14,500; and for administrative expenses, $8,500.
f. Depreciation of factory equipment was $25,300; of office equipment, $31,600; and of store equipment, $7,600.
g. Factory overhead costs applied to jobs, $261,500.
h. Jobs completed, $965,000.
i. Cost of goods sold, $952,400.
Journalize the entries to record the summarized operations.
Click here for the solution: Dacher Company uses a job order cost system
Wednesday, October 14, 2015
Imagen Arquitectonica of Tijuana, Mexico is contemplating a major change in its cost structure
E6-15 Imagen Arquitectonica of Tijuana, Mexico is contemplating a major change in its cost structure. Currently, all of its drafting work is performed by skilled draftsmen. Alfredo Ayala, Imagen's owner, is considering replacing the draftsmen with a computerized drafting system.
However, before making the change Alfredo would like to know the consequences of the change, since the volume of business varies significantly from year to year. Shown below are CVP income statements for each alternative.
Manual System Computerized System
Sales $1,500,000 $1,500,000
Variable costs 1,200,000 600,000
Contribution margin 300,000 900,000
Fixed costs 60,000 660,000
Net income $240,000 $240,000
Instructions
a. Determine the degree of operating leverage for each alternative
b. Which alternative would produce the higher net income if sales increase by $100,000.
c. Using the margin of safety ratio, determine which alternative could sustain the greater decline in sales before operating at a loss.
Click here for the solution: Imagen Arquitectonica of Tijuana, Mexico is contemplating a major change in its cost structure
Manual System Computerized System
Sales $1,500,000 $1,500,000
Variable costs 1,200,000 600,000
Contribution margin 300,000 900,000
Fixed costs 60,000 660,000
Net income $240,000 $240,000
Instructions
a. Determine the degree of operating leverage for each alternative
b. Which alternative would produce the higher net income if sales increase by $100,000.
c. Using the margin of safety ratio, determine which alternative could sustain the greater decline in sales before operating at a loss.
Click here for the solution: Imagen Arquitectonica of Tijuana, Mexico is contemplating a major change in its cost structure
Friday, October 9, 2015
Olsson Video Center accumulates the following cost and market data at December 31
ACC 290 Week 5 Assignment
BE6-7 Olsson Video Center accumulates the following cost and market data at December 31.
Inventory Cost Market
Categories Data Data
Cameras $12,500 $13,400
Camcorders 9,000 9,500
DVDs 13,000 12,200
Compute the lower-of-cost-or-market valuation for Olsson inventory.
Click here for the solution: Olsson Video Center accumulates the following cost and market data at December 31
BE6-7 Olsson Video Center accumulates the following cost and market data at December 31.
Inventory Cost Market
Categories Data Data
Cameras $12,500 $13,400
Camcorders 9,000 9,500
DVDs 13,000 12,200
Compute the lower-of-cost-or-market valuation for Olsson inventory.
Click here for the solution: Olsson Video Center accumulates the following cost and market data at December 31
The cost of equipment purchased by Charleston, Inc., on June 1, 2010 is $89,000
P11-2 (Depreciation for Partial Periods—SL, Act., SYD, and DDB)
The cost of equipment purchased by Charleston, Inc., on June 1, 2010 is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7 years; its total working hours are estimated at 42,000 and its total production is estimated at 525,000 units. During 2010 the machine was operated 6,000 hours and produced 55,000 units. During 2011 the machine was operated 5,500 hours and produced 48,000 units.
Compute depreciation expense on the machine for the year ending December 31, 2010, and the year ending December 31, 2011, using the following methods.
a) Straight-line.
b) Units of output.
c) Working hours.
d) Sum of the years' digits
e) Declining balance (twice the straight-line rate)
Click here for the solution: The cost of equipment purchased by Charleston, Inc., on June 1, 2010 is $89,000
The cost of equipment purchased by Charleston, Inc., on June 1, 2010 is $89,000. It is estimated that the machine will have a $5,000 salvage value at the end of its service life. Its service life is estimated at 7 years; its total working hours are estimated at 42,000 and its total production is estimated at 525,000 units. During 2010 the machine was operated 6,000 hours and produced 55,000 units. During 2011 the machine was operated 5,500 hours and produced 48,000 units.
Compute depreciation expense on the machine for the year ending December 31, 2010, and the year ending December 31, 2011, using the following methods.
a) Straight-line.
b) Units of output.
c) Working hours.
d) Sum of the years' digits
e) Declining balance (twice the straight-line rate)
Click here for the solution: The cost of equipment purchased by Charleston, Inc., on June 1, 2010 is $89,000
Sunday, September 27, 2015
Data pertaining to job cost sheets for Reyes Tool & Die are given in BE15-3 and BE15-4
BE 15-5 Data pertaining to job cost sheets for Reyes Tool & Die are given in BE15-3 and BE15-4. Prepare the job cost sheets for each of the three jobs. (Note: You may omit the column for manufacturing overhead).
Data given in BE15-3 and 15-4:
BE 15-3 In January, Reyes Tool & Die requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,200, Job 3 $700, and general factory use $600.
BE 15-4 During January, time tickets show that the factory labor of $5,000 was used as follows: Job 1 $1,200, Job 2 $1,600 Job 3 $1,400, and general factory use $800.
Click here for the solution: Data pertaining to job cost sheets for Reyes Tool & Die are given in BE15-3 and BE15-4
Data given in BE15-3 and 15-4:
BE 15-3 In January, Reyes Tool & Die requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,200, Job 3 $700, and general factory use $600.
BE 15-4 During January, time tickets show that the factory labor of $5,000 was used as follows: Job 1 $1,200, Job 2 $1,600 Job 3 $1,400, and general factory use $800.
Click here for the solution: Data pertaining to job cost sheets for Reyes Tool & Die are given in BE15-3 and BE15-4
Lasso Corp. budgeted $250,000 of overhead cost for 2008
1) Lasso Corp. budgeted $250,000 of overhead cost for 2008. Actual overhead costs for the year were $240,000. Lasso's plant-wide allocation base, machine hours, was budgeted at 50,000 hours. Actual machine hours were 40,000. Budgeted units to be produced are 100,000 units. Lasso's single plant-wide factory overhead rate for 2008 is
2) Stewart Marketing Inc. manufactures two products, A and B. Presently, the company uses a single Plant-Wide factory overhead rate for allocating overhead to products. From the following information, determine the single-wide factory overhead rate:
Direct Labor
Overhead Hours (dlh) A B
Painting Dept. $248,000 10,000 dlh 16 dlh 4 dlh
Finishing Dept. 72,000 10,000 dlh 4 dlh 16 dlh
Totals $320,000 20,000 dlh 20 dlh 20 dlh
3) The Kaumajet Factory produces two products - small lamps and desk lamps. It has two separate departments - finishing and production. The overhead budget for the finishing department is $550,000, using 500,000 direct labor hours. The overhead budget for the production department is $400,000 using 80,000 direct labor hours. If the budget estimates that a small lamp will require 2 hours of finishing and 1 hours of production, how much factory overhead will be allocated to each unit of small lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours?
4) Stewart Marketing Inc. manufactures two products, A and B. From the following information, determine the overhead from both production departments allocated to each unit of product A if the company uses a multiple department rate system.
Product
Direct Labor
Overhead Hours (dlh) A B
Painting Dept. $248,000 10,000 dlh 16 dlh 4 dlh
Finishing Dept. 72,000 10,000 dlh 4 dlh 16 dlh
Totals $320,000 20,000 dlh 20 dlh 20 dlh
5) It would make sense to use any of the following as an allocation base for calculating factory overhead rates except:
6) Phelan Systems Corporation is estimating activity costs associated with producting disk drives tapes drives, and wire drives. The indirect labor can be traced for four separate activity pools. The budgeted activity cost and activity base information, along with the estimated activity-based information, is provided below.
Procurement $36000 Number of purchased order
Scheduling $240000 Number of production orders
Material handling $48000 Number of moves
Product development $72000 Number of engineering changes
Production $1420000 Machine hours
Disk Drives 4000(# XXXXX purchase orders) 300(# XXXXX production orders) 1400(# XXXXX moves) 10(# XXXXX engineering changes) 2000(machine hours) 2000(# XXXXX units)
Tape drives 2000(# XXXXX purchase orders) 150(# XXXXX production orders) 600(# XXXXX moves) 5(# XXXXX engineering changes) 8000(machine hours) 4000(# XXXXX units)
Wire drive 12000(# XXXXX purchase orders) 800(# XXXXX production orders) 4000(# XXXXX moves) 25(# XXXXX engineering changes) 10000(machine hours) 2500(# XXXXX units)
Determine the activity rate for the procurement per purchase order.
7) The Nite Lite Factory has determined that its budgeted factory overhead budget for the year is $6,750,000 and budgeted direct labor hours are 5,000,000. Using the single plantwide factory overhead rate based on direct labor hours, determine the factory overhead rate for the year.
8) The southwest leather company manufactures leather handbages (H) and moccasins (M). For Simplicity reasons, they have decided to use single plantwide factory overhead rate method to allocate factory overhead. The factory overhead estimated per unit together with materials and direct labor will help determine selling prices. Calculate the amount of factory overhead to be allocated to each unit using direct labor hours.
Handbags =60,000 units 2 hours of direct labor
Moccasins = 40,000 units, 3 hours of direct labor
Total Budgeted factory overhead cost = 360,000
9) Using multiple department factory overhead rates instead of single plant - wide factory overhead rate:
10) Using a Plant-wide factory overhead rate distorts product costs when:
Click here for the solution: Lasso Corp. budgeted $250,000 of overhead cost for 2008
2) Stewart Marketing Inc. manufactures two products, A and B. Presently, the company uses a single Plant-Wide factory overhead rate for allocating overhead to products. From the following information, determine the single-wide factory overhead rate:
Direct Labor
Overhead Hours (dlh) A B
Painting Dept. $248,000 10,000 dlh 16 dlh 4 dlh
Finishing Dept. 72,000 10,000 dlh 4 dlh 16 dlh
Totals $320,000 20,000 dlh 20 dlh 20 dlh
3) The Kaumajet Factory produces two products - small lamps and desk lamps. It has two separate departments - finishing and production. The overhead budget for the finishing department is $550,000, using 500,000 direct labor hours. The overhead budget for the production department is $400,000 using 80,000 direct labor hours. If the budget estimates that a small lamp will require 2 hours of finishing and 1 hours of production, how much factory overhead will be allocated to each unit of small lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours?
4) Stewart Marketing Inc. manufactures two products, A and B. From the following information, determine the overhead from both production departments allocated to each unit of product A if the company uses a multiple department rate system.
Product
Direct Labor
Overhead Hours (dlh) A B
Painting Dept. $248,000 10,000 dlh 16 dlh 4 dlh
Finishing Dept. 72,000 10,000 dlh 4 dlh 16 dlh
Totals $320,000 20,000 dlh 20 dlh 20 dlh
5) It would make sense to use any of the following as an allocation base for calculating factory overhead rates except:
6) Phelan Systems Corporation is estimating activity costs associated with producting disk drives tapes drives, and wire drives. The indirect labor can be traced for four separate activity pools. The budgeted activity cost and activity base information, along with the estimated activity-based information, is provided below.
Procurement $36000 Number of purchased order
Scheduling $240000 Number of production orders
Material handling $48000 Number of moves
Product development $72000 Number of engineering changes
Production $1420000 Machine hours
Disk Drives 4000(# XXXXX purchase orders) 300(# XXXXX production orders) 1400(# XXXXX moves) 10(# XXXXX engineering changes) 2000(machine hours) 2000(# XXXXX units)
Tape drives 2000(# XXXXX purchase orders) 150(# XXXXX production orders) 600(# XXXXX moves) 5(# XXXXX engineering changes) 8000(machine hours) 4000(# XXXXX units)
Wire drive 12000(# XXXXX purchase orders) 800(# XXXXX production orders) 4000(# XXXXX moves) 25(# XXXXX engineering changes) 10000(machine hours) 2500(# XXXXX units)
Determine the activity rate for the procurement per purchase order.
7) The Nite Lite Factory has determined that its budgeted factory overhead budget for the year is $6,750,000 and budgeted direct labor hours are 5,000,000. Using the single plantwide factory overhead rate based on direct labor hours, determine the factory overhead rate for the year.
8) The southwest leather company manufactures leather handbages (H) and moccasins (M). For Simplicity reasons, they have decided to use single plantwide factory overhead rate method to allocate factory overhead. The factory overhead estimated per unit together with materials and direct labor will help determine selling prices. Calculate the amount of factory overhead to be allocated to each unit using direct labor hours.
Handbags =60,000 units 2 hours of direct labor
Moccasins = 40,000 units, 3 hours of direct labor
Total Budgeted factory overhead cost = 360,000
9) Using multiple department factory overhead rates instead of single plant - wide factory overhead rate:
10) Using a Plant-wide factory overhead rate distorts product costs when:
Click here for the solution: Lasso Corp. budgeted $250,000 of overhead cost for 2008
Jones Company had 100 units in beginning inventory at a total cost of $10,000
E6-7 Jones Company had 100 units in beginning inventory at a total cost of $10,000. The company purchased 200 units at a total cost of $26,000. At the end of the year, Jones had 80 units in ending inventory.
Instructions
(a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO, (2) LIFO, and (3) average-cost.
(b) Which cost flow method would result in the highest net income?
(c) Which cost flow method would result in inventories approximating current cost in the balance sheet?
(d) Which cost flow method would result in Jones paying the least taxes in the first year?
Click here for the solution: Jones Company had 100 units in beginning inventory at a total cost of $10,000
Instructions
(a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO, (2) LIFO, and (3) average-cost.
(b) Which cost flow method would result in the highest net income?
(c) Which cost flow method would result in inventories approximating current cost in the balance sheet?
(d) Which cost flow method would result in Jones paying the least taxes in the first year?
Click here for the solution: Jones Company had 100 units in beginning inventory at a total cost of $10,000
Cost-based pricing assumes costs
1. Cost-based pricing assumes costs:
2. The last price a consumer paid or what they expect to pay is their:
3. Marketers of new and innovative products or services are more likely to use a price skimming strategy if:
4. While the manufacturers of the first electric cars charged relatively high prices to innovators and early adopters, they had to use a price skimming strategy because of:
5. The ____________ occurs when firms find the unit cost drops as increased volume is sold.
6. The primary reasons manufacturers offer seasonal discounts to retailers are to more easily plan production schedules and:
7. Mona is selling her artwork at a local festival. Her art is selling well, but t-shirts she had made up with her artwork are not selling. She decides to offer a package price for her art with a t-shirt included. Mona is using:
8. Retailers might offer targeted coupons to loyal customers using kiosk-type technology and ____________.
9. If a telecommunications company drastically cut their price for cellular phone service in order to eliminate local competitors, the company could be charged with:
10. It is the responsibility of ___________________ to determine the ethical approach to setting prices so consumers find value and the firm can make a profit.
11. For a price skimming strategy to work, the product or service must:
12. In addition to merchandise and payments, information flows throughout a supply chain. Which of the following is NOT a good characterization of the flow of information in a supply chain?
13. International supply chains add layers of complexity to the flow of information, merchandise and payments. Neiman Marcus has been able to develop expedited shipments through customs, which gives it an advantage in having the most up-to-date merchandise, by _____________________.
14. Today, when a customer orders merchandise from an online vendor, he or she immediately receives a confirmation message by e-mail. Usually within a day or two, a second message arrives stating that the order is in the mail. This is a type of a(n):
15. If two companies use an electronic data interchange (EDI) to negotiate prices, specify product details, display pictures of new products, and offer sales promotions, the EDI is being used for the ____________ function in the four P's of marketing.
16. An effective CPFR system manages:
17. _______________ have dramatically reduced the time and labor associated with checking and receiving merchandise.
18. At the BMW plant in Spartanburg, South Carolina, suppliers deliver parts every four hours when the plant is in operation and are responsible for removing any packaging or pallets used to deliver their products. BMW uses a ______________ inventory control system.
19. After installing a(n)_______________ in their JIT system, Chocolate Tree, a retail chocolate store, was able to reduce lead time between the recognition that an order needed to be placed and the arrival of the needed merchandise.
20. With more frequent shipments associated with QR systems, a retailer is:
21. RFID offers the participants in the supply chain a powerful tool for tracking inventories and reducing handling. The main reason why it has NOT BEEN more widely adopted is:
22. One of retailers' most fundamental activities is providing the right mix of merchandise and services.
A) True
B) False
23. Retailers like Wal-Mart, Home Depot, and Kroger dictate to their suppliers all of the following EXCEPT:
24. Some companies want to get its products into as many outlets as possible, understanding that the more exposure it gets, the more of its products it will sell. If this is consistent with the company's overall strategy, it will choose __________________.
25. Retailers that offer a broad variety of merchandise, limited services and low prices are known as ______________________.
26. Category killers are also known as:
27. Many retail golf stores have driving ranges, some with visual imaging of famous golf courses. These driving ranges allow:
28. Which of the following retail stores would emphasize personal selling the most as part of the firm's promotional efforts?
29. Traditionally, retailers treated all their customers:
30. Jordan directs her salespeople to increase their "share of wallet." Jordan is directing her salespeople to:
31. Because the Internet offers little opportunity to touch, feel or try on merchandise before purchasing it, on-line retailers must addresses customers' need by ______________.
32. ______________________ is the term used to describe when retailers use some combination of stores, catalogs and the Internet to sell merchandise.
33. Which of the following is NOT one of the reasons a firm might employ electronic channels in multichannel retailing?
34. As the old cliché claims, the three most import things in retailing are:
35. Though a picture may be worth a thousand words, the most important facet of encoding is not what is received but what is sent.
A) True
B) False
36. If there is a difference between the message that is sent and the message that is received, it is probably due to noise.
A) True
B) False
37. Even the best marketing communication can be wasted if the sender does not gain the attention of the consumer.
A) True
B) False
38. "Top-of-mind awareness" is when consumers indicate they know the brand when the name is presented to them.
A) True
B) False
39. Commercial speech is defined as anything contained in a commercial.
A) True
B) False
40. Gerald knows which IMC communication channels are available and knows how he will measure the results of his IMC efforts. To implement his IMC efforts, Gerald also needs to:
41. The right communication channel to use in IMC is:
42. The sender of an IMC message hopes the receiver is:
43. National manufacturers and retailers pay a service company to monitor television ads around the country to ensure that their ads are seen in their entirety during the time frames that had been purchased. This service company helps avoid the IMC noise problem associated with:
44. Which of the following is NOT one of the steps in the AIDA model?
45. The IMC communications process:
46. Integrated marketing communications include all of the following except:
47. New technologies like PDAs, podcasts, and cell phones allow greater potential for ___________________ IMC efforts.
48. Companies can gain a competitive advantage using the Internet to:
49. Research has shown that IMC can make communications expenditures more effective and efficient by:
50. Competitive parity, percentage-of-sales, and affordable budget are types of ________________________ IMC budgeting.
Click here for the solution: Cost-based pricing assumes costs
2. The last price a consumer paid or what they expect to pay is their:
3. Marketers of new and innovative products or services are more likely to use a price skimming strategy if:
4. While the manufacturers of the first electric cars charged relatively high prices to innovators and early adopters, they had to use a price skimming strategy because of:
5. The ____________ occurs when firms find the unit cost drops as increased volume is sold.
6. The primary reasons manufacturers offer seasonal discounts to retailers are to more easily plan production schedules and:
7. Mona is selling her artwork at a local festival. Her art is selling well, but t-shirts she had made up with her artwork are not selling. She decides to offer a package price for her art with a t-shirt included. Mona is using:
8. Retailers might offer targeted coupons to loyal customers using kiosk-type technology and ____________.
9. If a telecommunications company drastically cut their price for cellular phone service in order to eliminate local competitors, the company could be charged with:
10. It is the responsibility of ___________________ to determine the ethical approach to setting prices so consumers find value and the firm can make a profit.
11. For a price skimming strategy to work, the product or service must:
12. In addition to merchandise and payments, information flows throughout a supply chain. Which of the following is NOT a good characterization of the flow of information in a supply chain?
13. International supply chains add layers of complexity to the flow of information, merchandise and payments. Neiman Marcus has been able to develop expedited shipments through customs, which gives it an advantage in having the most up-to-date merchandise, by _____________________.
14. Today, when a customer orders merchandise from an online vendor, he or she immediately receives a confirmation message by e-mail. Usually within a day or two, a second message arrives stating that the order is in the mail. This is a type of a(n):
15. If two companies use an electronic data interchange (EDI) to negotiate prices, specify product details, display pictures of new products, and offer sales promotions, the EDI is being used for the ____________ function in the four P's of marketing.
16. An effective CPFR system manages:
17. _______________ have dramatically reduced the time and labor associated with checking and receiving merchandise.
18. At the BMW plant in Spartanburg, South Carolina, suppliers deliver parts every four hours when the plant is in operation and are responsible for removing any packaging or pallets used to deliver their products. BMW uses a ______________ inventory control system.
19. After installing a(n)_______________ in their JIT system, Chocolate Tree, a retail chocolate store, was able to reduce lead time between the recognition that an order needed to be placed and the arrival of the needed merchandise.
20. With more frequent shipments associated with QR systems, a retailer is:
21. RFID offers the participants in the supply chain a powerful tool for tracking inventories and reducing handling. The main reason why it has NOT BEEN more widely adopted is:
22. One of retailers' most fundamental activities is providing the right mix of merchandise and services.
A) True
B) False
23. Retailers like Wal-Mart, Home Depot, and Kroger dictate to their suppliers all of the following EXCEPT:
24. Some companies want to get its products into as many outlets as possible, understanding that the more exposure it gets, the more of its products it will sell. If this is consistent with the company's overall strategy, it will choose __________________.
25. Retailers that offer a broad variety of merchandise, limited services and low prices are known as ______________________.
26. Category killers are also known as:
27. Many retail golf stores have driving ranges, some with visual imaging of famous golf courses. These driving ranges allow:
28. Which of the following retail stores would emphasize personal selling the most as part of the firm's promotional efforts?
29. Traditionally, retailers treated all their customers:
30. Jordan directs her salespeople to increase their "share of wallet." Jordan is directing her salespeople to:
31. Because the Internet offers little opportunity to touch, feel or try on merchandise before purchasing it, on-line retailers must addresses customers' need by ______________.
32. ______________________ is the term used to describe when retailers use some combination of stores, catalogs and the Internet to sell merchandise.
33. Which of the following is NOT one of the reasons a firm might employ electronic channels in multichannel retailing?
34. As the old cliché claims, the three most import things in retailing are:
35. Though a picture may be worth a thousand words, the most important facet of encoding is not what is received but what is sent.
A) True
B) False
36. If there is a difference between the message that is sent and the message that is received, it is probably due to noise.
A) True
B) False
37. Even the best marketing communication can be wasted if the sender does not gain the attention of the consumer.
A) True
B) False
38. "Top-of-mind awareness" is when consumers indicate they know the brand when the name is presented to them.
A) True
B) False
39. Commercial speech is defined as anything contained in a commercial.
A) True
B) False
40. Gerald knows which IMC communication channels are available and knows how he will measure the results of his IMC efforts. To implement his IMC efforts, Gerald also needs to:
41. The right communication channel to use in IMC is:
42. The sender of an IMC message hopes the receiver is:
43. National manufacturers and retailers pay a service company to monitor television ads around the country to ensure that their ads are seen in their entirety during the time frames that had been purchased. This service company helps avoid the IMC noise problem associated with:
44. Which of the following is NOT one of the steps in the AIDA model?
45. The IMC communications process:
46. Integrated marketing communications include all of the following except:
47. New technologies like PDAs, podcasts, and cell phones allow greater potential for ___________________ IMC efforts.
48. Companies can gain a competitive advantage using the Internet to:
49. Research has shown that IMC can make communications expenditures more effective and efficient by:
50. Competitive parity, percentage-of-sales, and affordable budget are types of ________________________ IMC budgeting.
Click here for the solution: Cost-based pricing assumes costs
Companion Computer Company has been purchasing carrying cases for its portable computers at a delivered cost of $68 per unit
EX 9-6 Companion Computer Company has been purchasing carrying cases for its portable computers at a delivered cost of $68 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 40% of direct labor cost. The fully absorbed unit costs to produce comparable carrying cases are expected to be as follows:
Direct materials $25.00
Direct labor 32.00
Factory overhead (40% of direct labor) $12.80
Total cost per unit $69.80
If Companion Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 15% of the direct labor costs.
a. Prepare a differential analysis report, dated October 11, 2010, for the make-or-buy decision.
b. On the basis of the data presented, would it be advisable to make the carrying cases or to continue buying them?
Click here for the solution: Companion Computer Company has been purchasing carrying cases for its portable computers at a delivered cost of $68 per unit
Direct materials $25.00
Direct labor 32.00
Factory overhead (40% of direct labor) $12.80
Total cost per unit $69.80
If Companion Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 15% of the direct labor costs.
a. Prepare a differential analysis report, dated October 11, 2010, for the make-or-buy decision.
b. On the basis of the data presented, would it be advisable to make the carrying cases or to continue buying them?
Click here for the solution: Companion Computer Company has been purchasing carrying cases for its portable computers at a delivered cost of $68 per unit
Subscribe to:
Posts (Atom)