Job order cost; journal entries; ending work in process; inventory analysis
Problem 1-8 Ramirez Company manufactures goods to special order and uses a job order cost system. During its first month of operations, the following selected transactions took place:
a. Materials purchased on account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $37,000
b. Materials issued to the factory:
Job 101 $ 2,200
Job 102 5,700
Job 103 7,100
Job 104 1,700
For general use in the factory 1,350
c. Factory wages and salaries earned:
Job 101 $ 2,700
Job 102 6,800
Job 103 9,200
Job 104 2,100
For general work in the factory 2,250
d. Miscellaneous factory overhead costs on account . . . . . . . . . . . . . . . $ 2,400
e. Depreciation of $2,000 on the factory machinery recorded.
f. Factory overhead allocated as follows:
Job 101 $ 1,200
Job 102 2,000
Job 103 3,800
Job 104 1,000
g. Jobs 101, 102, and 103 completed.
h. Jobs 101 and 102 shipped to the customer and billed at $30,900.
Required:
1. Prepare a schedule reflecting the cost of each of the four jobs.
2. Prepare journal entries to record the transactions. (One control account is used for Work in Process.)
3. Compute the ending balance in Work in Process.
4. Compute the ending balance in Finished Goods.
Click here for the solution: Ramirez Company manufactures goods to special order and uses a job order cost system
Showing posts with label goods. Show all posts
Showing posts with label goods. Show all posts
Sunday, August 23, 2015
Saturday, August 22, 2015
Hickory Home Company manufactures and sells two lines of furniture, case goods and upholstery
MULTIPLE CHOICE
1. Which of the following statements is true? (Points : 2)
2. Which of the following is not a possible commonly used term for costs that can be eliminated by taking a specified course of action? (Points : 2)
3. Hickory Home Company manufactures and sells two lines of furniture, case goods and upholstery. During the most recent accounting period, the Case Goods and Upholstery Divisions sold 15,000 and 2,000 units, respectively. The company's most recent financial statements are shown below:
Case Goods Division Upholstery Division
Sales $800,000 $200,000
Less: cost of goods sold:
Unit-level production cost 620,000 150,000
Gross margin 180,000 50,000
Less: operating expenses:
Unit-level selling and admin.expense 30,000 25,000
Corporate-level facility exp. (fixed) 26,000 26,000
Net income (loss) $124,000 $ (1,000)
If unit sales for both divisions increased 10%, the company would report which of the following? (Points : 2)
4. Select the correct statement regarding relevant costs and revenues. (Points : 2)
5. Home Safety Products currently outsources an electrical switch that is a component in its sprinkler systems. The switches are purchased for $12 each. The company is considering making the switches internally and has conducted a study to determine what the cost would be. Below are projected annual costs:
Unit-level costs $ 8
Batch-level costs per year $15,000
Product-level costs per year $10,000
Allocated facility-level costs $20,000
The company needs 10,000 of the switches each year. If Home Safety decides to make the parts under these conditions, the relevant cost per unit will be: (Points : 2)
6. Centennial Tours is trying to decide which one of two tours it will introduce. The costs and revenues associated with each alternative are listed below:
Tour A Tour B
Projected revenue $7,000 $11,000
Variable costs 1,000 6,000
Fixed costs 3,000 3,000
Profit $3,000 $1,000
What are the incremental (differential) costs of Tour B? (Points : 2)
7. For purposes of decision making, avoidable costs are costs that: (Points : 2)
8. Expected future revenues that differ among the alternatives under consideration are referred to as: (Points : 2)
9. Which of the following costs generally is an example of a product-level cost? (Points : 2)
10. Brannon Company plans to add a new item to its product line. Two possible products are under consideration. Each unit of Product A costs $12 to produce and has a contribution margin of $6, while each unit of Product B costs twice as much and has a contribution margin of $8. What is the differential revenue for this decision? (Points : 2)
11. Planning concerned with long-range decisions such as defining the scope of the business is referred to as: (Points : 2)
12. Expressing plans for a business in financial terms is commonly called: (Points : 2)
13. Select the incorrect statement about budgeting and human behavior. (Points : 2)
14. Which of the following budgets or schedules uses data contained in the selling and administrative expense budget? (Points : 2)
15. Which of the following is not a budgeted financial statement? (Points : 2)
16. Which of the following items will not appear on a cash budget? (Points : 2)
17. Select the incorrect statement. (Points : 2)
18. Maddon Company estimated that its inventory purchases for January and February 2010 would be $300,000 and $370,000, respectively. The company generally pays for 60% of its inventory purchases in the month of purchase because it receives a 2% discount for timely payment. The remaining 40% of purchases are paid for in the following month, and there is no discount for these payments. What will be the amount of cash payments for inventory in February 2010? (Points : 2)
19. The budgeting process that involves adding a month to the end of the budget period at the end of each month, thus maintaining a twelve-month planning horizon, is referred to as: (Points : 2)
20. Select the correct equation format for the purchases budget. (Points : 2)
Click here for the solution: Hickory Home Company manufactures and sells two lines of furniture, case goods and upholstery
1. Which of the following statements is true? (Points : 2)
2. Which of the following is not a possible commonly used term for costs that can be eliminated by taking a specified course of action? (Points : 2)
3. Hickory Home Company manufactures and sells two lines of furniture, case goods and upholstery. During the most recent accounting period, the Case Goods and Upholstery Divisions sold 15,000 and 2,000 units, respectively. The company's most recent financial statements are shown below:
Case Goods Division Upholstery Division
Sales $800,000 $200,000
Less: cost of goods sold:
Unit-level production cost 620,000 150,000
Gross margin 180,000 50,000
Less: operating expenses:
Unit-level selling and admin.expense 30,000 25,000
Corporate-level facility exp. (fixed) 26,000 26,000
Net income (loss) $124,000 $ (1,000)
If unit sales for both divisions increased 10%, the company would report which of the following? (Points : 2)
4. Select the correct statement regarding relevant costs and revenues. (Points : 2)
5. Home Safety Products currently outsources an electrical switch that is a component in its sprinkler systems. The switches are purchased for $12 each. The company is considering making the switches internally and has conducted a study to determine what the cost would be. Below are projected annual costs:
Unit-level costs $ 8
Batch-level costs per year $15,000
Product-level costs per year $10,000
Allocated facility-level costs $20,000
The company needs 10,000 of the switches each year. If Home Safety decides to make the parts under these conditions, the relevant cost per unit will be: (Points : 2)
6. Centennial Tours is trying to decide which one of two tours it will introduce. The costs and revenues associated with each alternative are listed below:
Tour A Tour B
Projected revenue $7,000 $11,000
Variable costs 1,000 6,000
Fixed costs 3,000 3,000
Profit $3,000 $1,000
What are the incremental (differential) costs of Tour B? (Points : 2)
7. For purposes of decision making, avoidable costs are costs that: (Points : 2)
8. Expected future revenues that differ among the alternatives under consideration are referred to as: (Points : 2)
9. Which of the following costs generally is an example of a product-level cost? (Points : 2)
10. Brannon Company plans to add a new item to its product line. Two possible products are under consideration. Each unit of Product A costs $12 to produce and has a contribution margin of $6, while each unit of Product B costs twice as much and has a contribution margin of $8. What is the differential revenue for this decision? (Points : 2)
11. Planning concerned with long-range decisions such as defining the scope of the business is referred to as: (Points : 2)
12. Expressing plans for a business in financial terms is commonly called: (Points : 2)
13. Select the incorrect statement about budgeting and human behavior. (Points : 2)
14. Which of the following budgets or schedules uses data contained in the selling and administrative expense budget? (Points : 2)
15. Which of the following is not a budgeted financial statement? (Points : 2)
16. Which of the following items will not appear on a cash budget? (Points : 2)
17. Select the incorrect statement. (Points : 2)
18. Maddon Company estimated that its inventory purchases for January and February 2010 would be $300,000 and $370,000, respectively. The company generally pays for 60% of its inventory purchases in the month of purchase because it receives a 2% discount for timely payment. The remaining 40% of purchases are paid for in the following month, and there is no discount for these payments. What will be the amount of cash payments for inventory in February 2010? (Points : 2)
19. The budgeting process that involves adding a month to the end of the budget period at the end of each month, thus maintaining a twelve-month planning horizon, is referred to as: (Points : 2)
20. Select the correct equation format for the purchases budget. (Points : 2)
Click here for the solution: Hickory Home Company manufactures and sells two lines of furniture, case goods and upholstery
Friday, August 14, 2015
Bumper Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 1.5/15, net 40
Bumper Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 1.5/15, net 40. If the firm chooses to pay on time but does not take the discount, assuming a 365 day-year, what is the
a. nominal interest cost for passing up (not taking) the credit
b. effective annual percentage cost of its non-free trade credit
Click here for the solution: Bumper Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 1.5/15, net 40
a. nominal interest cost for passing up (not taking) the credit
b. effective annual percentage cost of its non-free trade credit
Click here for the solution: Bumper Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 1.5/15, net 40
Saturday, August 1, 2015
Swift Corp., a capital goods manufacturing business that started on January 4, 2010, and operates on a calendar-year basis
E18-15 (Installment-Sales Method and Cost-Recovery Method) Swift Corp., a capital goods manufacturing business that started on January 4, 2010, and operates on a calendar-year basis, uses the installment sales method of profit recognition in accounting for all its sales. The following data were taken from the 2010 and 2011 records.
2010 2011
Installment sales $480,000 $620,000
Gross profit as a percent of costs 25% 28%
Cash collections on sales of 2010 $130,000 $240,000
Cash collections on sales of 2011 –0– $160,000
The amounts given for cash collections exclude amounts collected for interest charges.
Instructions
(a) Compute the amount of realized gross profit to be recognized on the 2011 income statement, prepared using the installment-sales method.
(b) State where the balance of Deferred Gross Profit would be reported on the financial statements for 2011.
(c) Compute the amount of realized gross profit to be recognized on the income statement, prepared using the cost-recovery method.
Click here for the solution: Swift Corp., a capital goods manufacturing business that started on January 4, 2010, and operates on a calendar-year basis
2010 2011
Installment sales $480,000 $620,000
Gross profit as a percent of costs 25% 28%
Cash collections on sales of 2010 $130,000 $240,000
Cash collections on sales of 2011 –0– $160,000
The amounts given for cash collections exclude amounts collected for interest charges.
Instructions
(a) Compute the amount of realized gross profit to be recognized on the 2011 income statement, prepared using the installment-sales method.
(b) State where the balance of Deferred Gross Profit would be reported on the financial statements for 2011.
(c) Compute the amount of realized gross profit to be recognized on the income statement, prepared using the cost-recovery method.
Click here for the solution: Swift Corp., a capital goods manufacturing business that started on January 4, 2010, and operates on a calendar-year basis
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