0,000 Property taxes 48,000 Depreciation- equipment 260,000 Maintenance 95,000 Insurance 7,000 Rent - Building 180,000 Required: Compute the predetermined overhead rate for the year Compute the amount of under- or over-applied overhead for the year. Prepare the statement of cost of goods manufactured for the year. Compute the Cost of Goods Sold for the year. (Do not include the under- or over-applied overhead in the cost of goods sold.) What options are available for disposing of under- or over-applied overhead? Job 215 was started and completed during the year. What price would have been charged to customer if the job required $8,500 in direct materials and $2,700 in direct labor cost and the company priced its jobs at 25% above the job’s cost to absorb period cost as well as provide for profit? If direct materials made up $24,000 of the ending work in process inventory balance. How much is the direct labor cost and the manufacturing overhead? Problem #4: Process costing Selzik Company makes super-premium cake mixes that go through two processing departments, Blending and Packaging. The following activity was recorded in the Blending Department during July: Production data: Total Units in process, July 1 (materials 100% complete; conversion 30% complete) 10,000 Units started into Production 170,000 Units complete and transferred to Packaging ? Units in process, July 31 (materials 100% complete; conversion 40% complete) 20,000 Cost data: Work in process inventory, July 1: Materials cost $ 8,500 Conversion cost 4,900 $13,400 Cost added during the month: Materials cost $139,400 Conversion cost 244,200 383,600 Total Cost $397,000 All materials are added at the beginning of work in the Blending Department. Required: Prepare a production report in weighted average method and FIFO method for the Blending Department for July. Use the following 3 steps as a guide in preparing your report: Prepare a quantity schedule and compute the equivalents units Compute the costs per equivalent unit for the month Using the data from (1) and (2) above, prepare a cost reconciliation
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Problem #3:
Gitano Products operates a job-order costing system and applies
|
|
Beginning |
Ending |
|
Raw materials |
$20,000 |
$80,000 |
|
Work in Process |
150,000 |
70,000 |
|
Finished Goods |
260,000 |
400,000 |
|
The following actual costs were incurred during the year:
|
|
|
Purchase of direct raw materials |
$510,000 |
|
Direct labor cost |
90,000 |
|
Manufacturing overhead costs: |
|
|
Indirect labor |
170,000 |
|
Property taxes |
48,000 |
|
|
260,000 |
|
Maintenance |
95,000 |
|
Insurance |
7,000 |
|
Rent - Building |
180,000 |
Required:
- Compute the predetermined overhead rate for the year
- Compute the amount of under- or over-applied overhead for the year.
- Prepare the statement of cost of goods manufactured for the year.
- Compute the Cost of Goods Sold for the year. (Do not include the under- or over-applied overhead in the cost of goods sold.) What options are available for disposing of under- or over-applied overhead?
- Job 215 was started and completed during the year. What price would have been charged to customer if the job required $8,500 in direct materials and $2,700 in direct labor cost and the company priced its jobs at 25% above the
job’s cost to absorb period cost as well as provide for profit? - If direct materials made up $24,000 of the ending work in process inventory balance. How much is the direct labor cost and the manufacturing overhead?
Problem #4:
Selzik Company makes super-premium cake mixes that go through two processing departments, Blending and Packaging. The following activity was recorded in the Blending Department during July:
|
Production data: |
|
Total |
|
Units in process, July 1 (materials 100% complete; conversion 30% complete) |
|
10,000 |
|
Units started into Production |
|
170,000 |
|
Units complete and transferred to Packaging |
|
? |
|
Units in process, July 31 (materials 100% complete; conversion 40% complete) |
|
20,000 |
|
Cost data: |
|
|
|
Work in process inventory, July 1: |
|
|
|
Materials cost |
$ 8,500 |
|
|
Conversion cost |
4,900 |
$13,400 |
|
Cost added during the month: |
|
|
|
Materials cost |
$139,400 |
|
|
Conversion cost |
244,200 |
383,600 |
|
Total Cost |
|
$397,000 |
All materials are added at the beginning of work in the Blending Department.
Required:
Prepare a production report in weighted average method and FIFO method for the Blending Department for July. Use the following 3 steps as a guide in preparing your report:
- Prepare a quantity schedule and compute the equivalents units
- Compute the costs per equivalent unit for the month
- Using the data from (1) and (2) above, prepare a cost reconciliation
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