%24 %24 %24 3. 3oration haS the following Information for the month of March. Cost of materials used in production $19,369 Direct labor 26,541 Factory overhead 37,168 Work in process inventory, March 1 22,586 Work in process inventory, March 31 19,023 Finished goods inventory, March 1 23,026 Finished goods inventory, March 31 27,299 a. Determine the cost of goods manufactured. b. Determine the cost of goods sold. earch al 43°F 2) 114

%24 %24 %24 3. 3oration haS the following Information for the month of March. Cost of materials used in production $19,369 Direct labor 26,541 Factory overhead 37,168 Work in process inventory, March 1 22,586 Work in process inventory, March 31 19,023 Finished goods inventory, March 1 23,026 Finished goods inventory, March 31 27,299 a. Determine the cost of goods manufactured. b. Determine the cost of goods sold. earch al 43°F 2) 114

Accounting

27th Edition

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Chapter19: Job Order Costing

Section: Chapter Questions

Problem 19.4APR: Analyzing manufacturing cost accounts Fire Rock Company manufactures Designer paddle boards in a...

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Communication The controller of New Wave Sounds Inc. prepared the following product profitability report for management, using activity-based costing methods for allocating both the factory overhead and the marketing expenses. As such, the controller has confidence in the accuracy of this report. Home Theater Speakers Wireless Speakers Wireless Headphones Total Sales 1,500,000 1,200,000 900,000 3,600,000 Cost of goods sold 1,050,000 720,000 810,000 2,580,000 Gross profit 450,000 480,000 90,000 1,020,000 Marketing expenses 600,000 120,000 72,000 792,000 Income from operations (150,000) 360,000 18,000 228,000 In addition, the controller interviewed the vice president of marketing, who provided the following insight into the company's three products: The home theater speakers are an older product that is highly recognized in the marketplace. The wireless speakers are a new product that was just recently bunched. The wireless headphones are a new technology that has no competition in the marketplace, and it is hoped that they will become an important future addition to the companys product portfolio. Initial indications are that the product is well received by customers. The controller believes that the manufacturing costs for all three products are in line with expectations. Based on the information provided: 1. Calculate the ratio of gross profit to sales and the ratio of income from operations to sales for each product. 2. Write a brief (one page) memo using the product profitability report and the calculations in (1) to make recommendations to management with respect to strategies for the three products.
Analyzing manufacturing cost accounts Fire Rock Company manufactures Designer paddle boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for June: In addition, the following information is available: a . Materials and direct labor were applied to the following jobs in June: b. factory overhead is applied to each job at a rate of 140% of direct labor cost c. The June 1 Work in Process balance consisted of two job as follows: Job No. Style Work In Process, June 1 201 T100 16,500 202 T200 44,000 Total 60,500 d. Customer jobs completed and units sold in June were as follows: Instructions 1. Determine the missing amounts associated with each letter. Provide supporting calculations by completing a table with the following headings: 2. Determine the June 50 balances for each of the inventory accounts and factor overhead.
Activity-based and department rate product costing and product cost distortions Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Indirect labor 507,000 Cutting Department 156,000 Finishing Department 192,000 Total 855,000 The activity hase associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Budgeted Activity Cost Activity Base Production control 237,000 Number of production runs Materials handling 270,000 Number of moves Total 507,000 The activity-base usage quantities and units produced for the two products follow: Number o Production Runs Number of Moves Direct Labor HoursCutting Direct Labor HoursFinishing Units Produced Snowboards 430 5,000 4,000 2,000 6,000 Skis _70 2,500 2,000 4,000 6,000 Total 500 7,500 6,000 6,000 12,000 Instructions 1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is 315,000 and 540,000 for the Cutting and finishing departments, respectively. 2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1). 3. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. 4. Determine the total and per-unit cost assigned to each product under activity-based costing. 5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.
Activity-based and department rate product costing and product cost distortions Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Indirect labor 507,000 Cutting Department 156,000 Finishing Department 192,000 Total 855,000 The activity hase associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Budgeted Activity Cost Activity Base Production control 237,000 Number of production runs Materials handling 270,000 Number of moves Total 507,000 The activity-base usage quantities and units produced for the two products follow: Number o Production Runs Number of Moves Direct Labor HoursCutting Direct Labor HoursFinishing Units Produced Snowboards 430 5,000 4,000 2,000 6,000 Skis _70 2,500 2,000 4,000 6,000 Total 500 7,500 6,000 6,000 12,000 Instructions 1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is 315,000 and 540,000 for the Cutting and finishing departments, respectively. 2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1). 3. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. 4. Determine the total and per-unit cost assigned to each product under activity-based costing. 5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.
Analyzing manufacturing cost accounts Fire Rock Company manufactures designer paddle boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are .summarized for June: Matenals In addition, the following information is available: A. Materials and direct labor were applied to six jobs in June: Job No. Style Quantity Direct Materials Direct Labor 201 T100 550 55,000 41,250 202 T200 1,100 93,500 71,500 203 T400 550 38,500 22,000 204 S200 660 82,500 69,300 20S T300 480 60,000 48,000 206 S100 380 22,000 12,400 Total 3,720 351,500 264,450 B. Factory overhead is applied to each job at a rate of 140% of direct Libor cost. C. The June 1 Work Process balance consisted of two jobs, as follow Work in Process, Job No. Style June 1 201 T100 16,500 202 T200 44,000 Total 60,500 D. Customer jobs completed and units sold in June were at follows Job Mo. Style Completed In June Units Sold in June 201 T100 X 440 202 T200 X 880 203 T400 0 204 S200 X 570 20S T300 X 420 206 S100 0 Instructions 1. Determine the missing amounts associated with each letter. Provide supporting calculations by completing a table with the following headings: Job No Quantity June 1 Work in Process Direct Materials Direct Labor Factory Overhead Total Cost Unit Cost Units Sold Cost of Goods Sold 2. Determine the June 30 balances for each of the inventory accounts and factory overhead.