hillicothe Meat Company produces one of the best sausage products in southern Ohio. The company's controller used the account-classification method to compile the following information. Depreciation schedules revealed that monthly depreciation on buildings and equipment is $19,000. Inspection of several invoices from meat packers indicated that meat costs the company $1.10 per pound of sausage produced. Wage records showed that compensation for production employees costs $0.70 per pound of sausage produced. Payroll records showed that supervisory salaries total $10,000 per month. Utility bills revealed that the company incurs utility costs of $4,000 per month plus $0.20 per pound of sausage produced. 1) Write a cost formula to express the cost behavior of the firm's production costs. ( Use the formula Y=a+bX, where Y denotes the production cost and X denotes the quantity of sausage produced.)

hillicothe Meat Company produces one of the best sausage products in southern Ohio. The company's controller used the account-classification method to compile the following information. Depreciation schedules revealed that monthly depreciation on buildings and equipment is $19,000. Inspection of several invoices from meat packers indicated that meat costs the company $1.10 per pound of sausage produced. Wage records showed that compensation for production employees costs $0.70 per pound of sausage produced. Payroll records showed that supervisory salaries total $10,000 per month. Utility bills revealed that the company incurs utility costs of $4,000 per month plus $0.20 per pound of sausage produced. 1) Write a cost formula to express the cost behavior of the firm's production costs. ( Use the formula Y=a+bX, where Y denotes the production cost and X denotes the quantity of sausage produced.)

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter2: Accounting For Materials

Section: Chapter Questions

Problem 15P: One of the tennis rackets that Ace Sporting Goods manufactures is a titanium model (Slam) that sells...

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Chillicothe Meat Company produces one of the best sausage products in southern Ohio. The company’s controller used the account-classification method to compile the following information.a. Depreciation schedules revealed that monthly depreciation on buildings and equipment is $19,000.b. Inspection of several invoices from meat packers indicated that meat costs the company $1.10 per pound of sausage produced.c. Wage records showed that compensation for production employees costs $.70 per pound of sausage produced.d. Payroll records showed that supervisory salaries total $10,000 per month.e. Utility bills revealed that the company incurs utility costs of $4,000 per month plus $.20 per pound of sausage produced.Required:1. Classify each cost item as variable, fixed, or semivariable.2. Write a cost formula to express the cost behavior of the firm’s production costs. (Use the formula Y = a + bX, where Y denotes production cost and X denotes quantity of sausage produced.)
Windsor Corporation incurred the following costs during 2022. Direct materials used in product $120,000 Advertising expense $45,000 Depreciation on factory 60,000 Property taxes on factory 14,200 Property taxes on store 7,500 Delivery expense 20,800 Labor costs of assembly-line workers 110,000 Sales commissions 35,000 Factory supplies used 23,400 Salaries paid to sales clerks 50,000 Work in process inventory was $12,100 at January 1 and $15,400 at December 31. Finished goods inventory was $60,000 at January 1 and $45,500 at December 31. Compute cost of goods manufactured. Cost of goods manufactured $enter the cost of goods manufactured in dollars Compute cost of goods sold. Cost of goods sold $enter the cost of goods sold in dollars
Charles Berkle is the manager of Nogain Manufacturing and is interested in doing a cost of quality analysis. The following cost and revenue data are available for the most recent year ended December 31. Sales revenue $ 250,000 Cost of goods sold 140,000 Warranty expense 20,000 Inspection costs 14,000 Scrap and rework 7,800 Product returns due to defects 6,000 Depreciation expense 10,000 Machine maintenance expense 2,700 Wage expense 35,000 Machine breakdown costs 4,000 Estimated lost sales due to poor quality 5,000 a. Classify each of these costs into the four quality cost categories and prepare a cost of quality report for Nogain. b. What percentage of sales revenue is being spent on prevention and appraisal activities? c. What percentage of sales revenue is being spent on internal and external failure costs?
An industrial company has (20) machines, and every malfunction that costs the company 180 dinars to be repaired includes repair costs and maintenance services. In addition to (0.10) of the working time for each working day, noting that each delay for one working day costs the company (8000) dinars, and the company responsible for the preventive maintenance program provided it after the daily working hours at a cost of (300) dinars per machine, and thus loss can be avoided. The working day, and the holidays possibilities have been estimated as shown in the following table: Required: 1- Calculating the cost of repairing the malfunction during work (remedial maintenance) 2- Calculating the cost of a preventive maintenance policy or program if it is followed every month, and if it is followed every three months. 3- Determine what is best for the company? Do you choose a curative maintenance policy or preventive maintenance? By the body in charge of this?…
DJV Corporation incurred the following costs while manufacturing its product. Materials used in product $ 120,000 Advertising expense $45,000 Depreciation on plant 60,000 Property taxes on plant 19,000 Property taxes on store 7,500 Delivery expense 21,000 Labor costs of assembly-line workers 110,000 Sales commissions 35,000 Factory supplies used 23,000 Salaries paid to sales clerks 50,000 Work-in-process inventory was $22,000 at January 1 and $15,500 at December 31. Finished goods inventory was $65,000 at January 1 and $50,600 at December 31. Instructions Compute cost of goods manufactured. Compute cost of goods sold.
The controller for Nina Group reviewed the following large transactions this month for the company: ● Purchase of a forklift to use in the warehouse: $32,000 (8-year life, depreciated on a straight-line basis, recorded monthly). ● Purchase of materials for use in the production of wheelbarrows (the company’s primary product): $114,000 (all was used in production this month, and all units produced were sold). ● Recognized payroll costs for this month’s production, office, and administrative employees: $45,000 (one-third for each category). ● Investment in mutual funds (with excess cash): $65,000. What dollar amount from these transactions would be recorded as an expense this month? What dollar amount would still be listed as an asset at the end of the month?
King Frost produces and sells ice cream, gelato and sorbet. The following information is available:• The production machines were purchased four years ago for a total purchase price of $268,000. The machines are depreciated on a straight-line basis and have an estimated useful life of 14 years with a total scrap value of $16,000.• Wage records show that wages and on-costs for production employees are $0.004 per litre.• The machines are maintained four times each month. The cost per maintenance is $1,500.• Inspection of several invoices from ingredient suppliers indicate that the ingredients per litre costs on average $0.85.• Monthly depreciation on buildings totals $35,000, of which $22,000 relates to the factory and the remainder relates to the retail store.• Payroll records show the engineers’ and factory supervisors’ salaries total $58,000 per month.• Electricity costs associated with the factory are $6,000 per month plus an average of $0.02 per litre.…
Wedge Company paid $8,000 for materials (all of which was used in production during the year), $7,000 to manufacturing workers, $4,000 to office workers, $5,000 for the factory utilities, and $1,000 for office utilities. During the year, the company manufactured 1,000 parts and sold 750 of them. There were no units in beginning inventory at the start of the period. 1. What was Wedge’s cost of goods sold for the year? [ Select ] ["$25,000", "$20,000", "$18,750", "$15,000"] 2. What was the value of Wedge’s inventory at the end of the year?
At the end of the reporting period, SKL Corp. shows the following account for machinery it had assembled for its own use during the period: Account: MACHINERY (Job Order #7339344) Item Debit Credit Cost of dismantling old machine P14,480 Cash proceeds from sale of old machine P12,000 Raw materials used in construction of new machine 76,000 Labor on construction of new machine 49,000 Cost of installation 11,200 Materials spoiled in machine trial runs 2,400 Profit on construction 24,000 Purchase of machine tools 13,000 An analysis of the details in the account disclosed the following: Cash discounts received on the payments for materials used in construction totaled P3,000, and these were reported in the purchase discounts account. The factory overhead account shows a balance of P292,000 for the current period; this balance exceeds normal overhead on regular plant activities by…
Prior to install a JIT system, Buckner Company, a producer of automobile parts, used maintenance hours to assign maintenance costs to its three products (wheels, rims, and ball bearings). The maintenance costs totaled $12,000,000 per year. The machine hours used by each product and the quantity produced of each product are as follows: Wheels: Machine hours: 150,000 Qnty produced: 187,500 Rims: Machine hours: 300,000 Qnty produced: 281,250 Bearings: Machine hours: 350,000 Qnty produced: 350,000 After installing JIT, three manufacturing cells were created and the cell workers were trained to perfom preventive maintenance and minor repairs. A full-time maintenance person was also assigned to each cell. Maintenance costs for the three cells still totaled $12,000,000; however, these costs are now treaceable to each cell as follows: Cell, wheels: $2,640,000 Cell, rims: 4,560,000 Cell, bearings: 5,600,000 1) Compute the pre-JIT maintenance cost per unit for each product (round answers to two…
King Frost produces and sells ice cream, gelato and sorbet. The following information is available:• Inspection of several invoices from ingredient suppliers indicate that the ingredients per litre costs on average $0.90. • The production machines were purchased six years ago for a total purchase price of $305,000. The machines are depreciated on a straight-line basis and have an estimated useful life of 12 years with a total scrap value of $21,800. • Wage records show that wages and on-costs for production employees are $0.002 per litre. • The sales team is paid a total of $5,000 per month and commission of 0.001 per litre sold. • Electricity costs associated with the factory are $5,000 per month plus an average of $0.01 per litre. • Payroll records show the engineers’ and factory supervisors’ salaries total $62,000 per month. • Monthly depreciation on factory building is $25,000. • The machines are maintained twice each month. The cost per maintenance…
Rona Company provided the following charges to the “repair and maintenance account”. Service contract on office equipment 100,000 Initial design fee for proposed extension of office building 150,000 New condenser for central air conditioning unit 10,000 Purchase of executive chairs and desks 200,000 Purchase of storm windows and screens and their installation all office windows 500,000 Sealing of roof leaks in production area 80,000 Replacement of door to production area 50,000 Installation of automatic door-opening system 200,000 Overhead crane for assembly department to speed up production 350,000 Replacement of broken gear on machine , 60,000 what total amount of expenditure should be capitalized? a. 1,500,000 b.1,410,000 c 1,400,000 d. 1,200,000