ob cost system to produce these parts, the following events occurred during December. requisitioned from the company's inventory on December 2 for $6,600; on December 8 for $1,3 491. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52. turned in for these two projects for a total amount of 18 hours of work. All the workers were pa s were dated December 3, December 9, and December 15. On each of those days, 6 labor hours

ob cost system to produce these parts, the following events occurred during December. requisitioned from the company's inventory on December 2 for $6,600; on December 8 for $1,3 491. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52. turned in for these two projects for a total amount of 18 hours of work. All the workers were pa s were dated December 3, December 9, and December 15. On each of those days, 6 labor hours

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 7P: Self-Construction Olson Machine Company manufactures small and large milling machines. Selling...

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Waterways has two major public-park projects to provide with comprehensive irrigation in one of its service locations this month. Job J57 and Job K52 involve 15 acres of landscaped terrain, which will require special-order, sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December.Raw materials were requisitioned from the company’s inventory on December 2 for $5,091; on December 8 for $1,050; and on December 14 for $3,495. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52.Six time tickets were turned in for these two projects for a total amount of 18 hours of work. All the workers were paid $17.5 per hour. The time tickets were dated December 3, December 9, and December 15. On each of those days, 6 labor hours were spent on these jobs, two-thirds (2/3) for J57 and the rest for K52.The predetermined overhead rate is based on machine hours. The expected…
Waterways has two major public-park projects to provide with comprehensive irrigation in one of its service locations this month. Job J57 and Job K52 involve 15 acres of landscaped terrain which will require special-order sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December. Raw materials were requisitioned from the company's inventory on December 2 for $6.294; on December 8 for $1,308; and on December 14 for $4,284. In each instance, two- thirds (2/3) of these materials were for J57 and the rest for KS2. Six time tickets were turned in for these two projects for a total amount of 18 hours of work. All the workers were paid $16.50 per hour. The time tickets were dated December 3. December 9, and December 15. On each of those days, 6 labor hours were spent on these jobs, two-thirds (2/3) for J57 and the rest for K52. The predetermined overhead rate is based on machine hours. The estimated…
Waterways has two major public-park projects to provide with comprehensive irrigation in one of its service locations this month. Job J57 and Job K52 involve 15 acres of landscaped terrain which will require special-order sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December. Raw materials were requisitioned from the company's inventory on December 2 for $6,294; on December 8 for $1,308; and on December 14 for $4,284. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52. Six time tickets were turned in for these two projects for a total amount of 18 hours of work. All the workers were paid $16.50 per hour. The time tickets were dated December 3, December 9, and December 15. On each of those days, 6 labor hours were spent on these jobs, two-thirds (2/3) for J57 and the rest for K52. The predetermined overhead rate is based on machine hours. The estimated…
Dec. Dec. Additional job order activities during this period included: 2 Dec. 12 Dec. Waterways has two major public-parkprojects to provide with comprehensive irrigation in one of its service locations this month. Job J57 and Job K52 involve 15 acres of landscaped terrain which will require special-order sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December. Dec. 13 1 Purchased raw materials from Durbin Supply Company on account for $46,816. Issued $35,200 of direct materials from the company's inventory to jobs other than K52 and J57 and $2,640 of indirect materials. Raw materials were requisitioned from the company's inventory on December 2 for $4,458; on December 8 for $930; and on December 14 for $3,042. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52. 18 Dec. 21 Six time tickets were turned in for these two projects for a total amount of 18…
A heavy construction firm has been awarded a contract to build a large concrete dam. It is expected that a total of 8 years will be required to complete the work. The firm will buy $600,000 worth of special equipment for the job. During the preparation of the job cost estimate, the following utilization schedule was computed for the special equipment:
Self-Construction Olson Machine Company manufactures small and large milling machines. Selling prices of these machines range from 35,000 to 200,000. During the 5-month period from August 1, 2019, through December 31, 2019, Olson manufactured a milling machine for its own use. This machine was built as part of the regular production activities. The project required a large amount of time front planning and supervisory personnel, as well as that of some of the companys officers, because it was a more sophisticated type of machine than the regular production models. Throughout the 5-month period, Olson charged all costs directly associated with the construction of the machine to a special account entitled Asset Construction Account. An analysis of the charges to this account as of December 31, 2019, follows: Olson allocates factory overhead to normal production as a percent of direct labor dollars as follows: Olson uses a flat rate of 40% of direct labor dollars to allocate general and administrative overhead. During the machine testing period, a cutter head malfunctioned and did extensive damage to the machine table and one cutter housing. This damage was not anticipated and was the result of an error in the assembly operation. Although no additional raw materials were needed to make the machine operational after the accident, the following labor for rework was required: Olson has included all these labor charges in the asset construction account. In addition, it included in the account the repairs and maintenance charges of 1,340 that it incurred as a result of the malfunction. Required: 1. Compute, consistent with GAAP and common practice, the amount that Olson should capitalize for the milling machine as of December 31, 2019, when it declares the machine operational. 2. Next Level Identify the costs you included in Requirement 1 for which there are acceptable alternative procedures. Describe the alternative procedure(s) in each case.
Park Industries manufactures custom-designed playground equipment for schools and city parks. Park expected to incur S784,700 of manufacturing overhead cost, 41,300 of direct labor hours, and S1,073,800 of direct labor cost during the year (the cost of direct labor is $26 per hour). The company allocates manufacturing overhead on the basis of direct labor nours. During August, Park completed Job 306. The job used 165 direct labor hours and required S12,700 of direct materials. The City of Jonestown has contracted to purchase the playground equipment at a price of 27% over manufacturing cost. Reac the requirements Requirement First identify the formulathen calculate the predetermined overhead rate. Estimated yearly overhead costs Estimated yearly direct labor hours - Predetermined overhead rate per hour
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Cycle Gear Corporation has Incurred the following costs on job W456, an order for 20 special sprockets to be delivered at the end of next month: Direct materials: • On April 10, requisition number 15673 was Issued for 40 titanlum blanks to be used in the special order. The blanks cost $20 each. On April 11, requisition number 15678 was Issued for 420 hardened nibs also to be used In the special order. The nibs cost $1.75 each. Direct labour: • On April 12, Jamle Unser worked from 1:00 a.m. until 2:45 p.m. on job W456. He is pald $12.60 per hour. • On April 18, Mellssa Chan worked from 8:15 a.m. until 1130 a.m. on job W456. She is pald $13.20 per hour. Required: 1. On what documents would these costs be recorded? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Purchase requisition form of the Cycle Gear Corporatilon. The…
Johnston Company cleans and applies powder coat paint to metal items on a job-order basis. Johnston has budgeted the following amounts for various overhead categories in the coming year. Supplies $220,000 Gas 56,000 Indirect labor 172,000 Supervision 75,500 Depreciation on equipment 51,000 Depreciation on the buliding 45,000 Rental of special equipment 11,500 Electricity (for lighting, heating, and air conditioning) 28,300 Telephone 5,000 Landscaping service 1,800 Other overhead 50,000 In the coming year, Johnston expects to powder coat 140,000 units. Each unit takes 1.4 direct labor hours. Johnston has found that supplies and gas (used to run the drying ovens—all units pass through the drying ovens after powder coat paint is applied) tend to vary with the number of units produced. All other overhead categories are considered to be fixed. Required: Question Content Area 1. Calculate the number of direct labor hours Johnston must budget for the coming…
Johnston Company cleans and applies powder coat paint to metal items on a job-order basis. Johnston has budgeted the following amounts for various overhead categories in the coming year. Supplies $215,000 Gas 54,000 Indirect labor 174,000 Supervision 76,000 Depreciation on equipment 45,000 Depreciation on the buliding 49,000 Rental of special equipment 14,500 Electricity (for lighting, heating, and air conditioning) 27,200 Telephone 4,000 Landscaping service 1,300 Other overhead 51,000 In the coming year, Johnston expects to powder coat 120,000 units. Each unit takes 1.4 direct labor hours. Johnston has found that supplies and gas (used to run the drying ovens—all units pass through the drying ovens after powder coat paint is applied) tend to vary with the number of units produced. All other overhead categories are considered to be fixed. Required: Question Content Area 1. Calculate the number of direct labor hours Johnston must budget for the coming…
In connection with surfacing a new highway, a contractor has a choice of two sites on which to set up the asphalt-mixing plant equipment. The contractor estimates that it will cost $2.75 per cubic yard mile (yd3-mile) to haul the asphalt-paving material from the mixing plant to the job location. Factors relating to the two mixing sites are as follows given in the shown table (production costs at each site are the same): The job requires 50,000 cubic yards of mixed-asphalt-paving material. It is estimated that four months (17 weeks of five working days per week) will be required for the job. Compare the two sites in terms of their fixed, variable, and total costs. Assume that the cost of the return trip is negligible. Which is the better site? For the selected site, how many cubic yards of paving material does the contractor have to deliver before starting to make a profit if paid $12 per cubic yard delivered to the job location?