Problem 2. The Best Manufacturing Company uses standard costs with its job order cost accounting system. During the third quarter of 2013, an order of 4,000 units of Product Echo (Job. 3-3003) was accepted from a longtime customer. The standard cost to produce a unit is given below: Direct materials - 3.0 lbs at P8.00 per pound Direct labor – 2 hours at P18 per hour Overhead – 2 hours (variable P6; Fixed P10) Overhead is applied to production on the basis of direct labor hours. Normal capacity for the quarter was 9,000 direct labor hours. During the quarter, the following transactions related to the job occurred: a. Purchased 12,400 pounds of raw materials on account at P7.20 per pound b. Issued 12,400 pounds of raw materials to production c. Incurred 7,600 hours of direct labor at P18.40 per hour d. Manufacturing overhead incurred for the quarter totaled P135,300. e. Applied overhead to production. f. Transferred completed jobs to Finished Goods. g. Billed the customer at cost plus 60% mark-up on cost. REQUIRED: Journal entries to record the above.

Problem 2. The Best Manufacturing Company uses standard costs with its job order cost accounting system. During the third quarter of 2013, an order of 4,000 units of Product Echo (Job. 3-3003) was accepted from a longtime customer. The standard cost to produce a unit is given below: Direct materials - 3.0 lbs at P8.00 per pound Direct labor – 2 hours at P18 per hour Overhead – 2 hours (variable P6; Fixed P10) Overhead is applied to production on the basis of direct labor hours. Normal capacity for the quarter was 9,000 direct labor hours. During the quarter, the following transactions related to the job occurred: a. Purchased 12,400 pounds of raw materials on account at P7.20 per pound b. Issued 12,400 pounds of raw materials to production c. Incurred 7,600 hours of direct labor at P18.40 per hour d. Manufacturing overhead incurred for the quarter totaled P135,300. e. Applied overhead to production. f. Transferred completed jobs to Finished Goods. g. Billed the customer at cost plus 60% mark-up on cost. REQUIRED: Journal entries to record the above.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter9: Profit Planning And Flexible Budgets

Section: Chapter Questions

Problem 64E: Use the following information for Exercises 9-63 and 9-64: Palladium Inc. produces a variety of...

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Labor classification trade-off Skidmore Electronics manufactures consumer electronic products. The company has three assembly labor classifications, S-1, S-2, and S-3. The three classifications are paid 15, 18, and 22 per hour, respectively. The assembly activity for a new smartphone is as follows: A product engineer proposes using a higher-rated employee to perform the assembly on the new phone. His analysis has shown that an S-3 employee can perform the assembly in 0.35 hour per unit. A. Determine the Assembly activity cost using the S-3 labor classification. B. Is the product engineers proposal supported?
During the week of August 21, Parley Manufacturing produced and shipped 4,000 units of its machine tools: 1,500 units of Tool SK1 and 2,500 units of Tool SK3. The cycle time for SK1 is 0.73 hour, and the cycle time for SK3 is 0.56 hour. The following costs were incurred: Required: 1. Assume that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost, and comment on its accuracy. 2. Assume that Tool SK1 is responsible for 60% of the materials cost. Calculate the unit cost for Tool SK 1 and Tool SK3, and comment on its accuracy. Explain the rationale for using units shipped instead of units produced in the calculation. 3. Calculate the unit cost for the two models, using DBC. Explain when and why this cost is more accurate than the unit cost calculated in Requirement 2.
York Company Is a machine shop that estimated overhead will be $50,000, consisting of 5,000 hours of direct labor. The cost to make job 0325 is $70 in aluminum and two hours of labor at $20 per hour. During the month. York incurs $50 in indirect material cost. $150 in administrative labor, $300 in utilities, and $250 in depreciation expense. What is the predetermined overhead rate if direct labor hours are considered the cost driver? What is the cost of Job 0325? What is the overhead incurred during the month?
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The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
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