Problem 9 206Cost AccountingProblem 9Little Mermaid Company received an order of 5.000 automatic mixing machines. Thecost per unit is: materials P 200.00: labor - P 120.00; factory overhead applied at150% of direct labor cost (140% in cases in which any defective unit costs are to becharged to a specific order). Final inspection revealed that 1,000 units wereincorrectly assembled. To correct each defective unit requires P50.00 for materials,P30.00 for labor, and factory overhead of the appropriate rate. Then 20 units were.classified as seconds and sold for P400.00 each, the proceeds being credited to theorder. The customer has agreed to accept the remaining good machines, although theacceptable units are fewer than the number ordered.Required:1. Entries if the method used is charged to specific job.2. Entries if the method used is charged to all production.3. Cost per unit of the finished goods if:a. Method used is charged to specific jobb. Method used is charged to all production

Answer 1: If the method used is charged to specific job No Particulars Debit Credit 1 Work in…

Answered: Problem 9 Little Mermaid Company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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11. Miracles Manufacturing Co. manufactures a lifting equipment. One order from Heaven Company for 3,000 lifting equipment showed the following cost per unit; materials P35.00; labor P20.00; FOH applied at 150% of direct labor cost which includes a 10% allowance for reworking defective units. Final inspection showed that 250 units were not properly produced. Correction for each defective unit requires P3.50 for materials, P4.00 for labor and FOH at the appropriate rate.Assuming the defective units are the result of internal failure, how much is the cost of goods manufactured?
16. Accounting Apparel completed 3,600 expensive bags during the 1st quarter of the current year. The following costs per unit are presented below:Direct materials P200Direct labor P180Factory overhead, including P10 allowance for spoilage P180Final inspection revealed that 600 bags were spoiled which were sold as export overrun at an amount equal to 40% of production costs. The good units were delivered and billed to the customer at 20% gross profit.If spoilage is due to customer’s intervention, how much is the total gross profit on the order?
44. SHINING Apparel completed 3, 600 expensive bags during the 1st quarter of the current year. The following costs per unit are presented below: Direct materials P200Direct Labor 180Factory overhead, included P10 allowance for spoilage 180Final inspection revealed that 600 bags were spoiled which were sold as export overrun at 40% of production costs. The good units were delivered and billed the customer at 120% above cost.If the spoilage is common to all jobs, the amount billed to the customer is: a. • P1,680,000 b. • P2,100,000 c. • P2,016,000 d. • P3,696,000
22. SONA Co. received an order for 1,000 units of item AY-14. Because of the order’s exacting specifications, it is anticipated that defective and spoiled work will exceed the normal rate. The materials cost per unit is P140; labor cost, P200; and factory overhead for this order is to be applied at 80% of the labor cost. During production, 150 units were found to be defective and required the following total additional costs; materials, P3,000, labor, P7,500 and factory overhead at 80% of direct labor cost. On final inspection, 50 units were classified as seconds and sold for P200 each, the proceeds being credited to the order. The customer has agreed to accept the good units.How much is the unit cost of the finished products?
Question 24 Bongani Limited manufactures a product that sells for R120. He manufactured and sold 12 500 units during the previous month. The following additional information, for this activity level, is available: Total direct material cost R281 250 Direct labour cost per hour R12 Direct labour hours needed per product 1 ½ Total variable manufacturing overheads R122 500 Sales commission (of the selling price) 2 ½ % Total fixed manufacturing overheads R360 000 Other fixed costs in total R420 000 Do the following calculations, according to the instructions given: Required: The workers at Bongani’s plant threaten to strike if they do not receive a pay increase of 10%. The sales people want a commission of 3%. The only supplier of the direct material has increased its price by 5% per unit. All other…
5. NESTING, Inc. is employing a sophisticated just-in-time manufacturing system. The company uses backflush costing for recording its production. The following transactions occurred for the year ended December 31,2020: A. Purchased Php 170,000.00 of raw materials on account. B. All materials purchased were requisitioned for production. C. Incurred direct labor costs of Php 80,000.00. D. Actual Factory overhead costs amounted to Php 122,000.00. E. Applied conversion costs totaled Php 202,000.00 including direct labor cost of Php 80,000.00. F. All telephones were completed and sold. What is the cost of goods sold for the year ended December 31,2020? * 3 points
19-Assume that ABC LLC is producing 40000 units of Product A. The direct material cost per unit is OMR50, direct labor cost per unit OMR 10, direct labor hours per unit 2 hours, machine hours per unit 5 hours, No. of purchase requisitions 1000 and No. of machine set-ups 100 . Production overhead split by activity : Receiving and inspection RO 1,500,000 and Production scheduling/set up : RO 1,750,000. Number of batch received/inspected 2000 and No. of batches for scheduling/set up 500. From the following given options identify receiving/ inspecting cost driver rate. a. OMR 750 b. OMR 1000 c. None of the given options d. OMR 800
15 Kator Co. is a manufacturer of industrial components. One of their products that is used as a sub-component in auto manufacturing is KB-96. This product has the following financial structure per unit. Selling price P 150 Direct materials P 20Direct labor 15Variable manufacturing overhead 12Fixed manufacturing overhead 30Fixed selling 3Fixed administrative 10 Total costs P 90 Kator Co. has received a one-time special order for 1,000 KB-96 parts. Assuming Kator has excess capacity and the special order customer does not compete with Kator's “regular” customers, the minimum price that is acceptable for this one-time special order is in excess of: Group of answer choices P77. P77 P57 P47. P90. P50.
Per Unit Total\\nDirect materials $ 5.00 \\nDirect labor 2.00 \\nSupervision 1.90 $ 123,500\\nDepreciation 1.40 $ 91,000\\nVariable manufacturing overhead 0.60 \\nRent 0.60 $ 39,000\\nTotal product cost $ 11.50 \\n \\n\\nIf Futura decides to make the starters, a supervisor would have to be hired (at a salary of $123,500) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $81,000 per period. Depreciation is due to obsolescence rather than wear and tear.\\n\\n \\n\\nRequired:\\n\\nWhat is the financial advantage (disadvantage) of making the 65,000 starters instead of buying them from an outside supplier?
Q8 Read the following Case and write appropriate answer with calculation related to case A product is manufactured as a result of two processes, A and B. details of process B for the month of august were as follow: Particulars Rs Materials transferred from process A 10,000 kg valued at Rs.40,500 Labor Costs 1,000 hours valued Rs.5.616 Overheads 50% of labor cost Output transferred to finished goods 8000 kg Closing work in progress 900 kg Normal loss is 10% of input and losses do not have scrap value. Closing work in progress is 100% complete for material, and 75% complete for both labor and overheads. i)What is the value of the abnormal loss in Rs? Nil 489 544 546 12. ii) What is the value of the output (finished units) nearest to Rs? Rs.43,977 Rs.39,139 Rs.43,488 Rs.43,680 iiI) What are the equivalent units of production as to material and labor & overheads in August? Material…
66. The Everest Snow Company manufactures and sells direct to customers 10,000 jars of ‘Everest Snow’ per month at Rs. 1.25 per jar. The company’s normal production capacity is 20,000 jars and snow per month. Analysis is of cost for 10,000 jars show:Direct Material. Rs. 1,000Direct Labour Rs. 2,475Power Rs. 140Misc. Expense Rs. 430Jars Rs. 600Fixed expenses of manufacturing, Selling and administration Rs. 7,955Total Rs. 12,600 The company has received an offer for export under a different brand name of 10,000 jars per month at 75 paise a jar. Write a short note on the advisability of accepting the offer ?
Q14 Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (5 kilograms × $12 per kilogram) = $60 per unit; direct labor (3.5 hours per unit × $20 per hour) = $70 per unit. All materials are issued at the beginning of processing. The operating data shown below were taken from the records for December: In-process beginning inventory None In-process ending inventory—80% complete as to labor 1,020 units Units completed during the period 6,820 units Budgeted output 7,380 units Purchases of materials (in kilograms) 43,000 Total actual direct labor cost incurred $ 538,748 Direct labor hours worked (AQ) 27,100 hours Materials purchase-price variance $ 4,300 favorable Increase in materials inventory in December 3,050 kilograms The actual total cost of direct materials used in production during December was: Multiple Choice $478,481.…

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