MANAGERIAL ACCOUNTING (LL) W/ CENGAGENO
15th Edition
ISBN: 9781337955409
Author: WARREN
Publisher: CENGAGE L
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Question
Chapter 2, Problem 3MAD
a.
To determine
Identify the reason for which the cost per plaque is increased from $60 to $80.
a.
Expert Solution
Explanation of Solution
Job order costing
Job order cost system provides a separate record of each particular quantity of product that passes through the factory. Each quantity that is manufactured in the business is known as job. Job order costing is used when the products produced are significantly different from each other.
Identify the difference between the expected number of backboards and brass plates, and the number of actual plaques shipped for Job 101.
| Materials | |
| Walnut plaques: | |
| Actual units used | 40 units |
| Expected units needed to produce 40 plaques | 40 units |
| Difference | 0 units |
| Brass plates: | |
| Actual units used | 40 units |
| Expected units needed to produce 40 plaques | 40 units |
| Difference | 0 units |
Table (1)
Identify the difference between the expected labor hours required to produce 40 plaques, and actual labors used for engraving and assembling for Job 101.
| Labor | |
| Engraving: | |
| Actual labor hours used | 20 hours |
|
Expected labor hours to produce 40 plaques | 20 hours |
| Difference | 0 hours |
| Assembly: | |
| Actual labor hours used | 10 hours |
|
Expected labor hours to produce 40 plaques | 10 hours |
| Difference | 0 hours |
Table (2)
Identify the difference between the expected number of backboards and brass plates, and the number of actual plaques shipped for Job 105.
| Materials | |
| Walnut plaques: | |
| Actual units used | 34 units |
| Expected units needed to produce 30 plaques | 30 units |
| Difference | 4 units |
| Brass plates: | |
| Actual units used | 34 units |
| Expected units needed to produce 30 plaques | 30 units |
| Difference | 4 units |
Table (3)
Identify the difference between the expected labor hours required to produce 30 plaques, and actual labors used for engraving and assembling for Job 105.
| Labor | |
| Engraving: | |
| Actual labor hours used | 17 hours |
|
Expected labor hours to produce 40 plaques | 15 hours |
| Difference | 2 hours |
| Assembly: | |
| Actual labor hours used | 8.5 hours |
|
Expected labor hours to produce 40 plaques | 7.5 hours |
| Difference | 1.0 hours |
Table (4)
Interpretation:
Cost per unit of material or labor is same for both the job, hence total cost did not increase because of the cost per unit of material or labor. Cost per plaque is $60 for Job 101 and $68 for Job 105. This cost per plaque is increased in Job 105, because of the usage of more labor and materials than that of Job 101. From the above calculation, it is identified that expected number of backboards and brass plates, and the number of actual plaques shipped for Job 101 are same, whereas Job 105 required 4 more backboards and brass plates than the expected number of units.
For Job 105, the expected labor hours (engraving and assembly) to produce 30 plaques are
b.
To determine
Recommend some improvements for Incorporation RT.
b.
Expert Solution
Explanation of Solution
Job 105 requires producing 30 good quality plaques, for that it uses 34 engraved brass plates. It is observed that engraver is not spelling the names correctly; this is because of supplying of small typewritten fonts to the engraver. Hence, the names should be supplied to the engravers in large typewritten fonts, so that they can print the name without any mistakes.
The assembly operation also needs some improvement, as it took 34 assembly operations in order to assemble 30 plaques properly. It may be that the plates are assembled off-register (crooked) to the backboard. This could be improved by using a fixture to properly align the plate to the backboard. Alternatively, it’s possible that the improper-engraved plaques were assembled to the backboards and needed to be disassembled, re-engraved, and reassembled to new backboards.
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Students have asked these similar questions
Raneri Trophies Inc. uses a job order cost system for determining the cost to manufacture award products (plaques and trophies). Among the company's products is an engraved plaque that is awarded to participants who complete a training program at a local business. The company sells the plaques to the local business for $80 each.
Each plaque has a brass plate engraved with the name of the participant. Engraving requires approximately 30 minutes per name. Improperly engraved names must be redone. The plate is screwed to a walnut backboard. This assembly takes approximately 15 minutes per unit. Improper assembly must be redone using a new walnut backboard.
During the first half of the year, Raneri had two separate plaque orders. The job cost sheets for the two separate jobs indicated the following information:
Why did the cost per plaque increase from $60 to $68?
What improvements would you recommend for Raneri Trophies Inc.?
Raneri Trophies Inc. uses a job order cost system for determining the cost to manufacture award products (plaques and trophies). Among the company’s products is an engraved plaque that is awarded to participants who complete a training program at a local business. The company sells the plaques to the local business for $80 each. Each plaque has a brass plate engraved with the name of the participant. Engraving requires approximately 30 minutes per name. Improperly engraved names must be redone. The plate is screwed to a walnut backboard. This assembly takesapproximately 15 minutes per unit. Improper assembly must be redone using a new walnut backboard. During the first half of the year, Raneri had two separate plaque orders. The job cost sheets for the two separate jobs indicated the following information:
See Attachment
a. Why did the cost per plaque increase from $60 to $68?b. What improvements would you recommend for Raneri Trophies Inc.?
Avett Manufacturing Company allows employees to purchase materials, such as metal and lumber, for personal use at a price equal to the company's cost. To purchase materials, an employee must complete a materials requisition form, which must then be approved by the employee's immediate supervisor. Brian Dadian, an assistant cost accountant, then charges the employee an amount based on Avett's net purchase cost.
Brian is in the process of replacing a deck on his home and has requisitioned lumber for personal use, which has been approved in accordance with company policy. In computing the cost of the lumber, Brian reviewed all the purchase invoices for the past year. He then used the lowest price to compute the amount due the company for the lumber.
The Institute of Management Accountants (IMA) is the professional organization for managerial accountants. The IMA has established four principles of ethical conduct for its members: honesty, fairness, objectivity, and responsibility. These…
Chapter 2 Solutions
MANAGERIAL ACCOUNTING (LL) W/ CENGAGENO
Ch. 2 - A. Name two principal types of cost accounting...Ch. 2 - What kind of firm would use a job order cost...Ch. 2 - Which account is used in the job order cost system...Ch. 2 - What document is the source for (A) debiting the...Ch. 2 - What is a job cost sheet?Ch. 2 - Prob. 6DQCh. 2 - Discuss how the predetermined factory overhead...Ch. 2 - A. How is a predetermined factory overhead rate...Ch. 2 - Prob. 9DQCh. 2 - Describe how a job order cost system can be used...
Ch. 2 - Issuance of materials On May 7, Bergan Company...Ch. 2 - Direct labor costs During May, Bergan Company...Ch. 2 - Factory overhead costs During May, Bergan Company...Ch. 2 - Applying factory overhead Bergan Company estimates...Ch. 2 - Job costs At the end of May, Bergan Company had...Ch. 2 - Cost of goods sold Pine Creek Company completed...Ch. 2 - Transactions in a job order cost system Five...Ch. 2 - The following information is available for the...Ch. 2 - Cost of materials issuances under the FIFO method...Ch. 2 - Materials issued are as follows: Journalize the...Ch. 2 - Kingsford Furnishings Company manufactures...Ch. 2 - A summary of the time tickets is as follows:...Ch. 2 - Entry for factory labor costs The weekly time...Ch. 2 - Schumacher Industries Inc. manufactures...Ch. 2 - Eclipse Solar Company operates two factories. The...Ch. 2 - Exotic Engine Shop uses a job order cost system to...Ch. 2 - Predetermined factory overhead rate Poehling...Ch. 2 - The following account appears in the ledger prior...Ch. 2 - Collegiate Publishing Inc. began printing...Ch. 2 - The following events took place for Rushmore...Ch. 2 - Job order cost accounting for a service company...Ch. 2 - Job order cost accounting for a service company...Ch. 2 - Barnes Company uses a job order cost system. The...Ch. 2 - Entries and schedules for unfinished jobs and...Ch. 2 - Job cost sheet Remnant Carpet Company sells and...Ch. 2 - Analyzing manufacturing cost accounts Fire Rock...Ch. 2 - Prob. 5PACh. 2 - Entries for costs in a job order cost system Royal...Ch. 2 - Entries and schedules for unfinished jobs and...Ch. 2 - Job cost sheet Stretch and Trim Carpet Company...Ch. 2 - Analyzing manufacturing cost accounts Clapton...Ch. 2 - Flow of costs and income statement Technology...Ch. 2 - Antolini Enterprises produces mens sports coats...Ch. 2 - Alvarez Manufacturing Inc. is a job shop. The...Ch. 2 - Prob. 3MADCh. 2 - Prob. 4MADCh. 2 - Ethics in Action TAC Industries Inc. sells heavy...Ch. 2 - Prob. 2TIFCh. 2 - Communication Carol Creedence, the plant manager...Ch. 2 - RIRA Company makes attachments such as backhoes...Ch. 2 - Todd Lay just began working as a cost accountant...Ch. 2 - Baldwin Printing Company uses a job order cost...Ch. 2 - John Sheng, a cost accountant at Starlet Company,...Ch. 2 - Lucy Sportswear manufactures a specialty line of...Ch. 2 - Patterson Corporation expects to incur 70,000 of...
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