Porter Company's most recent contribution format income statement is shown below:
Total
Per Unit
Sales (30,000 units)
$150,000
$5
Variable expenses
90,000
3
Contribution margin
60,000
$2
Fixed expenses
50,000
Net operating income
$ 10,000
Required:
Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Input all amounts as positive values except losses which should be indicated by a minus sign. Do not round intermediate calculations. Round your \"Per unit\" answers to 2 decimal places. Omit the \"$\" sign in your response.)
1.
The number of units sold increases by 15%.
2.
The selling price decreases by 50 cents per unit, and the number of units sold increases by 20%.
3.
The selling price increases by 50 cents per unit, fixed expenses increase by $10,000, and the number of units sold decreases by 5%.
4.
Variable expenses increase by 20 cents per unit, the selling price increases by 12%, and the number of units sold decreases by 10%.
Click here for the SOLUTION
Thursday, August 15, 2013
The PVC Company manufactures a high-quality plastic pipe that goes through three processing stages prior to completion
The PVC Company manufactures a high-quality plastic pipe that goes through three processing stages prior to completion.
Information on work in the first department, Cooking, is given below for May:
Production data:
Pounds in process, May 1: materials 100% complete; conversion 90% complete
70,000
Pounds started into production during May
350,000
Pounds completed and transferred to the next department
?
Pounds in process, May 31: materials 75% complete; conversion 25% complete
40,000
Cost data:
Work in process inventory, May 1:
Materials cost
$
86,000
Conversion cost
$
36,000
Cost added during May:
Materials cost
$
447,000
Conversion cost
$
198,000
The company uses the weighted-average method.
Required:
1.
Compute the equivalent units of production.
2.
Compute the costs per equivalent unit for the month. (Round your answers to 2 decimal places. Omit the \"$\" sign in your response.)
3.
Determine the cost of ending work in process inventory and of the units transferred out to the next department. (Omit the \"$\" sign in your response.)
4.
Prepare a cost reconciliation report for the month. (Omit the \"$\" sign in your response.)
Click here for the SOLUTION
Information on work in the first department, Cooking, is given below for May:
Production data:
Pounds in process, May 1: materials 100% complete; conversion 90% complete
70,000
Pounds started into production during May
350,000
Pounds completed and transferred to the next department
?
Pounds in process, May 31: materials 75% complete; conversion 25% complete
40,000
Cost data:
Work in process inventory, May 1:
Materials cost
$
86,000
Conversion cost
$
36,000
Cost added during May:
Materials cost
$
447,000
Conversion cost
$
198,000
The company uses the weighted-average method.
Required:
1.
Compute the equivalent units of production.
2.
Compute the costs per equivalent unit for the month. (Round your answers to 2 decimal places. Omit the \"$\" sign in your response.)
3.
Determine the cost of ending work in process inventory and of the units transferred out to the next department. (Omit the \"$\" sign in your response.)
4.
Prepare a cost reconciliation report for the month. (Omit the \"$\" sign in your response.)
Click here for the SOLUTION
Honeybutter, Inc., manufactures a product that goes through two departments prior to completion
Honeybutter, Inc., manufactures a product that goes through two departments prior to completion— the Mixing Department followed by the Packaging Department. The following information is available about work in the first department, the Mixing Department, during June.
Percent Completed
Units
Materials
Conversion
Work in process, beginning
70,000
70%
40%
Started into production
460,000
Completed and transferred out
450,000
Work in process, ending
80,000
75%
25%
Materials
Conversion
Work in process, beginning
$
36,550
$
13,500
Cost added during June
$
391,850
$
287,300
Required:
Assume that the company uses the weighted-average method.
1.
Determine the equivalent units for June for the Mixing Department.
2.
Compute the costs per equivalent unit for June for the Mixing Department. (Round your answers to 2 decimal places. Omit the \"$\" sign in your response.)
3.
Determine the total cost of ending work in process inventory and the total cost of units transferred to the Packaging Department. (Omit the \"$\" sign in your response.)
4.
Prepare a cost reconciliation report for the Mixing Department for June. (Omit the \"$\" sign in your response.)
Click here for the SOLUTION
Percent Completed
Units
Materials
Conversion
Work in process, beginning
70,000
70%
40%
Started into production
460,000
Completed and transferred out
450,000
Work in process, ending
80,000
75%
25%
Materials
Conversion
Work in process, beginning
$
36,550
$
13,500
Cost added during June
$
391,850
$
287,300
Required:
Assume that the company uses the weighted-average method.
1.
Determine the equivalent units for June for the Mixing Department.
2.
Compute the costs per equivalent unit for June for the Mixing Department. (Round your answers to 2 decimal places. Omit the \"$\" sign in your response.)
3.
Determine the total cost of ending work in process inventory and the total cost of units transferred to the Packaging Department. (Omit the \"$\" sign in your response.)
4.
Prepare a cost reconciliation report for the Mixing Department for June. (Omit the \"$\" sign in your response.)
Click here for the SOLUTION
Brady Products manufactures a silicone paste wax that goes through three processing departments - Cracking, Blending, and Packing
Brady Products manufactures a silicone paste wax that goes through three processing departments— Cracking, Blending, and Packing. All raw materials are introduced at the start of work in the Cracking Department. The Work in Process T-account for the Cracking Department for a recent month is given below:
Work in Process—Cracking Department
Inventory, May 1
63,700
Completed and transferred to the Blending Department
?
Materials
397,600
Conversion
187,600
Inventory, May 31
?
The May 1 work in process inventory consisted of 35,000 pounds with $43,400 in materials cost and $20,300 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 80% complete with respect to conversion. During May, 280,000 pounds were started into production. The May 31 inventory consisted of 45,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. The company uses the weighted-average method to account for units and costs.
Required:
1.
Determine the equivalent units of production for May.
2.
Determine the costs per equivalent unit for May. (Round your answers to 2 decimal places. Omit the \"$\" sign in your response.)
3.
Determine the cost of the units completed and transferred to the Blending Department during May. (Omit the \"$\" sign in your response.)
Click here for the SOLUTION
Work in Process—Cracking Department
Inventory, May 1
63,700
Completed and transferred to the Blending Department
?
Materials
397,600
Conversion
187,600
Inventory, May 31
?
The May 1 work in process inventory consisted of 35,000 pounds with $43,400 in materials cost and $20,300 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 80% complete with respect to conversion. During May, 280,000 pounds were started into production. The May 31 inventory consisted of 45,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. The company uses the weighted-average method to account for units and costs.
Required:
1.
Determine the equivalent units of production for May.
2.
Determine the costs per equivalent unit for May. (Round your answers to 2 decimal places. Omit the \"$\" sign in your response.)
3.
Determine the cost of the units completed and transferred to the Blending Department during May. (Omit the \"$\" sign in your response.)
Click here for the SOLUTION
Nature’s Way, Inc., keeps one of its production facilities busy making a perfume called Essence de la Vache
Nature’s Way, Inc., keeps one of its production facilities busy making a perfume called Essence de la Vache. The perfume goes through two processing departments: Blending and Bottling.
The following incomplete Work in Process account is provided for the Blending Department for March:
Work in Process—Blending
March 1 balance
32,800
Completed and transferred to Bottling (760,000 ounces)
?
Materials
147,600
Direct labor
73,200
Overhead
481,000
March 31 balance
?
The $32,800 beginning inventory in the Blending Department consisted of the following elements: materials, $8,000; direct labor, $4,000; and overhead applied, $20,800.
Costs incurred during March in the Bottling Department were: materials used, $45,000; direct labor, $17,000; and overhead cost applied to production, $108,000.
Required:
1.
Prepare journal entries to record the costs incurred in both the Blending Department and Bottling Department during March. (Omit the \"$\" sign in your response.)
a.
Raw materials were issued for use in production.
b.
Direct labor costs were incurred.
c.
Manufacturing overhead costs for the entire factory were incurred, $596,000. (Credit Accounts Payable and use a single Manufacturing Overhead control account for the entire factory.)
d.
Manufacturing overhead was applied to production using a predetermined overhead rate.
e.
Units that were complete with respect to processing in the Blending Department were transferred to the Bottling Department, $722,000.
f.
Units that were complete with respect to processing in the Bottling Department were transferred to Finished Goods, $920,000.
g.
Completed units were sold on account for $1,400,000. The cost of goods sold was $890,000.
2.
Post the journal entries from (1) above to T-accounts. The following account balances existed at the beginning of March. (The beginning balance in the Blending Department’s Work in Process account is given above.) (Record the transactions in the given order. Omit the \"$\" sign in your response.)
Click here for the SOLUTION
The following incomplete Work in Process account is provided for the Blending Department for March:
Work in Process—Blending
March 1 balance
32,800
Completed and transferred to Bottling (760,000 ounces)
?
Materials
147,600
Direct labor
73,200
Overhead
481,000
March 31 balance
?
The $32,800 beginning inventory in the Blending Department consisted of the following elements: materials, $8,000; direct labor, $4,000; and overhead applied, $20,800.
Costs incurred during March in the Bottling Department were: materials used, $45,000; direct labor, $17,000; and overhead cost applied to production, $108,000.
Required:
1.
Prepare journal entries to record the costs incurred in both the Blending Department and Bottling Department during March. (Omit the \"$\" sign in your response.)
a.
Raw materials were issued for use in production.
b.
Direct labor costs were incurred.
c.
Manufacturing overhead costs for the entire factory were incurred, $596,000. (Credit Accounts Payable and use a single Manufacturing Overhead control account for the entire factory.)
d.
Manufacturing overhead was applied to production using a predetermined overhead rate.
e.
Units that were complete with respect to processing in the Blending Department were transferred to the Bottling Department, $722,000.
f.
Units that were complete with respect to processing in the Bottling Department were transferred to Finished Goods, $920,000.
g.
Completed units were sold on account for $1,400,000. The cost of goods sold was $890,000.
2.
Post the journal entries from (1) above to T-accounts. The following account balances existed at the beginning of March. (The beginning balance in the Blending Department’s Work in Process account is given above.) (Record the transactions in the given order. Omit the \"$\" sign in your response.)
Click here for the SOLUTION
Selected T-accounts for Rolm Company are given below for the just completed year:
Selected T-accounts for Rolm Company are given below for the just completed year:
Raw Materials
Manufacturing Overhead
Bal. 1/1 30,000
Credits ?
Debits 385,000
Credits ?
Debits 420,000
Bal. 12/31 60,000
Work in Process
Factory Wages Payable
Bal. 1/1 70,000
Credits 810,000
Debits 179,000
Bal. 1/1 10,000
Direct materials 320,000
Credits 175,000
Direct labor 110,000
Overhead 400,000
Bal. 12/31 6,000
Bal. 12/31 ?
Finished Goods
Cost of Goods Sold
Bal. 1/1 40,000
Credit ?
Debits ?
Debits ?
Bal. 12/31 130,000
Required:
1.
What was the cost of raw materials put into production during the year? (Omit the \"$\" sign in your response.)
2.
How much of the materials in (1) above consisted of indirect materials? (Omit the \"$\" sign in your response.)
3.
How much of the factory labor cost for the year consisted of indirect labor? (Omit the \"$\" sign in your response.)
4.
What was the cost of goods manufactured for the year? (Omit the \"$\" sign in your response.)
5.
What was the cost of goods sold for the year (before considering underapplied or overapplied overhead)? (Omit the \"$\" sign in your response.)
6.
If overhead is applied to production on the basis of direct materials cost, what rate was in effect during the year? (Omit the \"%\" sign in your response.)
7.
Was manufacturing overhead underapplied or overapplied? By how much? (Input the amount as a positive value. Omit the \"$\" sign in your response.)
8.
Compute the ending balance in the work in process inventory account. Assume that this balance consists entirely of goods started during the year. If $32,000 of this balance is direct materials cost, how much of it is direct labor cost? Manufacturing overhead cost? (Omit the \"$\" sign in your response.)
Click here for the SOLUTION
Raw Materials
Manufacturing Overhead
Bal. 1/1 30,000
Credits ?
Debits 385,000
Credits ?
Debits 420,000
Bal. 12/31 60,000
Work in Process
Factory Wages Payable
Bal. 1/1 70,000
Credits 810,000
Debits 179,000
Bal. 1/1 10,000
Direct materials 320,000
Credits 175,000
Direct labor 110,000
Overhead 400,000
Bal. 12/31 6,000
Bal. 12/31 ?
Finished Goods
Cost of Goods Sold
Bal. 1/1 40,000
Credit ?
Debits ?
Debits ?
Bal. 12/31 130,000
Required:
1.
What was the cost of raw materials put into production during the year? (Omit the \"$\" sign in your response.)
2.
How much of the materials in (1) above consisted of indirect materials? (Omit the \"$\" sign in your response.)
3.
How much of the factory labor cost for the year consisted of indirect labor? (Omit the \"$\" sign in your response.)
4.
What was the cost of goods manufactured for the year? (Omit the \"$\" sign in your response.)
5.
What was the cost of goods sold for the year (before considering underapplied or overapplied overhead)? (Omit the \"$\" sign in your response.)
6.
If overhead is applied to production on the basis of direct materials cost, what rate was in effect during the year? (Omit the \"%\" sign in your response.)
7.
Was manufacturing overhead underapplied or overapplied? By how much? (Input the amount as a positive value. Omit the \"$\" sign in your response.)
8.
Compute the ending balance in the work in process inventory account. Assume that this balance consists entirely of goods started during the year. If $32,000 of this balance is direct materials cost, how much of it is direct labor cost? Manufacturing overhead cost? (Omit the \"$\" sign in your response.)
Click here for the SOLUTION
Southworth Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production
Southworth Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated $226,500 of manufacturing overhead for an estimated allocation base of $151,000 direct material dollars.
The following transactions took place during the year (all purchases and services were acquired on account):
a.
Raw materials purchased, $144,000.
b.
Raw materials requisitioned for use in production (all direct materials), $149,000.
c.
Utility bills incurred in the factory, $21,000.
d.
Costs for salaries and wages were incurred as follows:
Direct labor
$
222,000
Indirect labor
$
95,200
Selling and administrative salaries
$
144,000
e.
Maintenance costs incurred in the factory, $16,000.
f.
Advertising costs incurred, $121,000.
g.
Depreciation recorded for the year, $45,000 (70% relates to factory assets, and the remainder relates to selling and administrative assets).
h.
Rental cost incurred on buildings, $81,000 (80% of the space is occupied by the factory, and 20% is occupied by sales and administration).
i.
Miscellaneous selling and administrative costs incurred, $13,000.
j.
Manufacturing overhead cost was applied to jobs, $ ?
k.
Cost of goods manufactured for the year, $560,000.
l.
Sales for the year (all on account) totaled $1,400,000. These goods cost $520,000 according to their job cost sheets.
The balances in the inventory accounts at the beginning of the year were as follows:
Raw materials
$
15,000
Work in process
$
22,000
Finished Goods
$
40,000
Required:
1.
Prepare journal entries to record the above data. (Omit the \"$\" sign in your response.)
2.
Post your entries to T-accounts. (Don’t forget to enter the opening inventory balances above.) Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account. (Record the transactions in the given order. Omit the \"$\" sign in your response.)
3.
Prepare a schedule of cost of goods manufactured. (Input all amounts as positive values. Omit the \"$\" sign in your response.)
4.
Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of cost of goods sold. (Input all amounts as positive values. Omit the \"$\" sign in your response.)
5.
Prepare an income statement for the year. (Input all amounts as positive values. Omit the \"$\" sign in your response.)
6.
Job 218 was one of the many jobs started and completed during the year. The job required $3,800 in direct materials and 500 hours of direct labor time at a rate of $12 per hour. If the job contained 590 units and the company billed at 70% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer? (Round your answer to 2 decimal places. Omit the \"$\" sign in your response.)
Click here for the SOLUTION
The following transactions took place during the year (all purchases and services were acquired on account):
a.
Raw materials purchased, $144,000.
b.
Raw materials requisitioned for use in production (all direct materials), $149,000.
c.
Utility bills incurred in the factory, $21,000.
d.
Costs for salaries and wages were incurred as follows:
Direct labor
$
222,000
Indirect labor
$
95,200
Selling and administrative salaries
$
144,000
e.
Maintenance costs incurred in the factory, $16,000.
f.
Advertising costs incurred, $121,000.
g.
Depreciation recorded for the year, $45,000 (70% relates to factory assets, and the remainder relates to selling and administrative assets).
h.
Rental cost incurred on buildings, $81,000 (80% of the space is occupied by the factory, and 20% is occupied by sales and administration).
i.
Miscellaneous selling and administrative costs incurred, $13,000.
j.
Manufacturing overhead cost was applied to jobs, $ ?
k.
Cost of goods manufactured for the year, $560,000.
l.
Sales for the year (all on account) totaled $1,400,000. These goods cost $520,000 according to their job cost sheets.
The balances in the inventory accounts at the beginning of the year were as follows:
Raw materials
$
15,000
Work in process
$
22,000
Finished Goods
$
40,000
Required:
1.
Prepare journal entries to record the above data. (Omit the \"$\" sign in your response.)
2.
Post your entries to T-accounts. (Don’t forget to enter the opening inventory balances above.) Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account. (Record the transactions in the given order. Omit the \"$\" sign in your response.)
3.
Prepare a schedule of cost of goods manufactured. (Input all amounts as positive values. Omit the \"$\" sign in your response.)
4.
Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of cost of goods sold. (Input all amounts as positive values. Omit the \"$\" sign in your response.)
5.
Prepare an income statement for the year. (Input all amounts as positive values. Omit the \"$\" sign in your response.)
6.
Job 218 was one of the many jobs started and completed during the year. The job required $3,800 in direct materials and 500 hours of direct labor time at a rate of $12 per hour. If the job contained 590 units and the company billed at 70% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer? (Round your answer to 2 decimal places. Omit the \"$\" sign in your response.)
Click here for the SOLUTION
Subscribe to:
Posts (Atom)