Cost Cost Object Direct Cost Indirect Cost Ex. The new plant would slash variable expenses per ball by 40%, but it would cause fixed expenses per year to double. The costs per equivalent unit for the month were: Materials Conversion Cost per equivalent unit. The company uses the weighted-average method in its process costing system. Required: For each of the 12 decisions in Exhibit P—2, provide an example of how that type of decision might be applicable to a university setting. The company has two processing departments—Cooking and Molding.
A great deal of money has been spent in the effort to upgrade quality, and management is anxious to see whether or not the effort has been effective. Mary manages the plant located in Des Moines, Iowa, while Gary manages the plant in El Segundo, California. During this phone call you are informed that Oregon Coastal University is on the verge of making a job offer to Dr. To illustrate this point, assume that you are a senior leader, such as a president, provost, or dean, in a university setting. Carry all computations to one decimal place. Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.
Required: For each cost incurred at Northwest Hospital, indicate whether it would most likely be a direct cost or an indirect cost of the specified cost object by placing an X in the appropriate column. The company uses the weighted-average method in its process costing system. Beginning work in process inventory consisted of 2,000 units and ending work in process inventory consisted of 1,000 units. Four months later while preparing your tax returns for the prior year, you stop to contemplate the fact that the Internal Revenue Service requires taxpayers to report all gambling winnings on Form 1040. Cost of electricity to run the X-ray machines. Pat: That is a worry, but I wanted to talk to both of you first before going over to Marketing. Buy the solutions manual and become a homework master today! Do any or all of these scenarios sound familiar? In the prologue, these 12 decisions were discussed within the context of forprofit companies; however, they are also readily applicable to nonprofit organizations.
If actual sales are less than budgeted sales, it will diminish your financial compensation and potential for promotion. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead assumed to be all fixed to jobs. The company uses a joborder costing system and applies manufacturing overhead cost to products on the basis of machinehours. Its estimated costs, by quarter, for the coming year are given below: Machine-hours required to support estimated production. Data for the Assembly Department for May appear below: Materials Labor Overhead Work in process, May 1.
Sometimes you forget the material that you previously learned in class. If done correctly, the unadjusted cost of goods sold from your schedule should agree with which of the above transactions? Do not round off your computations. Then compute predetermined overhead rates in the two operating departments. The company considers all of its manufacturing overhead costs to be fixed costs. The remaining 7,500 batteries withdrawn from the storeroom were placed in cars being produced by the company. The salary of the head of the Radiology Department. The following incomplete Work in Process account is available for the Refining Department for March: Work in Process—Refining Department March 1 balance 38,000 Completed and transferred to Blending? P—15 Why is ethical behavior important to business? The company has enough customer demand to justify producing its full capacity of 2,000 sets per year.
Carter, the general manager, why the step-down method provides a better basis for computing predetermined overhead rates than the direct method. Do you believe that your actions are ethical? Listed below are some of the costs that are incurred at the company. The company uses the weighted-average method in its process costing. Besides, there are going to be over 430,000 direct labor-hours during the current year and sales are projected to be higher next year. The May 1 work in process inventory was 100% complete with respect to materials and 30% complete with respect to conversion. If actual sales exceed the sales budget, it bodes well for your career.
Cups of Coffee Served in a Week 2,000 2,100 2,200 Fixed cost. P—19 Why do companies take a physical count of their inventory on hand at least once per year? P—16 If you were a restaurant owner, what internal controls would you implement to help maintain control of your cash? In the Pulping Department, raw materials such as wood fiber and rag cotton are mechanically and chemically treated to separate their fibers. When it applies more overhead to production than it actu- ally incurs, it results in overapplied overhead. It withdrew 7,600 batteries from the storeroom during the month. Required: Prepare a cost reconciliation report for the Baking Department for June. Material and labor costs per unit are as follows: Model Deluxe Regular Direct materials. The production manager says she will need about 440,000 direct labor-hours to meet the sales projections for the year.
The following information was available with respect to this job: Compute the total manufacturing cost assigned to Job P90. The fourth step is to compute the predeter- mined overhead rate. The center is organized into a number of departments, one of which is the Meals-On-Wheels program that delivers hot meals to seniors in their homes on a daily basis. Solutions Manuals are available for thousands of the most popular college and high school textbooks in subjects such as Math, Science , , , Engineering , , , and more. P—9 Pick any large company and describe three risks that it faces and how it responds to those risks. In computing the dollar amount for this entry, remember that the cost of a completed job consists of direct materials, direct labor, and applied overhead. Calculate the ending balances at December 31 for all balance sheet accounts.
Determine the ending balances in the inventory accounts and in the Manufacturing Overhead account. The spiced meat mixture is then transferred to the Casing and Curing Department, where the mixture is force-fed into casings and then hung and cured in climate-controlled smoking chambers. Chapter Two Job-Order Costing: Calculating Unit Product Costs Questions 2—1 What is job-order costing? At the beginning of the year, it made the following estimates: Estimated Data Assembly Fabrication Total Manufacturing overhead costs. At the beginning of the year, the company made the following estimates: Machine-hours required to support estimated production. After cooling, the truffles are packed for sale. P—7 Pick any large company and describe its strategy using one of the three customer value propositions defined in the prologue.
It will drop the costs on all of our products. A total of 1,000 units were produced in Job 313. Its direct materials consist of hardware and software that it purchases and installs on behalf of its clients. She discussed the situation with her management colleagues; the consensus was to ignore reporting this inventory as obsolete because reporting it would diminish the financial results and their bonuses. A total of 30,000 machine-hours were used in October. Direct or Indirect Cost of the Mealson- Wheels Program Direct or Indirect Cost of Particular Seniors Served by the Meals-on- Wheels Program Variable or Fixed with Respect to the Number of Seniors Served by the Mealson- Wheels Program Item Description Direct Indirect Direct Indirect Variable Fixed Example The cost of groceries used in meal preparation.