Reference no: EM132286626
Description
Managerial Accounting focuses heavily on finding solutions to numerical problems. With that in mind, most units will include a number of problems.
For each problem, you will need to provide more than a simple numerical response. Your solutions should thoroughly address the issue and present the findings in a meaningful format similar to those developed within the chapters and as part of the review exercises solutions. Part value may be assigned for incorrect responses.
Question 1:
The following costs are attributed to the Gandalf and Company:
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Purchase of raw materials (all direct)
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$291,100
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Direct labour cost
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141,800
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Manufacturing overhead costs
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198,100
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Change in inventories:
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Decrease in raw materials
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$9,100
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Decrease in work in process
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4,100
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Decrease in finished goods
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13,200
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Gandalf and Company used a 120% predetermined overhead rate based on direct labour cost.
Required:
1) Calculate the cost of goods manufactured.
2) What was the cost of goods sold before adjusting for any under or over applied overhead?
3) By how much was manufacturing overhead cost under or over applied?
4) Prepare a summary journal entry to close any under or over applied manufacturing overhead cost to cost of goods sold. Is such an entry appropriate in this situation? Why or why not?
Question 2
The weighted-average method is used by the Cardiff and Company. Below you will find information provided by the Heating department for the month of March:
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Costs for March:
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Materials
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Conversion
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Work in process, March 1
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$19,200
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$23,100
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Added during the month
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$89,000
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$99,000
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Units
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Conversion percentage complete
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Work in process, March 1
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10,000
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50%
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Units started
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28,000
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Completed and transferred out
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19,900
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Work in process, March 31
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5,000
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30%
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Required:
Cardiff and Company using the weighted-average method, all materials at the first process:
1) The equivalent units (EUs) of production for materials.
2) The cost per equivalent unit for conversion.
3) The total cost assigned to units transferred out of the Heating Department during March.
4) The cost assigned to work-in-process inventory as of March 31.
Question 3:
Paddle Place manufactures paddles and tables. In December, the two production departments had budgeted allocation bases of 3,100 machine-hours in Paddle and 6,900 direct manufacturing labor-hours in Table. The budgeted manufacturing overheads for the month were $51,200 and $56,900, respectively. For Project X, the actual costs incurred in the two departments were as follows:
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Paddle
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Table
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Direct materials purchased on account
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$80,000
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$177,500
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Direct materials used
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21,200
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12,200
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Direct manufacturing labor
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41,900
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53,500
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Indirect manufacturing labor
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8,900
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9,000
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Indirect materials used
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5,100
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4,750
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Lease on equipment
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14,100
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3,750
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Utilities
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990
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1,250
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Project X incurred 900 machine-hours in Paddle and 200 manufacturing labor-hours in Table. The company uses a budgeted overhead rate for applying overhead to production.
Required:
1) Determine the budgeted manufacturing overhead rate for each department.
2) Prepare the journal entries for Paddle department.
3) What is the total cost of Project X?
Question 4:
Identify the following situations as "job-order costing" or "process costing"?
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Situation
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Job Order or Process Costing
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1) An oil refinery
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2) A soft-drink bottler
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3) A film studio
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4) A manufacturer of fine custom jewelry
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5) A textbook publisher
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6) A paint factory
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7) A golf course designer
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