Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 6, Problem 6P
Monterrey Products Co. uses the
Required:
Prepare a cost of production summary, assuming that the production losses are considered to be normal.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Please assist with the remaining questions:
e) What is the balance in the Cost of Goods Sold account after the adjustment?
f) Compute Elite's gross profit earned on the jobs sold, after adjusting for the manufacturing overhead variance.
g) Post the appropriate entries to Work in Process Inventory account and determine the account balance on March 31 (end of the quarter).
Manor Painting is a commercial interior and exterior painting contractor specializing in commercial buildings. An inventory of materials
and equipment is on hand at all times, so work can start as quickly as possible. Special equipment is ordered as required. On August 1,
the Materials Inventory account had a balance of $55,300. The Work-in-Process Inventory account is maintained to record costs of
work not yet complete. There were two such jobs on August 1 with the following costs:
Materials and equipment
Direct labor
Overhead (applied)
Overhead has been applied at 40 percent of the costs of direct labor using an annual rate.
Materials and equipment
Direct labor (wages payable)
Job 84
$ 24,400
21,600
8,640
During August, Manor Painting started two new jobs. Additional work was carried out on Jobs 84 and 87. Job 87 was completed and
billed to the customer. Details on the costs incurred on jobs during August follow:
Property taxes
Storage area rental
Job 87
$ 80,100
40,700
16,280
Truck…
(f) Compute Elite’s gross profit earned on the jobs sold, after adjusting for the manufacturing overhead variance (g) Post the appropriate entries to Work in Process Inventory account & determine the account balance on March 31, the end of the quarter.
Chapter 6 Solutions
Principles of Cost Accounting
Ch. 6 - Under what conditions may the unit costs of...Ch. 6 - When is it necessary to use separate equivalent...Ch. 6 - Why is it usually reasonable to assume that labor...Ch. 6 - If materials are not put into process uniformly,...Ch. 6 - In what way do the cost of production summaries in...Ch. 6 - Why might the total number of units completed...Ch. 6 - What is the usual method of handling the cost of...Ch. 6 - If some units are normally lost during the...Ch. 6 - How is the cost of units normally lost reflected...Ch. 6 - Prob. 10Q
Ch. 6 - What adjustment must be made if materials added in...Ch. 6 - What is the difference between the unit costs are...Ch. 6 - What advantage does the FIFO cost method have over...Ch. 6 - How would you define each of the following? a....Ch. 6 - What are three methods of allocating joint costs?
Ch. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Using the data given for Cases 13 below, and...Ch. 6 - Precision Inc. manufactures wristwatches on an...Ch. 6 - The following data appeared in the accounting...Ch. 6 - Conte Chemical Co. uses the weighted average cost...Ch. 6 - Assuming that all materials are added at the...Ch. 6 - Foamy Inc. manufactures shaving cream and uses the...Ch. 6 - Calculating unit costs; units lost in production...Ch. 6 - Sonoma Products Inc. manufactures a liquid product...Ch. 6 - A company manufactures a liquid product called...Ch. 6 - Using the data given for Cases 1–3 and the FIFO...Ch. 6 - Assume each of the following conditions concerning...Ch. 6 - Adirondack Bat Co. processes rough timber to...Ch. 6 - Computing joint costssales value at split-off and...Ch. 6 - LeMoyne Manufacturing Inc.’s joint cost of...Ch. 6 - Making a journal entryby-product Petrone Metals...Ch. 6 - Espana Co. makes one main product, Uno, and a...Ch. 6 - Manufacturing data for January and February in the...Ch. 6 - Manufacturing data for June and July in the...Ch. 6 - On December 1, Carmel Valley Production Inc. had a...Ch. 6 - Akron Manufacturing Co. manufactures a...Ch. 6 - Green Products Inc. cans peas and uses the...Ch. 6 - Monterrey Products Co. uses the process cost...Ch. 6 - Prob. 7PCh. 6 - Daytona Beverages Inc. uses the FIFO cost method...Ch. 6 - Clearwater Candy Co. had a cost per equivalent...Ch. 6 - Mt. Palomar Manufacturing Co. uses a process cost...Ch. 6 - Otto Inc. specializes in chicken farming. Chickens...Ch. 6 - Otto Inc. specializes in chicken farming. Chickens...Ch. 6 - Venezuela Oil Inc. transports crude oil to its...Ch. 6 - Clark Kent Inc. buys crypton for $.80 a gallon. At...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Prepare a cost of production report for the Cutting Department of Dalton Carpet Company for January. Assuming that direct materials are placed in process during production, use the weighted average method with the following data:arrow_forwardSpokane Production Co. obtained the following information from its records for July: Required: 1. Prepare, in summary form, the journal entries that would have been made during the month to record issuing materials to production, the distribution of labor, and overhead costs; the completion of the jobs; and the sale of the jobs. 2. Prepare schedules computing the following for July: a. The gross profit or loss for each job completed and sold, and for the business as a whole. b. For each job, the gross profit or loss per unit. (Round to the nearest cent.)arrow_forwardDaytona Beverages Inc. uses the FIFO cost method and adds all materials, labor, and factory overhead evenly to production. A record of the factory operations for October follows: Required: Prepare a cost of production summary for the month.arrow_forward
- Job cost sheets show the following information: What are the balances in the work in process inventory, finished goods inventory, and cost of goods sold for January, February, and March?arrow_forwardBangor Products Co. obtained the following information from its records for April: Required: 1. Prepare, in summary form, the journal entries that would have been made during the month to record issuing materials to production, the distribution of labor, and overhead costs; the completion of the jobs; and the sale of the jobs. 2. Prepare schedules computing the following for April: a. The gross profit or loss for each job completed and for the business as a whole. b. For each job, the gross profit or loss per unit. (Round to the nearest cent.)arrow_forwardSummary information from a companys job cost sheets shows the following information: What are the balances in the work in process inventory, finished goods Inventory, and cost of goods sold for April, May, and June?arrow_forward
- Gerken Fabrication Inc. uses the job order cost system of accounting. The following information was taken from the companys books after all posting had been completed at the end of March: a. Compute the total production cost of each job. b. Prepare the journal entries to charge the costs of materials, labor, and factory overhead to Work in Process. c. Prepare the journal entry to transfer the cost of jobs completed to Finished Goods. d. Compute the unit cost of each job. e. Compute the selling price per unit for each job, assuming a mark-on percentage of 50%.arrow_forwardTanaka Manufacturing Co. uses the process cost system. The following information for the month of December was obtained from the company’s books and from the production reports submitted by the department heads: Required: Prepare cost of production summaries for the Mixing, Blending, and Bottling (Hint: You must calculate the adjusted unit cost from Blending.) departments. Prepare a departmental cost work sheet. Draft the journal entries required to record the month’s operations. Prepare a statement of cost of goods manufactured for December. (Hint: Goods finished but not transferred to finished goods are considered part of work in process inventory.)arrow_forwardGunnison Company had the following equivalent units schedule and cost information for its Sewing Department for the month of December: Required: 1. Calculate the unit cost for December, using the FIFO method. 2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for. 3. What if you were asked for the unit cost from the month of November? Calculate Novembers unit cost and explain why this might be of interest to management.arrow_forward
- The following information concerns production in the Finishing Department for May. The Finishing Department uses the weighted average method. a. Determine the number of units in work in process inventory at the end of the month. b. Determine the number of whole units to be accounted for and to be assigned costs and the equivalent units of production for May. Assume that direct materials are placed in process during production.arrow_forwardAero Aluminum Inc. uses a process cost system. The records for May show the following information: Required: Prepare a cost of production summary for each department. (Hint: When preparing the Converting production summary, refer to the Rolling production summary for the costs transferred in during the month.)arrow_forwardThe following information, taken from the books of Herman Brothers Manufacturing represents the operations for January: The job cost system is used, and the February cost sheet for Job M45 shows the following: The following actual information was accumulated during February: Required: 1. Using the January data, ascertain the predetermined factory overhead rates to be used during February, based on the following: a. Direct labor cost b. Direct labor hours c. Machine hours 2. Prepare a schedule showing the total production cost of Job M45 under each method of applying factory overhead. 3. Prepare the entries to record the following for February operations: a. The liability for total factory overhead. b. Distribution of factory overhead to the departments. c. Application of factory overhead to the work in process in each department, using direct labor hours. (Use the predetermined rate calculated in Requirement 1.) d. Closing of the applied factory overhead accounts. e. Recording under- and overapplied factory overhead and closing the actual factory overhead accounts.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage LearningManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
- Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY