The production of Job ACE went much better than planned. In fact, there was a fair amount of good, usable material left over. Doroth the production manager, pulled $40 of material from inventory, but used just $29 of material, along with $35 of DL and $12 of MOH. Dorothy believes the material should be put back into circulation, as it could be usable on a different job in the future. If the scrap material is put back into inventory, what is the journal entry to record the completion of Job ACE and the reclassification of material i the company uses the production method to account for scrap? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for th amounts. List all debit entries before credit entries.) Account Titles and Explanation RM Inventory Debit Credit

The production of Job ACE went much better than planned. In fact, there was a fair amount of good, usable material left over. Doroth the production manager, pulled $40 of material from inventory, but used just $29 of material, along with $35 of DL and $12 of MOH. Dorothy believes the material should be put back into circulation, as it could be usable on a different job in the future. If the scrap material is put back into inventory, what is the journal entry to record the completion of Job ACE and the reclassification of material i the company uses the production method to account for scrap? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for th amounts. List all debit entries before credit entries.) Account Titles and Explanation RM Inventory Debit Credit

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 51E: Jackie Iverson was furious. She was about ready to fire Tom Rich, her purchasing agent. Just a month...

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Danielle Hastings was recently hired as a cost analyst by CareNet Medical Supplies Inc. One of Danielle’s first assignments was to perform a net present value analysis for a new warehouse. Danielle performed the analysis and calculated a present value index of 0.75. The plant manager, Jerrod Moore, is very intent on purchasing the warehouse because he believes that more storage space is needed. Jerrod asks Danielle into his office and the following conversation takes place: Jerrod: Danielle, you’re new here, aren’t you? Danielle: Yes, I am. Jerrod: Well, Danielle, I’m not at all pleased with the capital investment analysis that you performed on this new warehouse. I need that warehouse for my production. If I don’t get it, where am I going to place our output? Danielle: Well, we need to get product into our customers’ hands. Jerrod: I agree, and we need a warehouse to do that. Danielle: My analysis does not support constructing a new warehouse. The numbers don’t lie; the warehouse does…
Jackie Iverson was furious. She was about ready to fire Tom Rich, her purchasing agent. Just a month ago, she had given him a salary increase and a bonus for his performance. She had been especially pleased with his ability to meet or beat the price standards. But now, she found out that it was because of a huge purchase of raw materials. It would take months to use that inventory, and there was hardly space to store it. In the meantime, space had to be found for the other materials supplies that would be ordered and processed on a regular basis. Additionally, it was a lot of capital to tie up in inventorymoney that could have been used to help finance the cash needs of the new product just coming online. Her interview with Tom was frustrating. He was defensive, arguing that he thought she wanted those standards met and that the means were not that important. He also pointed out that quantity purchases were the only way to meet the price standards. Otherwise, an unfavorable variance would have been realized. Required: 1. CONCEPTUAL CONNECTION Why did Tom Rich purchase the large quantity of raw materials? Do you think that this behavior was the objective of the price standard? If not, what is the objective(s)? 2. CONCEPTUAL CONNECTION Suppose that Tom is right and that the only way to meet the price standards is through the use of quantity discounts. Also, assume that using quantity discounts is not a desirable practice for this company. What would you do to solve this dilemma? 3. CONCEPTUAL CONNECTION Should Tom be fired? Explain.
As a cost accountant for San Francisco Cannery, you have been approached by Phil Perriman, canning room supervisor, about the 2020 costs charged to his department. In particular, he is concerned about the line item “depreciation.” Perriman is very proud of the excellent condition of his canning room equipment. He has always been vigilant about keeping all equipment serviced and well oiled. He is sure that the huge charge to depreciation is a mistake; it does not at all reflect the cost of minimal wear and tear that the machines have experienced over the last year. He believes that the charge should be considerably lower. The machines being depreciated are six automatic canning machines. All were put into use on January 1, 2020. Each cost $625,000, having a salvage value of $55,000 and a useful life of 12 years. San Francisco depreciates this and similar assets using double-declining-balance depreciation. Perriman has also pointed out that if you used straight-line depreciation, the…
Muscat Tubes Manufacturing LLC is a manufacturer of television picture tubes. The company must keep various types of materials on hand for the manufacturing process. The store manager is having difficulty keeping track of all the inventory. When compared to last year, the amount of material lost has increased, which is a source of concern for the store manager. He wishes to employ an effective tool for controlling material loss. While exploring, he came across the concept of ABC analysis, which is used by many MNCs around the world. Because he has no background in costing, he is unable to grasp the concept. He asked you to explain the following because you are the company's cost accounting executive: Working/Application of ABC analysis?
Barbara, the manager of Metlock, is analyzing the company's MOH costs from last year. Metlock had always followed an actual costing system when determining the costs of its customizable telescopes. Barbara wondered if it would be better to switch to a normal costing system, as she had heard a number of people talking about that at an industry conference she attended the previous month. Since Metlock has a highly machine-intensive operation, machine hours are used as its MOH cost driver. Here are the costs and other MOH information Barbara is analyzing: Budgeted MOH cost Actual MOH cost Budgeted machine hours Actual machine hours $426,240 Actual MOH rate $ 419,040 Determine the actual MOH rate and the budgeted MOH rate Metlock would have used last year under actual costing and normal costing, respectively. (Round answers to 2 decimal places, e.g. 52.75.) Budgeted MOH rate $ 96,000 108,000 /machine hour /machine hour
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Lisa is a contractor, and she owns a small home renovation company that specializes in kitchen renovations. Lisa fears she has been underbidding her projects, and that translates into lost profits that could help sustain her through slow periods. She is putting together an estimate for a potential client and has determined the following activities: Activity Cost Driver Rate Estimated Use for Job Demo of Existing Space Square Footage $3.26 /square foot 520 square feet Cabinet Installation # of Hours $205 /hour 8 hours Countertop Installation Square Footage $12.00/square foot 280 square feet Previously, Lisa was billing at a flat rate of $16 per square foot of the demo space with no additional markup. Lisa would like to add a 20% markup to the cost to arrive at the final bid price. Using Activity-Based Costing (ABC), what is the final bid price for her potential customer? (Round intermediate calculations and final answer to 2 decimal places, eg. 25,000.25.) Final bid price $
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"Blast it!" said Amy Wilson, president of a custom furniture design company, Wilson Woodworking. "We've just lost the bid on the Kooper's cabinet by $2,000. It seems we're either too high to get the job or too low to make any money on the jobs we bid. I just don't understand what we are doing wrong!" Wilson Woodworking manufactures cabinets to customers' specifications and uses a job-order costing system. 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 following estimates were made at the beginning of the year: Manufacturing overhead Direct labor Jobs require varying amounts of work in the three departments. The Kooper's cabinet job, for example, would have required manufacturing costs in the three departments as follows: Direct materials Direct labor Manufacturing overhead Direct materials. Direct labor Manufacturing overhead Department Fabricating Machining Assembly Total…
Carol Creedence, the plant manager of the Clearwater Company’s Revival plant, has prepared the following graph of the unit costs from the job cost reports for the plant’s highest volume product, Product CCR: Attachment Carol is concerned about the erratic and increasing cost of Product CCR and has asked for your help. Prepare a half-page memo to Carol, interpreting this graph and requesting any additional information that might be needed to explain this situation.