AirQual Test Corporation provides on-site air quality testing services. The company provided the following cost formulas and actua results for the month of February Fixed Variable Component Component per Actual Total per Month Job for February Revenue $ 277 $ 38,800 Technician wages $ 8,400 $ 8,250 Mobile lab operating expenses $ 4,800 $ 34 $ 9,740 Office expenses $ 2,700 $ 3 $ 3,000 Advertising expenses $1,610 $ 1,680 Insurance $ 2,890 $ 2,890 Miscellaneous expenses $ 940 $ 2 $ 545 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $34 per job, and the actual mobile lab operating expenses for February were $9,740. The company expected to work 150 jobs in February but actually worked 156 jobs. Required: Prepare a flexible budget performance report for February. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. AirQual Test Corporation Flexible Budget Performance Report For the Month Ended February 28 Jobs Revenue Expenses: Technician wages Actual Results 156 $ 38,800 8,250 Flexible Planning Budget Budget

AirQual Test Corporation provides on-site air quality testing services. The company provided the following cost formulas and actua results for the month of February Fixed Variable Component Component per Actual Total per Month Job for February Revenue $ 277 $ 38,800 Technician wages $ 8,400 $ 8,250 Mobile lab operating expenses $ 4,800 $ 34 $ 9,740 Office expenses $ 2,700 $ 3 $ 3,000 Advertising expenses $1,610 $ 1,680 Insurance $ 2,890 $ 2,890 Miscellaneous expenses $ 940 $ 2 $ 545 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $34 per job, and the actual mobile lab operating expenses for February were $9,740. The company expected to work 150 jobs in February but actually worked 156 jobs. Required: Prepare a flexible budget performance report for February. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. AirQual Test Corporation Flexible Budget Performance Report For the Month Ended February 28 Jobs Revenue Expenses: Technician wages Actual Results 156 $ 38,800 8,250 Flexible Planning Budget Budget

Name: Hardev SavedAirQual Test Corporation provides on-site air quality test
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Description: Hardev SavedAirQual Test Corporation provides on-site air quality testing services. The company provided the following cost formulas and actualresults for the month of February:FixedVariableComponent Component per Actual Totalper MonthJobfor February

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter6: Process Costing

Section: Chapter Questions

Problem 16E: Heap Company manufactures a product that passes through two processes: Fabrication and Assembly. The...

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Crane, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 200 pressure gauges were produced, and overhead costs of $88,010 were estimated. An analysis of estimated overhead costs reveals the following activities. 1. M Materials handling Machine setups Quality inspections 2. 3. Activities (a) The cost driver volume for each product was as follows. Cost Drivers Number of requisitions Number of setups Number of inspections Materials handling Cost Drivers Machine setups Number of requisitions Number of setups Number of inspections Quality inspections $ Instruments Gauges 390 200 240 640 Determine the overhead rate for each activity. 295 265 Total Cost $37,080 28,710 22,220 $88,010 Total 1,030 495 505 Overhead Rate per requisition per setup per inspection
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February: The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,600 plus $31 per job, and the actual mobile lab operating expenses for February were $8,780. The company expected to work 140 jobs in February, but actually worked 146 jobs. Required: Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February.
Colorado Slim Company uses an Activity-based Costing System and has budgeted the following overhead activities and costs for the year:ActivityBudgeted CostDriverBudgeted DriverRateSetup $ 400,000 # of setups400 setupsInspection $ 48,000 Inspect. Hours4,000 Inspection HoursGrinding $ 130,000 Machine Hours130,000 Machine HoursReceiving $ 50,000 # of Parts12,500 parts usedThe company produces two different products called Red and Blue. The following information was collected during the month of May:RedBlueNumber of units completed180800Number of setups for the month119Number of inspection hours for the month400900Number of machine hours for the month1,2004,000Number of parts used in May3101,600Required: Calculate the rates in the table above and assign the appropriate overhead cost for May to the two products in the table below.RedBlueSetup Costs _________ ____________Inspection Costs __________ ____________Grinding Costs___________ ____________Receiving Costs ___________ ___________
Dublin Brewing Co. uses the process cost system. The following data, taken from the organizations books, reflect the results of manufacturing operations during October: Production Costs Work in process, beginning of period: Costs incurred during month: Production Data: 13,000 units finished and transferred to stockroom Work in process, end of period, 2,000 units one-half completed Required: Prepare a cost of production summary for October.
Kokomo Kayak Inc. uses the process cost system. The following data, taken from the organizations books, reflect the results of manufacturing operations during the month of March: Production Costs Work in process, beginning of period: Costs incurred during month: Production Data: 18,000 units finished and transferred to stockroom. Work in process, end of period, 3,000 units, two-thirds completed. Required: Prepare a cost of production summary for March.
Using the same data found in Exercise 6.22, assume the company uses the FIFO method. Required: Prepare a schedule of equivalent units, and compute the unit cost for the month of December. Fordman Company has a product that passes through two processes: Grinding and Polishing. During December, the Grinding Department transferred 20,000 units to the Polishing Department. The cost of the units transferred into the second department was 40,000. Direct materials are added uniformly in the second process. Units are measured the same way in both departments. The second department (Polishing) had the following physical flow schedule for December: Costs in beginning work in process for the Polishing Department were direct materials, 5,000; conversion costs, 6,000; and transferred in, 8,000. Costs added during the month: direct materials, 32,000; conversion costs, 50,000; and transferred in, 40,000.
Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet: Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 274,000 pounds at 2.50 per pound c. Direct materials used: 270,300 pounds d. Direct labor: 40,100 hours at 17.95 per hour e. Fixed overhead: 161,700 f. Variable overhead: 122,000 Required: 1. Compute price and usage variances for direct materials. 2. Compute the direct labor rate and labor efficiency variances. 3. Compute the fixed overhead spending and volume variances. Interpret the volume variance. 4. Compute the variable overhead spending and efficiency variances. 5. Prepare journal entries for the following: a. The purchase of direct materials b. The issuance of direct materials to production (Work in Process) c. The addition of direct labor to Work in Process d. The addition of overhead to Work in Process e. The incurrence of actual overhead costs f. Closing out of variances to Cost of Goods Sold
Plata Company has identified the following overhead activities, costs, and activity drivers for the coming year: Plata produces two models of microwave ovens with the following activity demands: The companys normal activity is 21,000 machine hours. Calculate the total overhead cost that would be assigned to Model X using an activity-based costing system: a. 230,000 b. 240,000 c. 280,000 d. 190,000
Baxter Company has two processing departments: Assembly and Finishing. A predetermined overhead rate of 10 per DLH is used to assign overhead to production. The company experienced the following operating activity for April: a. Materials issued to Assembly, 24,000 b. Direct labor cost: Assembly, 500 hours at 9.20 per hour; Finishing, 400 hours at 8 per hour c. Overhead applied to production d. Goods transferred to Finishing, 32,500 e. Goods transferred to finished goods warehouse, 20,500 f. Actual overhead incurred, 10,000 Required: 1. Prepare the required journal entries for the preceding transactions. 2. Assuming Assembly and Finishing have no beginning work-in-process inventories, determine the cost of each departments ending work-in-process inventories.
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?
Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was 260,000, and budgeted direct labor hours were 20,000. The average wage rate for direct labor is expected to be 25 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 130 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month. Required: 1. Calculate the balance in Work in Process as of June 30. 2. Calculate the balance in Finished Goods as of June 30. 3. Calculate the cost of goods sold for June. 4. Calculate the price charged for Job 39. 5. What if the customer for Job 40 was able to pay for the job by June 30? What would happen to the balance in Finished Goods? What would happen to the balance of Cost of Goods Sold?
Ardt-Barger has a beginning work in process inventory of 5.500 units and transferred in 25,000 units before ending the month with 3.000 u flits that were 100% complete with regard to materials and 80% complete with regard to conversion costs. The cost per unit of material is $5.45, and the cost per unit for conversion is $6.20 per unit, Using the weighted-average method, prepare the companys process cost summary for the month.