CanCo Company manufactures a single product. The company keeps careful records of manufacturing activities, from which the following information has been extracted: Number of units produced Cost of goods manufactured Work-in-process inventory, beginning Work-in-process inventory, ending Direct materials cost per unit Direct labour cost per unit Manufacturing overhead cost, total Level of Activity March Manufacturing overhead cost 5,200 $260,800 31,000 53,000 9 11 ? July 9,400 The company's manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning, management wants to determine how much of the overhead cost is variable with units produced and how much of it is fixed per month. X Cost of goods manufactured $399,000 23,000 16,000 Required: 1. For both March and June, determine the amount of manufacturing overhead cost added to production. (Hint: A useful way to proceed might be to construct a schedule of cost of goods manufactured.) 9 11 ? Answer is complete but not entirely correct. March 282,800 $ 2. By means of the high-low method of cost analysis, estimate a cost formula for manufacturing overhead. Express the variable portion of the formula in terms of a variable rate per unit of product. July 392,000 X 3. Assume that CanCo produced 8,200 units in September. What will be the cost of goods manufactured? (Assume that beginning and ending work-in-process Inventories were $18,100 and $10,100 respectively.)
CanCo Company manufactures a single product. The company keeps careful records of manufacturing activities, from which the following information has been extracted: Number of units produced Cost of goods manufactured Work-in-process inventory, beginning Work-in-process inventory, ending Direct materials cost per unit Direct labour cost per unit Manufacturing overhead cost, total Level of Activity March Manufacturing overhead cost 5,200 $260,800 31,000 53,000 9 11 ? July 9,400 The company's manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning, management wants to determine how much of the overhead cost is variable with units produced and how much of it is fixed per month. X Cost of goods manufactured $399,000 23,000 16,000 Required: 1. For both March and June, determine the amount of manufacturing overhead cost added to production. (Hint: A useful way to proceed might be to construct a schedule of cost of goods manufactured.) 9 11 ? Answer is complete but not entirely correct. March 282,800 $ 2. By means of the high-low method of cost analysis, estimate a cost formula for manufacturing overhead. Express the variable portion of the formula in terms of a variable rate per unit of product. July 392,000 X 3. Assume that CanCo produced 8,200 units in September. What will be the cost of goods manufactured? (Assume that beginning and ending work-in-process Inventories were $18,100 and $10,100 respectively.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:CanCo Company manufactures a single product. The company keeps careful records of manufacturing activities, from which the
following Information has been extracted:
Number of units produced
Cost of goods manufactured
Work-in-process inventory, beginning
Work-in-process inventory, ending
Direct materials cost per unit
Direct labour cost per unit
Manufacturing overhead cost, total
Manufacturing overhead cost
Y=
Level of Activity
March
The company's manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning,
management wants to determine how much of the overhead cost is variable with units produced and how much of it is fixed per
month.
$
5,200
$260,800
31,000
53,000
Required:
1. For both March and June, determine the amount of manufacturing overhead cost added to production. (Hint: A useful way to
proceed might be to construct a schedule of cost of goods manufactured.)
Cost of goods manufactured
Answer is complete but not entirely correct.
July
March
X
9
11
?
July
9,400
$399,000
23,000
16,000
282,800 s
9
11
?
2. By means of the high-low method of cost analysis, estimate a cost formula for manufacturing overhead. Express the variable portion
of the formula in terms of a variable rate per unit of product.
392,000
3. Assume that CanCo produced 8,200 units in September. What will be the cost of goods manufactured? (Assume that beginning and
ending work-in-process Inventories were $18,100 and $10,100 respectively.)
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