Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 10, Problem 45P
Aqua float Corporation manufactures rafts for use in swimming pools. The
- Work-in-process inventory on November 1: none.
- Work-in-process inventory on November 30: 800 units (75 percent complete as to labor; material is issued at the beginning of processing).
- Units completed: 5,600 units.
- Purchases of materials: 50,000 kilograms for $249,250.
- Total actual labor costs: $300,760.
- Actual hours of labor: 36,500 hours.
- Direct-material quantity variance: $ 1,500 unfavorable.
Required:
- 1. Compute the following amounts. Indicate whether each variance is favorable or unfavorable.
- a. Direct-labor rate variance for November.
- b. Direct-labor efficiency variance for November.
- c. Actual kilograms of material used in the production process during November.
- d. Actual price paid per kilogram of direct material in November.
- e. Total amounts of direct-material and direct-labor cost transferred to Finished-Goods Inventory during November.
- f. The total amount of direct-material and direct-labor cost in the ending balance of Work-in-Process Inventory at the end of November.
- 2. Prepare
journal entries to record the following: - • Purchase of raw material.
- • Adding direct material to Work-in-Process Inventory.
- • Adding direct labor to Work-in-Process Inventory.
- • Recording of variances.
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ABC Company had 450 units of product on hand at January 1 costing P51 each. Purchases of Material A during the month of January were as follows: Units Unit Cost January 5 500 P52.00 January 13 550 P53.00 January 25 400 P54.00 Physical count on January 31 shows 550 units of Material A on hand. How much is the cost of materials issued to production under (A) FIFO method and (B) Average method?
Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows:
Materials:
(7 kilograms × $10 per kilogram)
$
70
Labor:
(3 hours × $22 per hour)
$
66
All materials are issued at the beginning of processing. The operating data shown below were taken from the records for July:
In-process beginning inventory
none
In-process ending inventory—90% complete as to labor
900
units
Units completed during the month
7,100
units
Budgeted output
8,600
units
Purchases of materials, in kilograms (AQ)
33,000
Total actual labor costs incurred
$
526,000
Direct labor hours worked (AQ)
22,000
hours
Materials purchase-price variance
$
2,900
unfavorable
Increase in materials inventory in July
1,300
kilograms
Beginning inventory of materials
0
kg.…
Matrix Inc. calculates cost for an equivalent unit of production using the FIFO method.
Data for July:
Work-in-process inventory, July 1 (36,000 units):
Direct materials (95% completed)
$
122,000
Conversion (48% completed)
77,500
Balance in work in process inventory, July 1
$
199,500
Units started during July
87,000
Units completed and transferred
98,350
Work-in-process inventory, July 31:
Direct materials (95% completed)
24,650
Conversion (48% completed)
Cost incurred during July:
Direct materials
$
185,650
Conversion costs
267,000
Cost per equivalent unit for conversion under the FIFO method is calculated to be:
Multiple Choice
a. $2.13.
b. $2.53.
c. $2.87.
d. $2.97.
Chapter 10 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 10 - Prob. 1RQCh. 10 - What is meant by the phrase management by...Ch. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - What is the interpretation of the direct-material...Ch. 10 - What manager is usually in the best position to...Ch. 10 - What is the interpretation of the direct-material...Ch. 10 - Prob. 10RQ
Ch. 10 - Prob. 11RQCh. 10 - What is the interpretation of the direct-labor...Ch. 10 - What manager is generally in the best position to...Ch. 10 - What is the interpretation of the direct-labor...Ch. 10 - What manager is generally in the best position to...Ch. 10 - Prob. 16RQCh. 10 - Describe five factors that managers often consider...Ch. 10 - Discuss several ways in which standard-costing...Ch. 10 - Describe how standard costs are used for product...Ch. 10 - Prob. 20RQCh. 10 - Prob. 21RQCh. 10 - Saskatewan Can Company manufactures recyclable...Ch. 10 - Refer to the data in the preceding exercise. Use...Ch. 10 - Cayuga Hardwoods produces handcrafted jewelry...Ch. 10 - During June, Danby Companys material purchases...Ch. 10 - Refer to the data in the preceding exercise. Draw...Ch. 10 - The director of cost management for Odessa Company...Ch. 10 - Due to evaporation during production, Plano...Ch. 10 - Prob. 30ECh. 10 - Refer to the data in Exercise 1022, regarding...Ch. 10 - Saskatewan Can Company manufactures recyclable...Ch. 10 - New Jersey Valve Company manufactured 7,800 units...Ch. 10 - Prob. 34PCh. 10 - During May, Joliet Fabrics Corporation...Ch. 10 - Sal Amato operates a residential landscaping...Ch. 10 - Santa Rosa Industries uses a standard-costing...Ch. 10 - The following data pertain to Colgate-Palmolives...Ch. 10 - Orion Corporation has established the following...Ch. 10 - Associated Media Graphics (AMG) is a rapidly...Ch. 10 - The director of cost management for Portland...Ch. 10 - Ogwood Companys Johnstown Division is a small...Ch. 10 - Quincy Farms produces items made from local farm...Ch. 10 - Schiffer Corporation manufactures agricultural...Ch. 10 - Aqua float Corporation manufactures rafts for use...Ch. 10 - Rocky Mountain Camping Equipment, Inc. has...Ch. 10 - Springsteen Company manufactures guitars. The...Ch. 10 - Springsteen Company manufactures guitars. The...Ch. 10 - European Styles, Inc. manufactures womens blouses...Ch. 10 - MacGyver Corporation manufactures a product called...
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