Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 10, Problem 49C
European Styles, Inc. manufactures women’s blouses of one quality, which are produced in lots to fill each special order. Its customers are department stores in various cities. European Styles sews the particular stores’ labels on the blouses. During November, the company worked on three orders, for which the month’s job-cost records disclose the following data.
The following additional information is available:
- 1. The firm purchased 95,000 yards of material during November at a cost of $106,400.
- 2. Direct labor during November amounted to $165,000. According to payroll records, production employees were paid $15.00 per hour.
- 3. There was no work in process on November 1. During November, lots 22 and 23 were completed. All material was issued for lot 24, which was 80 percent completed as to direct labor.
- 4. The standard costs for a box of six blouses are as follows:
Required:
- 1. Prepare a schedule computing the
standard cost of lots 22, 23, and 24 for November. - 2. Prepare a schedule showing, for each lot produced during November:
- a. Direct-material purchase price variance.
- b. Direct-material quantity variance.
- c. Direct-labor efficiency variance.
- d. Direct-labor rate variance.
Indicate whether each variance is favorable or unfavorable.
- 3. Prepare
journal entries to record each of the following events.- Purchase of material.
- Incurrence of direct-labor cost.
- Addition of direct-material and direct-labor cost to Work-in-Process Inventory.
- Recording of direct-material and direct-labor variances.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Dillon Products manufactures various machined parts to customer specifications. The company uses a joborder costing system and applies overhead cost to jobs on the basis of machine-hours. At the beginning ofthe year, it was estimated that the company would work 240,000 machine-hours and incur $4,800,000 inmanufacturing overhead costs.The company spent the entire month of January working on a large order for 16,000 custom mademachined parts. The company had no work in process at the beginning of January. Cost data relating toJanuary follow:a. Raw materials purchased on account, $325,000.b. Raw materials requisitioned for production, $290,000 (80% direct materials and 20% indirect materials).c. Labor cost incurred in the factory, $180,000 (one-third direct labor and two-thirds indirect labor).d. Depreciation recorded on factory equipment, $75,000.e. Other manufacturing overhead costs incurred, $62,000 (credit Accounts Payable).f. Manufacturing overhead cost was applied to production on…
Dillon Products manufactures various machined parts to customer specifications.The company uses a job-order costing system and applies overhead cost to jobson the basis of machine-hours. At the beginning of the year, the company used acost formula to estimate that it would incur $4,290,000 in manufacturing overheadcost at an activity level of 572,000 machine-hours.The company spent the entire month of January working on a large order for12,200 custom-made machined parts. The company had no work in process at thebeginning of January. Cost data relating to January follow:
a. Raw materials purchased on account, $315,000.b. Raw materials used in production, $254,000 (80% direct materials and 20%indirect materials).c. Labor cost accrued in the factory, $177,000 (one-third direct labor and two-thirdsindirect labor).d. Depreciation recorded on factory equipment, $62,300.e. Other manufacturing overhead costs incurred on account, $84,200.f. Manufacturing overhead cost was applied to production…
Dillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur$4,800,000 in manufacturing overhead cost at an activity level of 240,000 machine-hours.The company spent the entire month of January working on a large order for 16,000 custommade machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow:a. Raw materials purchased on account, $325,000.b. Raw materials used in production, $290,000 (80% direct materials and 20% indirect materials).c. Labor cost accrued in the factory, $180,000 (one-third direct labor and two-thirds indirect labor).d. Depreciation recorded on factory equipment, $75,000.e. Other manufacturing overhead costs incurred on account, $62,000.f. Manufacturing overhead cost was applied to…
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...
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
- 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?arrow_forwardRockford Company has four departmental accounts: Building Maintenance, General Factory Overhead, Machining, and Assembly. The direct labor hour method is used to apply factory overhead to the jobs being worked on in Machining and Assembly. The company expects each production department to use 30,000 direct labor hours during the year. The estimated overhead rates for the year include the following: During the year, both Machining and Assembly used 28,000 direct labor hours. Factory overhead costs incurred during the year follow: In determining application rates at the beginning of the year, cost allocations were made as follows, using the sequential distribution method: Building Maintenance to: General Factory Overhead, 10%; Machining, 50%; Assembly, 40%. General factory overhead was distributed according to direct labor hours. Required: Determine the under- or overapplied overhead for each production department. (Hint: First you must distribute the service department costs.)arrow_forwardDillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur $4,800,000 in manufacturing overhead cost at an activity level of 240,000 machine-hours. The company spent the entire month of January working on a large order for 16,000 custom-made machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow: a. Raw materials purchased on account, $325,000. b. Raw materials used in production, $290,000 (80% direct materials and 20% indirect materials). c. Labor cost accrued in the factory, $180,000 (one-third direct labor and two-thirds indirect labor). d. Depreciation recorded on factory equipment, $75,000. e. Other manufacturing overhead costs incurred on account, $62,000. f. Manufacturing overhead cost was applied…arrow_forward
- Dillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur $4,225,600 in manufacturing overhead cost at an activity level of 556,000 machine-hours. The company spent the entire month of January working on a large order for 12,100 custom-made machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow: Raw materials purchased on account, $325,000. Raw materials used in production, $264,000 (80% direct materials and 20% indirect materials). Labor cost accrued in the factory, $153,000 (one-third direct labor and two-thirds indirect labor). Depreciation recorded on factory equipment, $62,100. Other manufacturing overhead costs incurred on account, $85,300. Manufacturing overhead cost was applied to production…arrow_forwardPost the relevant items from your journal entries to thes accounts. 3. Prepare a journal entry for item (g) above. 4. If 11,000 of the custom-made machined parts are shipped to the customer in February, how much of this job's cost will be inclu cost of goods sold for February? Answer is not complete. Complete the question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 If 11,000 of the custom-made machined parts are shipped to the customer in February, how much of this job's cost will be included in cost of goods sold for February? (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) Portion of job cost included in cost of goods sold 45 X < Required 3arrow_forwardDillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur $4,166,200 in manufacturing overhead cost at an activity level of 563,000 machine-hours. The company spent the entire month of January working on a large order for 12,900 custom-made machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow: a. Raw materials purchased on account, $316,000. b. Raw materials used in production, $256,000 (80% direct materials and 20% Indirect materials). c. Labor cost accrued in the factory, $153,000 (one-third direct labor and two-thirds Indirect labor). d. Depreciation recorded on factory equipment, $62,600. e. Other manufacturing overhead costs incurred on account, $85,300. f. Manufacturing overhead cost was applied…arrow_forward
- Dillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur $4,210,600 in manufacturing overhead cost at an activity level of 569,000 machine-hours. The company spent the entire month of January working on a large order for 12,800 custom-made machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow: a. Raw materials purchased on account, $312,000. b. Raw materials used in production, $255,000 (80% direct materials and 20% indirect materials). c. Labor cost accrued in the factory, $171,000 (one-third direct labor and two-thirds indirect labor). d. Depreciation recorded on factory equipment, $63,100. e. Other manufacturing overhead costs incurred on account, $85,500. f. Manufacturing overhead cost was applied…arrow_forwardVeggie functions and uses job order costing for its clients. The company budgets overhead costs of $15,000 per month and direct labor hours of 3,000 to allocate overhead costs to the jobs. During the month, the company had the following transactions: a. Raw material purchased for cash $35,000. b. Material requisitions were a total of $26,550, of which $25,250 were for Job No. 100: $10,000 Job No. 200: $8,500 Job No. 300: $6,750 Direct labor wages accrued at $15 per direct labor hour. d. Other overhead costs recorded for the month were as follows: Accrued property taxes $750 Building and machine depreciation $4,800 Insurance expired $850 e. Manufacturing overhead costs were applied to the jobs. f. Job No. 100 and 200 were completed and the customers were billed at 150% of cost. g. Collect the amount due from Job No. 100. h. The company closed its overhead account as being not significant ate and of the month. Required: Record journal entries for the given transactions.arrow_forwardDillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur $4,252,500 in manufacturing overhead cost at an activity level of 567,000 machine-hours. The company spent the entire month of January working on a large order for 12,800 custom-made machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow: a. Raw materials purchased on account, $325,000. b. Raw materials used in production, $265,000 (80% direct materials and 20% indirect materials). c. Labor cost accrued in the factory, $156,000 (one-third direct labor and two-thirds indirect labor). d. Depreciation recorded on factory equipment, $63,500. e. Other manufacturing overhead costs incurred on account, $85,700. f. Manufacturing overhead cost was applied…arrow_forward
- Dillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur $4,354,800 in manufacturing overhead cost at an activity level of 573,000 machine-hours. The company spent the entire month of January working on a large order for 12,600 custom-made machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow: a. Raw materials purchased on account, $310,000. b. Raw materials used in production, $267,000 (80% direct materials and 20% indirect materials). c. Labor cost accrued in the factory, $177,000 (one-third direct labor and two-thirds indirect labor). d. Depreciation recorded on factory equipment, $63,600. e. Other manufacturing overhead costs incurred on account, $85,400. 1. Manufacturing overhead cost was applied…arrow_forward4. Prepare a schedule of Cost of Goods Manufactured and Cost of Goods Sold. 5. Compute the amount of overapplied or underapplied overhead that should be prorated to Work-in-Process, Finished Goods and Cost of Goods Sold. 6. Prepare the income statement for August.arrow_forwardMooresville Corporation manufactures reproductions of eighteenth-century, classical-style furniture. It uses a job costing system that applies factory overhead on the basis of direct labor hours. Budgeted factory overhead for the year was $1,359,000, and management budgeted 90,000 direct labor hours. Mooresville had no Materials, Work-in- Process, or Finished Goods Inventory at the beginning of August. These transactions were recorded during August: a. Purchased 5,600 square feet of oak on account at $26 per square foot. b. Purchased 110 gallons of glue on account at $36 per gallon (indirect material). c. Requisitioned 3,920 square feet of oak and 37 gallons of glue for production. d. Incurred and paid payroll costs of $200,500. Of this amount, $52,000 were indirect labor costs; direct labor personnel earned $22 per hour. e. Paid factory utility bill, $16,250 in cash. f. August's insurance cost for the manufacturing property and equipment was $3,800. The premium had been paid in March.…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY