Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 3, Problem 3.16E
Compute equivalent units, unit costs, and costs assigned. (10 5), AP
Using the data in E3-15, assume Santana Mortgage Company uses the FIFO method. Also, assume chat the applications in process on September 1 were 100% complete as to materials (forms) and 40% complete as to conversion costs. Assume
Instructions
(a) Determine the equivalent units of service (production) for materials and conversion costs.
(b) Compute the unit costs and prepare a cost reconciliation schedule.
E3-15 Santana Mortgage Company uses a
Determine equivalent units, unit costs, and assignment of costs. (LO 3, 4), AP
Materials are the forms used in the application process, and these costs are incurred at the beginning of the process. Conversion costs are incurred uniformly during the process.
Instructions
(a) Determine the equivalent units of service (production) for materials and conversion costs.
(b) Compute the unit costs and prepare a cost reconciliation schedule.
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(1) calculate the overhead assigned rate (note their order from above):
Overhead Cost Items
Estimated Overhead
Cost Driver
Activity Levels
Activity Rate
Purchasing
$70,000
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Handling materials
$33,350
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Machine setups
$70,500
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Inspections
$25,500
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?
Utilities
$45,000
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(2) calculate the total order cost (again, note their order from above):
Activity Cost Drivers
Activity Levels
Activity Rate
Assigned Costs
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Total Order Cost
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In using FIFO method, Cruz Company produces a product that undergoes three processes and the completed items at end of process 3 are the items to be sold to customers. For December 2021, Cruz Company presented the following costs on three processes:
What is the amount of work in process at December 31, 2021?
P12,050.39
P 5,530.39
P 3,280.00
P 3,240.00
I. PROBLEM SOLVINGAnswer the following items on the space provided. Show your computations.At the beginning of 201A, ABC Company had the following standard costs for one (1) of its chemical products:Direct material (3 pounds at P3.20) P9.60Labor standard (0.9 hours at P9.00) 8.10Variable overhead (0.9 hours at P1.50) 1.35Fixed overhead (0.9 hours at P4.00) 3.60Total P22.65ABC computes its overhead rates using budgeted capacity, which is 144,000 units. Actual results for 201Aare:Units produced 140,000 unitsMaterials purchased 421,175 lbs. at P3.30Materials used 421,000 lbs.Direct labor 128,750 hrs at P8.90Fixed overhead P517,525Variable overhead 218,000Required: Indicate whether conditions are favorable or unfavorable. 1. Material purchase price variance (MPPV)2. Material price usage variance (MPUV)3. Material quantity variance (MQV)4. Labor rate variance (LRV)5. Labor efficiency variance (LEV)6. Variable overhead (VOH) rate variance7. VOH efficiency variance8. Fixed overhead (FOH)…
Chapter 3 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 3 - Identify which costing systemjob order or process...Ch. 3 - Contrast the primary focus of job order cost...Ch. 3 - What are the similarities between a job order and...Ch. 3 - Your roommate is confused about the features of...Ch. 3 - Sam Bowyer believes there are no significant...Ch. 3 - (a) What source documents are used in assigning...Ch. 3 - At Ely Company, overhead is assigned to production...Ch. 3 - Prob. 8QCh. 3 - Prob. 9QCh. 3 - Prob. 10Q
Ch. 3 - Sanchez Co. has zero units of beginning work in...Ch. 3 - Coats Company had zero units of beginning work in...Ch. 3 - Sanchez Co. has zero units of beginning work in...Ch. 3 - Hindi Co. started 3,000 units during the period....Ch. 3 - Clauss Company transfers out 14,000 units and has...Ch. 3 - Prob. 16QCh. 3 - What purposes are served by a production cost...Ch. 3 - As Trent Company, there are 500 units of ending...Ch. 3 - What is the difference between operations costing...Ch. 3 - How does a company decide whether to use a job...Ch. 3 - Soria Co. started and completed 2,000 units for...Ch. 3 - Reyes Company transfers out 12,000 units and has...Ch. 3 - Journalize entries for accumulating costs. (LO 2)....Ch. 3 - Data for Warner Company are given in BE3-1....Ch. 3 - Compute equivalent units of production. (LO 3), AP...Ch. 3 - Compute equivalent units of production. (LO 3), AP...Ch. 3 - Compute unit costs of production.. (LO 4), AP In...Ch. 3 - Assign costs to units transferred out and in...Ch. 3 - Compute unit costs. (LO 4), AP Production costs...Ch. 3 - Prepare cost reconciliation schedule. (LO 4), AP...Ch. 3 - Assign costs to units transferred out and in...Ch. 3 - Assign costs to units transferred out and in...Ch. 3 - Compute unit costs. (LO 5), AP Production costs...Ch. 3 - Indicate whether each of the following statements...Ch. 3 - Kopa Company manufactures CH-21 through two...Ch. 3 - The Assembly Department for Right pens has the...Ch. 3 - In March, Kelly Company had the following unit...Ch. 3 - Robert Wilkins has prepared the following list of...Ch. 3 - Journalize transactions. (LO 2), AP Harrelson...Ch. 3 - The ledger of American Company has the following...Ch. 3 - Journalize transaction for two processes. (LO 2),...Ch. 3 - In Shady Company, materials are entered at the...Ch. 3 - The Cutting Department of Cassel Company has the...Ch. 3 - The Sanding Department of Quik Furniture Company...Ch. 3 - The Blending Department of Luongo Company has the...Ch. 3 - Determine equivalent units, unit costs, and...Ch. 3 - Determine equivalent units, unit costs, and...Ch. 3 - The Polishing Department of Major Company has the...Ch. 3 - Prob. 3.12ECh. 3 - The Welding Department of Healthy Company has the...Ch. 3 - Remington Inc. is contemplating the use of process...Ch. 3 - Santana Mortgage Company uses a process cost...Ch. 3 - Compute equivalent units, unit costs, and costs...Ch. 3 - Determine equivalent units, unit costs, and...Ch. 3 - Compute equivalent units, unit costs, and costs...Ch. 3 - Answer questions on costs and production. (LO 5),...Ch. 3 - The Welding Department of Majestic Company has the...Ch. 3 - Fire Out Company manufactures its product,...Ch. 3 - Complete four steps necessary to prepare a...Ch. 3 - Thakin Industries Inc. manufactures dorm furniture...Ch. 3 - Rivera Company has several processing departments....Ch. 3 - Polk Company manufactures basketballs. Materials...Ch. 3 - Hamilton Processing Company uses a weighted...Ch. 3 - Determine equivalent units and unit costs and...Ch. 3 - CURRENT DESIGNS CDJ Building a kayak using the...Ch. 3 - Decision-Making Across the Organization Florida...Ch. 3 - Harris Furniture Company manufactures living room...Ch. 3 - CRITICAL THINKING Communication Activity Diane...Ch. 3 - Ethics Case R. B. Dillman Company manufactures a...Ch. 3 - In a recent year, an oil refinery Texas City,...
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- I. PROBLEM SOLVINGAnswer the following items on the space provided. Show your computations.At the beginning of 201A, ABC Company had the following standard costs for one (1) of its chemical products:Direct material (3 pounds at P3.20) P9.60Labor standard (0.9 hours at P9.00) 8.10Variable overhead (0.9 hours at P1.50) 1.35Fixed overhead (0.9 hours at P4.00) 3.60Total P22.65ABC computes its overhead rates using budgeted capacity, which is 144,000 units. Actual results for 201Aare:Units produced 140,000 unitsMaterials purchased 421,175 lbs. at P3.30Materials used 421,000 lbs.Direct labor 128,750 hrs at P8.90Fixed overhead P517,525Variable overhead 218,000Required: Indicate whether conditions are favorable or unfavorable. 4. Labor rate variance (LRV)5. Labor efficiency variance (LEV)6. Variable overhead (VOH) rate variance7. VOH efficiency variance8. Fixed overhead (FOH) spending variance9. FOH volume variancearrow_forwardIn using FIFO method, Richer Company produces a product that undergoes three processes and the completed items at end of process 3 are the items to be sold to customers. For December 2021, Richer Company presented the following costs on three processes: *see image attached*  1. What is the amount of cost of goods manufactured? a. P226,926.61 b. P234,541.61 c. P240,072.00 d. None of the above  2. What is the total units to account for (TUTAF) in Department 1? a. 16,000 b. 15,100 c. 15,000 d. 15,700arrow_forwardUse the following data from a company using a process costing system to answer the question below. Conversion cost per equivalent unit for materials $2.50 Cost per equivalent unit for conversion $3.75 Beginning inventory costs $1, 200 Equivalent units for beginning inventory conversion 2, 400 Equivalent Units started and completed for both materials and conversion 10,000 Compute cost of good manufactured A. $10, 200 B. $72, 700 C. $71,500 D. $62, 500arrow_forward
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