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 4, Problem 38P
Orbital Industries of Canada, Inc. manufactures a variety of materials and equipment for the aerospace industry. A team of R & D engineers in the firm’s Winnipeg plant has developed a new material that will be useful for a variety of purposes in orbiting satellites and spacecraft. Tradenamed Ceralam, the material combines some of the best properties of both ceramics and laminated plastics. Ceralam is already being used for a variety of housings in satellites produced in three different countries. Ceralam sheets are produced in an operation called rolling, in which the various materials are rolled together to form a multilayer laminate. Orbital Industries sells many of these Ceralam sheets just after the rolling operation to aerospace firms worldwide. However, Orbital also processes many of the Ceralam sheets further in the Winnipeg plant. After rolling, the sheets are sent to the molding operation, where they are formed into various shapes used to house a variety of instruments. After molding, the sheets are sent to the punching operation, where holes are punched in the molded sheets to accommodate protruding instruments, electrical conduits, and so forth. Some of the molded and punched sheets are then sold. The remaining units are sent to the dipping operation, in which the molded sheets are dipped in a special chemical mixture to give them a reflective surface.
During the month of March, the following products were manufactured at the Winnipeg plant. The direct-material costs also are shown.
The costs incurred in producing the various Ceralam products in the Winnipeg plant during March are shown in the following table. Manufacturing
Orbital Industries of Canada uses operation costing for its Ceralam operations in the Winnipeg plant.
Required:
- 1. Prepare a table that includes the following information for each of the four operations.
- Total conversion costs.
- Units manufactured.
- Conversion cost per unit.
- 2. Prepare a second table that includes the following information for each product (i.e., rolled Ceralam sheets, nonreflective Ceralam housings, and reflective Ceralam housings).
- Total
manufacturing costs . - Units manufactured.
- Total cost per unit.
- Total
- 3. Prepare
journal entries to record the flow of all manufacturing costs through the Winnipeg plant’s Ceralam operations during March. (Ignore the journal entries to record sales revenue.) - 4. Build a spreadsheet: Construct an Excel spreadsheet to solve requirements 1 and 2 above. Show how the solution will change if the following data change: the cost of direct material used in dipping was $45,000 and the overhead application rate is 200% of direct-labor cost.
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Chapter 4 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 4 - Explain the primary differences between job-order...Ch. 4 - List five types of manufacturing in which process...Ch. 4 - Prob. 3RQCh. 4 - What are the purposes of a product-costing system?Ch. 4 - Define the term equivalent unit and explain how...Ch. 4 - List and briefly describe the purpose of each of...Ch. 4 - Show how to prepare a journal entry to enter...Ch. 4 - Prob. 8RQCh. 4 - Prob. 9RQCh. 4 - Prob. 10RQ
Ch. 4 - How would the process-costing computations differ...Ch. 4 - Explain the concept of operation costing. How does...Ch. 4 - Prob. 13RQCh. 4 - In each case below, fill in the missing amount.Ch. 4 - Rainbow Glass Company manufactures decorative...Ch. 4 - Terra Energy Company refines a variety of...Ch. 4 - The Evanston plant of Fit-for-Life Foods...Ch. 4 - Idaho Lumber Company grows, harvests, and...Ch. 4 - Otsego Glass Company manufactures window glass for...Ch. 4 - Savannah Textiles Company manufactures a variety...Ch. 4 - The following data pertain to Tulsa Paperboard...Ch. 4 - The November production of MVPs Minnesota Division...Ch. 4 - Timing Technology, Inc. manufactures timing...Ch. 4 - Piscataway Plastics Company manufactures a highly...Ch. 4 - The following data pertain to the Vesuvius Tile...Ch. 4 - Triangle Fastener Corporation accumulates costs...Ch. 4 - Moravia Company processes and packages cream...Ch. 4 - Albany Company accumulates costs for its product...Ch. 4 - Goodson Corporation assembles various components...Ch. 4 - A-1 Products manufactures wooden furniture using...Ch. 4 - The following data pertain to the Hercules Tire...Ch. 4 - Scrooge and Zilch, a public accounting firm in...Ch. 4 - GroFast Company manufactures a high-quality...Ch. 4 - Plasto Corporation manufactures a variety of...Ch. 4 - (Contributed by Roland Minch.) Glass Glow Company...Ch. 4 - Orbital Industries of Canada, Inc. manufactures a...Ch. 4 - Laredo Leather Company manufactures high-quality...
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