FUND.ACCT.PRIN.
25th Edition
ISBN: 9781260247985
Author: Wild
Publisher: RENT MCG
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Chapter C, Problem 6E
Exercise C-6 Activity-based costing P2
Northwest Company produces two types of glass shelving, rounded edge and squared edge, on the same production line. For the current period, the company reports the following data.
Rounded edge squared edge
Total
Direct materials............................... $19,000 $43,200 $ 62,200
Direct labor................................... 12,200 23,800 36,000
Total cost.....................................
$67.800 $138,400 $206,200
Ouantity produced............................. 10,500 ft. 11,100 ft.
Average tost per ft (rounded).................... $ 6.46 $ 9.82
Northwest's controller wishes to apply activity-based costing (ABC) to allocate the $108,000 of overhead costs incurred by the two product lines to see whether cost per foot would change markedly from that reported above. She has collected the following information.
Overhead cost category (actually cost pool)costs
Supervision ................................................
$ 5,400
Depreciation of machinery.....................................
56,500
Assembly line preparation.....................................
46,000
Total overhead..............................................
$108,000
She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines.
Overhead cost category Driver Usege (actually cost pool) Rounded edge squared edge Total Supervision ........................ Direct labor cost ($$12,200 $23,800 36,000 Depreciation of machinery .....Machine hours 500 hours 1,500hours 2,000hours Assembly line preparation......Setups (number) 40 times 210 times 250 times
Required
1. Assign these three overhead cost pools to each of the two products using ABC.
2. Determine average cost per foot for each of the two products using ABC. Check (2: Rounded edge. 15.19: Squared edge. $10.76
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PROCESS COSTING I
Discussion Question
J&G Manufacturing makes a single product by way of three separate processes. Details of
production for the month ending June 30 were as follows:
Process
Process 1 Process 2 | Process 3
$390,000
Input material:
Material added
16,250 kg
$36,750
$92,200
$63,000
Direct Labour cost
$57.300
$61,000
$112,800
$97,080
Manufacturing Overhead
Normal losses
8%
6%
6%
Output
|Scrap value of losses
13,250 kg
12,000 kg
$16.00/kg| $32.00/kg
13,750 kg
The nature of the process requires equipment to be cleaned at the end of each month; hence
there is no opening or closing stock of product in process.
Required:
i) The process account for each process: and
ii)
The abnormal loss/gain account(s) showing J & G Manufacturing true loss/gain.
MC.18.50
MC.18.60
MC.18.70
MC.18.81
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Progress:3/5 items
Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments: Fabrication and Assembly. The factory overhead budget for the Fabrication Department is $550,000, using 500,000 direct labor hours. The factory overhead budget for the Assembly Department is $400,000, using 80,000 direct labor hours.
If a table lamp requires 2 hours of fabrication and 1 hour of assembly, the amount of factory overhead that Kaumajet Factory will allocate to each unit of table lamp using the multiple production department factory overhead rate method with an allocation base of direct labor hours is
QUESTION 17
ACCOUNT Work in Process-Forging Department
Date
Item
Nov. 1 Bal., 1,200 units, 60% completed
30 Direct materials, 8,300 units
30 Direct labor
30
Factory overhead
30 Goods transferred, 2 units
30 Bal., 900 units, 70% completed
Debit
124,500
18,950
20,196
Credit
?
ACCOUNT NO.
What is the Direct Materials Cost Per Equvalent Unit?
What is the Conversion cost per equivalent unit?
What is the cost of the beginning work in process completed during May?
What is the cost of the ending work in process?
What is the amount of the costs transfered to Finished Goods (or the next department)?
Balance
Debit
20,856
145,356
164,306
184,502
?
?
Credit
The above information concerns production in the Forging Department for November. All direct materials are placed in process at the beginning of production. Do not use $ or commas in your
answers.
Chapter C Solutions
FUND.ACCT.PRIN.
Ch. C - Prob. 1QSCh. C - Computing plantwide overhead rates P1 Chan Company...Ch. C - Computing overhead rates under ABC P2 Refer to the...Ch. C - Prob. 4QSCh. C - Prob. 5QSCh. C - Prob. 6QSCh. C - Prob. 7QSCh. C - Prob. 8QSCh. C - Prob. 9QSCh. C - Prob. 10QS
Ch. C - Prob. 11QSCh. C - Prob. 1ECh. C - Prob. 2ECh. C - Prob. 3ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Exercise C-6 Activity-based costing P2 Northwest...Ch. C - Prob. 8ECh. C - Prob. 9ECh. C - Prob. 10ECh. C - Prob. 11ECh. C - Prob. 12ECh. C - Problem C-1A Applying activity-based costing P1 P2...Ch. C - Prob. 2PSACh. C - Prob. 3PSACh. C - Prob. 4PSACh. C - Prob. CSPCh. C - Prob. 1DQCh. C - Complete the following for a traditional two-stage...Ch. C - What is the difference between operating...Ch. C - What is activity-based costing? What is its goal?Ch. C - What is a cost object?
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