Question 1. ABC Company uses budgeted overhead rates to apply overhead to individual jobs. It uses a system based on direct labor hours. Last year, the company made the following estimates for this year.
Direct labor costs $12,600,000
Factory overhead costs $3,060,000
Direct Labor Hours $600,000
Machine Hours $450,000
(a) What is the budgeted overhead rate for the company? (Show your work)
(b) If Job #34199 had the costs listed below, what would be the total cost of Job #34199? (Show your work)
Material costs were $100,000;
Direct labor costs were $140,000;
Direct labor hours were 12,000; and
Machine hours were 15,000. (Points : 30)
Question 2. James Company uses process costing to track its costs in two sequential production departments: Forming and Finishing. The following information is provided regarding the Forming Department:
Forming Department
Month Ended June 30
Unit information
Beginning work in process, June 1 --- 4,000
Started into production during June --- 22,000
Completed and transferred to Finished Department during June --- 20,000
Ending work in process, June 30 (20% complete as to direct materials and 50% complete as to conversion costs) --- 6,000
Cost information:
Beginning work in process as of June 1 consists of $1,000 of direct materials costs and $4,500 of conversion costs --- $5,500
Direct materials used in June --- $7,268
Conversion costs incurred in June --- $32,990
Required:
(a) Calculate the equivalent units for direct materials. (Show your work)
(b) Calculate the cost per equivalent unit for direct materials. (Show your work) (Points : 30)
Question 3: Classify each of the costs below within the ABC costing hierarchy as either unit-level, batch-level, product-level, or facility-level.
(a) Cost to inspect each product as it is finished
(b) Factory depreciation
(c) Machine setup
(d) Costs to hire human resource personnel
(e) Salary for a product-line manager
(f) Receiving raw materials from vendors (Points : 30)
Question 4: Drake Company incurred costs of $77,000 for direct materials (raw) purchased. Direct labor was $45,000 and factory overhead was $22,000 for March.
Inventories were as follows:
Raw materials beginning $10,000; raw materials ending $14,000
Work-in-process beginning $36,000; work-in-process ending $24,000
Finished goods beginning $5,000; finished goods ending $10,000
Required: Calculate the cost of goods manufactured for March for Drake Company. Show your work.