Question 1:
Hsung Manufacturing Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department E, direct labor hours in Department G, and machine hours in Department I.
In establishing the predetermined overhead rates for 2012, the following estimates were made for the year.
|
|
Department
|
|
|
E
|
G
|
I
|
|
Manufacturing overhead
|
$1,050,000
|
$1,500,000
|
$840,000
|
|
Direct labor costs
|
$1,500,000
|
$1,250,000
|
$450,000
|
|
Direct labor hours
|
100,000
|
125,000
|
40,000
|
|
Machine hours
|
400,000
|
500,000
|
120,000
|
During January, the job cost sheets showed the following costs and production data.
|
|
Department
|
|
|
E
|
G
|
I
|
|
Direct materials used
|
$140,000
|
$126,000
|
$78,000
|
|
Direct labor costs
|
$120,000
|
$110,000
|
$37,500
|
|
Manufacturing overhead incurred
|
$89,000
|
$124,000
|
$74,000
|
|
Direct labor hours
|
8,000
|
11,000
|
3,500
|
|
Machine hours
|
34,000
|
45,000
|
10,400
|
Instructions
(a) Compute the predetermined overhead rate for each department.
(b) Compute the total manufacturing costs assigned to jobs in January in each department.
(c) Compute the under-or overapplied overhead for each department at January 31.
Question 2:
Chakos Industries Inc. manufactures in separate processes furniture for homes. IN each process, materials are entered at the beginning, and conversion costs are incurred uniformly. Production and cost data for the first process in making two products in two different manufacturing plants are as follows.
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Cutting Department
|
|
|
Plant 1
|
Plant 2
|
|
Production Data-July
|
T12-Tables
|
C10-Chairs
|
|
Work in process units, July 1
|
-0-
|
-0-
|
|
Units started into production
|
20,000
|
16,000
|
|
Work in process units, July 31
|
3,000
|
500
|
|
Work in process percent complete
|
60
|
80
|
|
|
|
|
|
Cost Data-July
|
|
|
|
Work in process, July 1
|
$ -0-
|
$ -0-
|
|
Materials
|
380,000
|
288,000
|
|
Labor
|
234,400
|
125,900
|
|
Overhead
|
104,000
|
96,700
|
|
Total
|
$718,400
|
$510,600
|
|
|
|
|
Instructions
(a) For each plant:
(1) Compare the physical units of production.
(2) Compute equivalent units of production for materials and for conversion costs.
(3) Determine the unit costs of production.
(4) Show the assignment of costs to units transferred out and in process.
(b) Prepare the production cost report for Plant 1 for July 2012.