Questions -
Q1. Two grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is 180 roubles per kilogram. (Siberia is located in Russia, whose currency is the rouble.) Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3:
|
Year 2
|
Year 3
|
|
First
|
Second
|
Third
|
Fourth
|
First
|
|
Budgeted production, in bottles
|
58,000
|
87,000
|
153,000
|
107,000
|
77,000
|
Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 25% of the following quarter's production needs. Some 29,000 grams of musk oil will be on hand to start the first quarter of Year 2.
Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the bottom of your budget, show the amount of purchases in roubles for each quarter and for the year in total.
Q2. Acme, which uses the high-low method, had total costs of $298,480 at its lowest level of activity when 10,900 units were sold. When, at its highest level of activity, sales equaled 16,600 units, total costs were $398,800. Acme would estimate fixed costs as
Q3. Acme uses the high-low method of estimating costs. Acme had total costs of $29,245 at its lowest level of activity, when 15,000 units were sold. When, at its highest level of activity, sales equaled 20,300 units, total costs were $39,050. Acme would estimate variable cost per unit as
Q4. Bervine, Inc. produces two different products (bompers and woobles) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The cost of Machining is $782,000, while the cost of Inspection is $40,320. Usage of the activity drivers are as follows:
|
Bompers
|
Woobles
|
Total
|
|
Machine hours
|
1,400
|
3,200
|
4,600
|
|
Number of batches
|
54
|
18
|
72
|
What is the activity rate for Inspection?
Q5. Bervine, Inc. produces two different products (bompers and woobles) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $180 per machine hour, and the activity rate for Inspection is $520 per batch. Usage of the activity drivers are as follows:
|
Bompers
|
Woobles
|
Total
|
|
Machine hours
|
1,300
|
3,900
|
5,200
|
|
Number of batches
|
55
|
24
|
79
|
What is the amount of Machining cost assigned to woobles?
Q6. Carmella Inc had the following information for the preceding year:
|
Beginning
Inventory
(1/1)
|
Ending
Inventory
(12/31)
|
|
Raw Materials Inventory
|
$44,400
|
$37,000
|
|
Work in Process Inventory
|
$44,300
|
$??
|
|
Finished Goods Inventory
|
$31,400
|
$??
|
Additional information for the year is as follows:
|
Direct materials used
|
$209,300
|
|
Direct labor
|
$153,700
|
|
Manufacturing overhead applied
|
$164,000
|
|
Cost of goods manufactured
|
$529,100
|
|
Cost of goods sold
|
$548,300
|
What was the ending Work in Process Inventory balance on 12 / 31?
Q7. Alcatraz Corp has the following information:
|
Beginning
Inventory
(1/1)
|
Ending
Inventory
(12/31)
|
|
Raw Materials Inventory
|
$27,000
|
$36,600
|
|
Work in Process Inventory
|
$23,800
|
$20,000
|
|
Finished Goods Inventory
|
$34,300
|
$28,300
|
Additional information for the year is as follows:
|
Raw Materials purchases
|
$104,700
|
|
Direct labor
|
$84,100
|
|
Manufacturing overhead applied
|
$87,300
|
|
Indirect materials
|
$0
|
Compute the cost of goods manufactured.