1. Whether a company uses process costing or job-order costing depends on its industry. A number of companies in different industries are listed below.
i. Brick manufacturer
ii. Contract printer that produces posters, books, and pamphlets to order
iii. Natural gas production company
iv. Dairy farm
v. Coal mining company
vi. Specialty coffee roaster (roasts small batches of specialty coffee beans)
For each company, indicate whether the company is most likely to use job-order costing or process costing.
Question 2. Job 728 was recently completed. The following data have been recorded on its job cost sheet.
|
Direct materials
|
$81,000
|
|
Direct labor hours
|
1,220 labor hours
|
|
Direct labor wage rate
|
$15 per labor-hour
|
|
Machine Hours
|
1,520 machine hours
|
|
Number of units completed
|
4,400 units
|
|
The company applies manufacturing overhead on the basis of machine hours. The predetermined overhead rate is $16 per machine hour.
Compute the unit product cost that would appear on the job cost sheet for this job.
Question 3. Miller Company manufactures a product for which materials are added at the beginning of the manufacturing process. A review of the company's inventory and cost records for the most recently completed year revealed the following information.
| |
Units |
Materials |
Conversion |
| Work in process. Jan. 1 (80% complete with respect to conversion costs) |
100,000 |
$100,000 |
$157,500 |
| Units started into production |
500,000 |
|
|
| Costs added during the year |
|
|
|
| Materials |
|
$650,000 |
|
| Conversion |
|
|
$997,500 |
| Units completed during the year |
450,000 |
|
|
he company uses the weighted-average cost method in its process costing system. The ending inventory is 50% complete with respect to conversion costs.
Required:
i. Compute the equivalent units of production and the cost per equivalent units for materials and for conversion costs.
ii. Determine the cost transferred to finished goods.
iii. Determine the amount of cost that should be assigned to the ending work in process inventory.
Question 4. Weisinger Corporation has provided the following data for the month of January.
| Inventories |
Beginning |
Ending |
Raw materials
|
$28,000 |
$29,000 |
Work in process
|
$16,000 |
$14,000 |
Finished goods
|
$42,000 |
$54,000 |
| Additional Information |
|
Raw material purchases
|
$56,000 |
Direct labor costs
|
$87,000 |
Manufacturing overhead cost incurred
|
$51,000 |
Indirect materials included in manufacturing overhead costs incurred
|
$3,000 |
Manufacturing overhead cost applied to work in process
|
$55,000 |
Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.