Problem 1 - XYZ Company, which began operations on January 1 of the current year, produces office chairs that sells for $350 per unit. Information related to the current year's activities follows.
|
Number of units Produced
|
30,000
|
|
Number of units sold
|
28,000
|
|
Variable cost per unit:
|
|
|
Direct materials
|
$200
|
|
Direct Labor
|
60
|
|
Variable Manufacturing overhead
|
40
|
|
Annual Fixed costs:
|
|
|
Fixed Manufacturing overhead
|
$150,000
|
|
Fixed Selling and Administrative costs
|
$200,000
|
XYZ Company carries its finished-goods inventory at the average unit cost of production. There was no work in process at year-end.
Required: Calculate the following (Make sure you show you work)
A. Compute the company's average unit cost of production.
B. Determine the cost of the December 31 finished-goods inventory.
C. Compute the company's cost of goods sold.
D. Compute the operating income.
Problem 2 - Eastside Manufacturing produces small electric engines. Identify the following costs as direct materials (DM), direct labor (DL), manufacturing overhead (MOH), or a period cost (P). Also indicate whether the cost is variable (V) or fixed (F) with respect to behavior to the volume produced and sold of small electric engines.
| |
Is the cost DM, DL, MOH, or P?
|
Is the cost behavior V or F?
|
|
A. Property taxes paid on the factory facilities
|
|
|
|
B. Delivery costs on customer orders
|
|
|
|
C. Salary of the plant supervisor
|
|
|
|
D. Wages of the assembly-line workers
|
|
|
|
E. Engine casings put into the assembling of each small engine
|
|
|
|
F. Raw materials purchased and used in production during the period.
|
|
|
|
G. Lease payments for the president's automobile
|
|
|
|
H. Straight-line depreciation on the factory building
|
|
|
|
I. Marketing costs
|
|
|
Problem 3 - The Fisher Products Company uses a job costing system. The company estimated its annual manufacturing overhead to be $225,000, and the estimated number of machine hours for the year to be 25,000 hours. This company uses machine hours to apply overhead. In the first month, the following jobs were worked on:
|
|
Job #105
|
Job #205
|
Job#305
|
|
Direct materials used
|
$11,000
|
$14,000
|
$12,000
|
|
Direct labor cost
|
$15,000
|
$12,000
|
$13,000
|
|
Machine hours
|
1,000 hours
|
1,200 hours
|
1,300 hours
|
At the end of the first month the jobs were in the following stages. Job#205 was completed and sold, Job #105 is still being worked on, and Job#305 is completed and still on hand.
Required:
a. What is the predetermined overhead rate, if the company is using machine hours as the cost driver?
b. Complete the schedule below to determine the total cost assigned to the three jobs during the month.
| |
Job #105
|
Job #205
|
Job#305
|
|
Direct materials used
|
$11,000
|
$14,000
|
$12,000
|
|
Direct labor cost
|
15,000
|
12,000
|
13,000
|
c. What is the ending work in process inventory for the first month? Please give cost of job and the job number.
d. What is the ending finished goods inventory for the first month? Please give cost of job and the job number.
e. What is the cost of goods sold for the first month? Please give cost of job and the job number.
f. If actual overhead for the month is $32,000, what is the dollar amount overhead variance(difference) ? Is the overhead over or under applied?
Problem 4 - The controller for Wolfe Machining has established the following overhead cost pools and cost drivers:
|
Overhead cost pools
|
Budgeted overhead costs
|
Cost driver
|
Pool rates
|
|
Machine setups
|
$ 200,000
|
Number of setups
|
2,000
|
|
|
Material handling
|
90,000
|
Units of raw material
|
60,000
|
|
|
Quality control inspection
|
50,000
|
Number of inspections
|
1,000
|
|
|
Other overhead costs
|
160,000
|
Machine hours
|
20,000
|
|
|
Total overhead
|
$ 500,000
|
|
|
|
Order no. 715 has the following production requirements:
Machine setups: 15
Units of Raw material: 10,000 units
Inspections: 2
Machine hours: 800
Assume also that direct material for order no 715 is $40,000 and direct labor is $15,000.
Required:
A. Complete the schedule above to calculate the pool rates
B. Compute the total overhead that should be assigned to order no. 715 by using activity-based costing
C. Compute the total cost assigned to the order.
D. Which of the two methods (traditional or ABC) is more accurate? Why?
Problem 5 - Use the simple regression output table to answer questions 1 and 2 below and use the multiple regression table to answer questions 3 and 4. Remember to show your work!
SUMMARY OUTPUT
|
Regression Statistics
|
|
Multiple R
|
0.982105872
|
|
R Square
|
0.964531944
|
|
Adjusted R Square
|
0.960098437
|
|
Standard Error
|
26209.09184
|
|
Observations
|
10
|
| |
|
|
ANOVA
|
|
| |
df
|
|
Regression
|
1
|
|
Residual
|
8
|
|
Total
|
9
|
| |
|
| |
Coefficients
|
|
Intercept
|
96567.9867
|
|
X Variable 1
|
1592.351284
|
1. What is the cost equation based on the output table above?
2. What would be the estimated cost if the independent variable was 15? (Round to the nearest cent)
SUMMARY OUTPUT
|
Regression Statistics
|
|
Multiple R
|
0.998663312
|
|
R Square
|
0.997328411
|
|
Adjusted R Square
|
0.995992616
|
|
Standard Error
|
8305.915289
|
|
Observations
|
10
|
| |
|
|
ANOVA
|
|
| |
df
|
|
Regression
|
3
|
|
Residual
|
6
|
|
Total
|
9
|
| |
|
| |
Coefficients
|
|
Intercept
|
86712.55047
|
|
X Variable 1
|
555.58632
|
|
X Variable 2
|
202.2189525
|
|
X Variable 3
|
15174.53728
|
3. What is the cost equation based on the output table above?
4. What would be the estimated cost if the independent variable 1 is 5 and independent variable 2 is 7 and independent variable 3 is 2? (Round to the nearest cent)
Problem 6 - Austin Muffler, Inc., operates an automobile service facility. The table below shows information on the cost behavior.
| |
20,000 units
|
10,000 units
|
80,000 units
|
|
Total costs:
|
|
|
|
|
Fixed costs
|
$40,000
|
A
|
B
|
|
Variable costs
|
6,000
|
C
|
D
|
|
Cost per unit:
|
|
|
|
|
Fixed cost
|
E
|
F
|
G
|
|
Variable cost
|
H
|
I
|
J
|
| |
|
|
|
Required: Fill in the missing amounts, labeled A through J, in the table below by the appropriate alpha character.