ACCT321 - COST ACCOUNTING - UNIVERSITY OF MARYLAND UNIVERSITY COLLEGE

UNIVERSITY OF MARYLAND UNIVERSITY COLLEGE

COST ACCOUNTING

ACCT321

WEEK THREE HOMEWORK ASSIGNMENT

Exercises

1. Diamonite Manufacturing uses a job order cost system. Overhead is allocated at a rate of $60 per direct labor hour. For the year 2015 direct labor cost incurred was 500 hours for total cost of $10,000. Raw materials used in production cost $20,000.

Required:

What was the total production cost for 2015?

2. Stevenson Manufacturing allocates manufacturing overhead costs using a budgeted rate per machine-hour. The following date is for the year 2015:

Budgeted manufacturing overhead costs  $687,500

Budgeted machine-hours                   28,645

Actual manufacturing overhead costs    $663,000

Actual machine hours                     27,825

Required:

1.  Calculate the budgeted manufacturing overhead rate.

2.  Calculate the manufacturing overhead allocated during 2015.

3.  Calculate the amount of under-or-under allocated manufacturing overhead.

3. Youth Global manufactures video equipment for games. For the month of March 2015 there was $5,000 of direct material used and $3,325 of direct manufacturing labor at $35 per hour for each unit. Manufacturing overhead is applied at $40 per direct manufacturing labor hour.

Assume that there wasn’t any beginning or ending work-in-process or beginning finished goods. In other words, all the units produced during March 2015 were sold in which there wouldn’t be any ending finished goods.

Required:

Calculate the gross profit earned on 50 units if each unit sells for $400.

4. Benson Manufacturing uses a job order cost system. Overhead is applied at the rate of $25 per direct labor hour. Job #257 includes $3,000 of direct labor cost and 450 direct labor hours. Indirect labor cost of $2,000 was actually incurred.

Required:

Prepare the journal entry to record the total wage (labor) cost.

ACCT321 Week Three Homework Concluded: Page 2 of 2

5. Canton Corp. is a manufacturer of cameras. It has two departments: assembly and finishing. During April of 2015, the company incurred $650,000 on direct materials and $654,000 on conversion costs, for a total manufacturing cost of $1,304,000.

Required:

1)  Assume there was no beginning inventory of any kind on April 1, 2015. During April, 4,000 cameras were placed into production and all 4,000 were full completed at the end of the month. What is the unit cost of an assembled camera in April?

2)  Assume that during May 4,000 cameras are placed into production. Further assume the same total assembly costs for April are also incurred in May, but only 3,000 cameras are fully completed at the end of the month. All direct materials have been added to the remaining 1,000 cameras. However, on average, these remaining 1,000 cameras are only 70% complete as to conversion costs. What are the equivalent units for direct materials and conversion costs and their respective costs per equivalent unit for May?

6.  International Tech Corporation produces laptops. The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process. October of 2015 was International's first month of operations, and therefore, there was no beginning work-in-process inventory. Direct materials cost for the month totaled $900,000, while conversion costs equaled $1,100,000. Accounting records indicate that 500,000 laptops were started in October and 437,500 laptops were completed.

Ending inventory was 25% complete as to conversion costs.

Required:

a. Compute the equivalent units for direct materials and conversion costs.

b. What are the total manufacturing cost per laptop (unit) for materials, conversion costs and the total cost for October?

END OF ACCT321 WEEK THREE HOMEWORK