Question 1.1. (TCO 2) Process costing would be most applicable (Points : 5) Question 2.2. (TCO 2) For a manufacturer, the three inventory accounts on the balance sheet are (Points : 5) Question 3.3. (TCO 2) An example of a period cost is, (Points : 5)

Question 1.1. (TCO 2) Process costing would be most applicable (Points : 5)

Question 2.2. (TCO 2) For a manufacturer, the three inventory accounts on the balance sheet are (Points : 5)

Question 3.3. (TCO 2) An example of a period cost is, (Points : 5)

Question 4.4. (TCO 3) Unit cost of materials for a department using the FIFO method of process costing is found by taking the total cost of materials issued to the department during the year divided by (Points : 5)

Question 5.5. (TCO 3) The following information was provided by Joe's Distribution Company:

How many equivalent units for materials would there be using the weighted average method? (Points : 5)

Question 6.6. (TCO 8) A predetermined overhead rate is calculated using which of the following formulas? (Points : 5)

Question 7.7. (TCO 8) A company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $4,000 per day. A competitor keeps 10 days of inventory on hand, and the competitor's carrying costs average $2,000 per day. The value-added costs are (Points : 5)

Question 8.8. (TCO 8) Which of the following is a financial measure of activity efficiency? (Points : 5)

Question 9.9. (TCO 3) The costs included in the cost per equivalent unit using the weighted average method are (Points : 5)

Question 10.10. (TCO 2) Period costs do NOT include (Points : 5)

Juicy Manufacturing Corporation incurred the following costs.

Beginning direct materials inventory

 $19,200 

Beginning work-in-process inventory

 $8,400 

Beginning finished goods inventory 

 $22,800 

Ending direct materials inventory 

 $19,200 

Ending work in process 

 $16,800 

Ending finished goods 

 $31,200 

Factory supervisor's salary 

 $33,600 

Depreciation on plant 

 $14,400 

Sales 

 $960,000 

Selling and administrative expenses 

 $150,000 

Plant maintenance 

 $7,200 

Plant utilities 

 $13,200 

Direct material purchases 

 $258,000 

Direct labor 

 $288,000 

Required: Calculate the following.

a. Direct materials used

b. Cost of goods manufactured

c. Cost of goods sold

d. Operating income

Jack and Jill Manufacturing Inc. began the year with the following.

Units

Beginning work-in-process

 20,000 

30% complete

Transferred to finished goods

 70,000 

Ending inventory

 15,000 

60% complete

Materials added at the beginning of the process.

Required: Calculate the equivalent units for the following.

a. Materials costs under the weighted average process cost method

b. Conversion costs under the weighted average process cost method

c. Materials costs under the FIFO process cost method

d. Conversion costs under the FIFO process cost method

Overhead costs have been divided into three cost pools that use the following activity drivers.

Product

# of Setups

Machine Hours

Packing Orders

X

24

1,300

75

Z

24

3,900

225

Cost per Pool

 $60,000 

 $150,000 

 $30,000 

a. What is the allocation rate for Product Z per setup using activity-based costing?

b. What is the allocation rate for Product Z per machine hours using activity-based costing?

c. What is the allocation rate for Product Z per packing order using activity-based costing?

Sales volume averages 4,000 units per year.

Recently, its main competitor reduced the price of its product to $38.

Maximum expects sales to drop dramatically unless it matches the competitor's price.

In addition, the current profit per unit must be maintained.

Information about the product (for production of 4,000) is as follows.

Standard Quantity

Actual Quantity

Actual Cost

Materials (pounds)

 4,800 

5,000 

 $50,000 

Labor (hours)

 800 

1,000 

 $18,000 

Setups (hours)

0

200

 $7,000 

Material handling (moves)

0

450

 $3,500 

Warranties (number repaired)

0

325

 $18,000 

Required

a. Calculate the target cost for maintaining current market share and profitability.

b. Calculate the non-value-added cost per unit.

c. If non-value-added costs can be reduced to zero, can the target cost be achieved?