Accounting Homework

Part I.......Given the following information, prepare a cost of production report for Department B for July. [70 points]

Johnstone Chemicals manufactures its products in two departments [A and B]. Data for Department B is listed below:

Units transferred from Department A...................................40,000

Per unit cost.........................................................................$3.20

Units transferred to finished goods......................................26,000

Units still in process [1/3 complete].......................................6000

Costs added by Department B:

Labor...............................................................................$31,500

Factory overhead..............................................................$23,100

All lost units are considered to be normal.

Part II......Determine the factory overhead rates. Round money to the nearest cent and rates to the nearest percent. Label your answers. [30 points]

The XYZ Co. estimates its factory overhead for the year to be $58,000. They further estimate they will produce 38,000 units at a material cost of $48,000. Production will require 20,000 direct labor hours at an estimated cost of $100,000. Machines will work 1500 hours.

Find the following predetermined rates:

· material cost

· per unit cost

· machine hour cost

· direct labor cost

· direct labor hour cost

 Part III..............[25 points]

Answer the following questions.

1. What is the purpose of equivalent units? How do they differ from good units?

2. Explain the use of a quantity schedule. Who gives us the information regarding the percentage of units completed in a department?

3. How do applied factory overhead rates differ from applied factory overhead itself?