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extra_credit_job_abc_process-2.docx
1. Lanking Company applies manufacturing overhead based on direct labor cost. Information concerning manufacturing overhead and labor for August follows:
Estimated Actual
Overhead cost $160,000 $161,000
Direct labor hours 8,000 8,200
Direct labor cost $120,000 $115,800
How much is the predetermined overhead rate? (2 points)
A. $1.33
B. $20.00
C. $1.03
D. $19.63
2. The overhead allocation rate is calculated by dividing:
A. actual overhead costs by the actual quantity of the allocation base
B. the actual overhead costs by the estimated quantity of the allocation base
C. the estimated overhead costs by the actual quantity of the allocation base
D. the estimated overhead costs by the estimated quantity of the allocation base
APPLYING OVERHEAD
Estimated overhead $ 1,000,000
Estimated machine hours 500,000
Actual overhead 980,000
Actual machine hours 495,000
3. Calculate the predetermined overhead rate
4. Calculate the overhead applied (or assigned)
5. Was the overhead over or under-assigned?
6. The work in process inventory decreased from 1,832 units to 1,275 units during the month. If 8,653 units were started during the month, how many units were transferred out of the department?
Answer:________________________________
7. Round Core Company uses process costing. Data for the processing department for June is as follows:
Units Cost of Materials
Beginning work in process inventory 20,000 $21,000
Started in June 77,000 $42,000
Units Completed 75,000
Ending work in process inventory 22,000
All materials are added at the beginning of the manufacturing process. To which amount is the cost per equivalent unit for materials closest?
A. $0.65
B. $0.84
C. $0.55
D. $0.82
8. Using the information above, what is the total cost assigned to the units completed transferred out?
9. Using the information above, what is the total cost assigned to the units in ending inventory (EWIP)?
Using the information above…
Please assume that Expected Activity = Actual Activity
10. Please compute the pre-determined overhead rate for each activity pool using ABC Costing.
11. Using the pre-determined overhead rates, how much overhead is allocated to Prod C?
12. Using the pre-determined overhead rates, how much overhead is allocated to Prod D?
13. The two categories of cost comprising conversion costs are:
|
a. |
direct labor and indirect labor |
|
b. |
direct labor and factory overhead |
|
c. |
factory overhead and direct materials |
|
d. |
direct labor and direct materials
For |
ABC Manufacturing, Inc. produces three gadgets (Ace, Best, and Champ). The estimated overhead for all three products is $1,350,000. The following table provides production and cost data for the year. Please assume actual activity = estimated activity.
|
|
Ace |
Best |
Champ |
Total |
|
Number of units |
25,000 |
15,000 |
5,000 |
45,000 |
|
Machine hours |
2,500 |
1,500 |
2,000 |
6,000 |
|
|
|
|
|
|
|
Direct materials |
$1,000,000 |
$450,000 |
$275,000 |
$1,725,000 |
|
Direct labor |
375,000 |
225,000 |
75,000 |
675,000 |
|
Overhead |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total overhead |
|
|
|
1,350,000 |
|
Total costs |
|
|
|
$3,750,000 |
14. Use the plant-wide allocation method to determine the unit cost for each product. The allocation bases to allocate overhead are machine hours.
ACE Unit Product Cost:
Best Unit Product Cost:
Champ Unit Product Cost:
15. Assume the price is as follows for the products. What is the mark-up percentage of each product?
Ace Price: $101; Best Price: $104; Champ Price: $145
16. During the month of August, Grubb Gears applied overhead to jobs using an overhead rate of $0.75 per dollar of direct labor. Direct labor in August was $156,000. Estimated overhead in August was $115,600. Actual overhead was composed of the following items:
Indirect materials $ 16,400
Indirect labor 22,000
Utilities 24,500
Depreciation 38,700
Repair expense 13,500
Total $115,100
How much overhead was applied during the year for Grub Gears?
A. $86,700
B. $115,600
C. $117,000
D. More information is needed to answer.
Department S had no work in process at the beginning of the period. 12,000 units of direct materials were added during the period at a cost of $84,000, 9,000 units were completed during the period, and 3,000 units were 30% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $49,500 and factory overhead was $9,900.
17. The total cost (DM + DL + MOH) of units completed & transferred out during the period was:
|
a. |
$117,000 |
|
b. |
$143,400 |
|
c. |
$121,000 |
|
d. |
$127,450
|
18. The DM Cost Per Equivalent Unit:
The DL Cost Per Equivalent Unit:
The MOH Cost Per Equivalent Unit:
19. The following characteristics belong to job costing.
A. Costs are accumulated by job, product or service is unique
B. Product or service is unique and mass production
C. Mass production and every product is the same
D. Mass production and costs are accumulated by job.
20. Raondra Company uses ABC costing. Which of the following is most likely to be the cost driver for the cost of ordering parts?
A. square footage
B. direct labor cost
C. depreciation expense
D. number of orders placed
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