Accounting homework

Maverick Wings, Inc. manufactures airplanes for use in stunt shows. Maverick’s factory is highly automated, using the latest in robotic technology. To keep costs low, the company employs as few factory workers as possible. Since each plane has different features (such as its shape, weight, and color), Maverick uses a job order costing system to accumulate product costs. At the end of 2013, Maverick’s accountants developed the following expectations for 2014 based on the marketing department’s sales forecast:

Maverick’s inventory count, completed on December 31, 2013, revealed the following ending inventory balances:

The company’s 2014 payroll data revealed the following actual payroll costs for the year:

The following information was taken from Maverick’s Schedule of Plant Assets. All assets are depreciated using the straight-line method.

Other miscellaneous costs for 2014 all paid in cash included:

Additional information about Maverick’s operations in 2014 includes the following:

What was Maverick’s predetermined overhead rate in 2014?  (Round answer to 2 decimal places, e.g. 2.45%.)

Prepare the journal entries to record Maverick’s costs for 2014. (Use Salaries Payable and Wages Payable accounts for payroll costs.)  (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Post entries in order presented in the problem. Round answers to 0 decimal places, e.g. 345,000.)

Prepare the appropriate T-accounts for Raw Materials Inventory, Work-in-Process Inventory, Finished Goods Inventory, Manufacturing Overhead Control, Cost of Goods Sold, and Sales, and record Maverick’s transactions for 2014.  (Post entries in order presented in the problem. Round answers to 0 decimal places, e.g. 345,000.)

Was manufacturing under- or overapplied in 2014? By how much?  (Round answer to 0 decimal places, e.g. 345,000.)

Make the adjusting entry necessary to close the under- or overapplied overhead to cost of goods sold.  (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 345,000.)

If Maverick chooses instead to prorate under- or overapplied overhead, what would the adjusted balances be in Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold for 2014? (Round answers to 0 decimal places, e.g. 345,000 and percentage of total to 2 decimal places e.g. 34.52).

Job 3827 was started and completed in 2014. The job required 1,600 machine hours, 1,100 direct labor hours, and $77,000 in direct materials to complete. What was the total cost of this job? Using Maverick’s 80% markup, what sales price would be charged for this airplane?  (Round answers to 0 decimal places, e.g. 345,000.)

If Maverick had chosen to use machine hours as its overhead application base, what would the rate have been in 2014?  (Round answer to 2 decimal places, e.g. 2.45.)

Claire Company produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the following cost pools and cost drivers. They also decided that general costs should no longer be allocated to products.

Other information is as follows:

Calculate predetermined OH rate.  (Round answer to 2 decimal places, e.g. 15.25.)

Determine the unit product cost for Tablets and Books using the traditional costing system.  (Round overhead rate and final answers to 2 decmial places, e.g. 15.25.)

Calculate ABC rates.  (Round answers to 2 decimal places, e.g. 15.25.)

Determine the unit product cost for Tablets and Books using the activity-based costing system.  (Round all rates and final answers to 2 decmial places, e.g. 15.25.)

Show that General cost is the difference between the total overhead costs allocated to products under the traditional system and the total cost allocated to products under the activity-based costing system.  (Round answers to 0 decmial places, e.g. 1,525.)

Buttermilk Bakery has provided the following cost data for the last year when 107,000 loaves of bread were produced and sold.

All costs are variable except for $130,160 overhead and $81,340 selling and administrative. The sales price was $10 per loaf.

(a)

How many units must be sold to meet a target operating income of $358,570?

A manufacturer of potting soil has the following financial data:

(a)

What is the company’s unit contribution margin?  (Round answer to 2 decimal places, e.g. 1.64.)

Milsaps Company produces sportsmen’s digital scales. In preparing the current budget, Milsaps’ controller estimates a total of $294,000 in direct materials cost, $231,000 in direct labor cost, and $279,510 in manufacturing overhead costs. Since much of the production process requires skilled workers to assemble the scales, direct labor cost is used as the overhead application base. At the end of the period, Milsaps reported actual results as follows: direct materials cost of $295,000, direct labor cost of $224,000, and manufacturing overhead cost $266,790.

(a)

What is Milsaps’ predetermined overhead rate for the year?

Megan Industries manufactures several products including a basic case for a popular smart phone. The company is considering adopting an activity-based costing approach for setting its budget. The company’s production activities, budgeted activity costs, and cost drivers for the coming year are as follows.

The budgeted data for smart phone case production are as follows.

(a)

Calculate the activity rate for each cost pool.

Stockin Company produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the following cost pools and cost drivers. They also decided that general costs should no longer be allocated to products.

Other information is as follows:

(a)

Determine the unit product cost for Tablets using the traditional costing system.  (Round answer to 2 decimal places, e.g. 1.64.)