4 Accounting Problems

1

a.

PROBLEM 1 Millar Company has the following cost records for May 2016 Indirect factory labor $ 10,000 Advertising Expense $   8,000 Direct materials used 13,000 Depreciation, factory equipment 4,200 Work in process, 5/1/15 5,000 Direct labor 11,000 Work in process, 5/31/15 6,500 Maintenance, office equipment 2,000 Depreciation, office equipment 1,000 Indirect materials 1,200 Sales Commission 10,000 Office Manager Salary 4,000 Instructions    Prepare a cost of goods manufactured schedule for May 2016 MILLAR COMPANY Cost of Goods Manufactured Schedule For the Year Ended May 31, 2016

PROBLEM 2 Mottle Inc. fixed costs are expected to be $80,000 and variable costs are expected to be $20 per product. Sales price is $40 per product and targeted net income is $300,000 . Instructions a. Determine the required sales in units and dollars to break even. b. Determine the required sales in units to achieve targeted net income of $300,000.

PROBLEM 3 Marvin Company estimates that annual manufacturing overhead costs will be $900,000. Estimated annual operating activity bases are: direct labor cost $450,000, direct labor hours 300,000, and machine hours 150,000. a. Compute the predetermined overhead rate using (i) direct labor cost as the activity base (ii) direct labor hours as the activity base and (iii) machine hours as the activity base. b. If Job 101 has 60,000 direct labor hours, compute the manufacturing overhead that it should be assigned using the predetermined overhead rate computed in question a. above. c. If Job 102 has 20,000 machine hours, compute the manufacturing overhead that it should be assigned using the predetermined overhead rate computed in question a. above.

PROBLEM 4

Blake Johnson has the following cost and production data for the Mixing Department for December 2013

Cost data:

Beginning work in process inventory, December 1

Direct Materials $30,000

Conversion Cost $ 6,000

$36,000

Cost incurred during production in December

Direct Materials $390,000

Conversion costs $122,000

$512,000

Total Costs $548,000

Production data

Completed and transferred out 52,000

Ending work in process 8,000

Ending work in process was 100% complete as to materials and 25% complete as to conversion costs.

Instructions

(a) Compute the equivalent units for materials and conversion costs.

(b) Determine the unit cost for materials and conversion

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