Exercise 1) The Lakeside Company uses a weighted-average process costing system. The
following data are available:
what is Equivalent units of production for labor and overhead?
Beginning inventory
-0-
Units started in production
20,000
Units finished during the period
16,000
Units in process at the end of the period
(100%complete as to materials, 25%
complete as to labor and overhead)
4,000
Cost of materials used
$35,200
Labor and overhead costs
$37,400
Exercise 2) fill in the missing values
Case (A)
Case (B)
Case (C)
$8,630
$71,600
34,360
?
75,100
Transferred In (TI)
194,600
42,600
?
Transferred Out
(TO)
192,800
46,500
181,900
Beginning Balance
(BB)
Ending Balance
(EB)
?
Exercise 3) The Bondi Company uses a predetermined overhead rate in applying overhead to production
orders on a direct labor cost basis in Department A and on a machine hours basis in Department B. At the
beginning of the year, the company made the following estimates:
Dept. A
Dept. B
Direct labor cost
$60,000
$40,000
Factory overhead
$90,000
$45,000
Direct labor hours
6,000
9,000
Machine hours
2,000
15,000
What predetermined overhead rate would be used in Department A and Department B, respectively?
Exercise 4) A partial listing of costs incurred at Marshall Corporation
during August appears below:
Direct materials DM
$135,000
Utilities, factory F.MOH
$11,000
Sales commissions V.admin&selling
$69,000
Administrative salaries F.admin&selling
$101,000
Indirect labor V.MOH
$29,000
Advertising F.admin&selling
$94,000
Depreciation of production equipment F.MOH
$31,000
Direct labor DL
$73,000
Depreciation of administrative equipment F.admin&selling
$40,000
Required:
a. What is the total amount of product cost listed above? Show your
work.
b. What is the total amount of period cost listed above? Show your
work.
c. what is prime cost
d. what is conversion cost
e. what is total variable costs
f. what is total fixed costs
EXERCISE 5
Calico Company costs its products using a normal costing system.
Overhead is applied on the basis of machine hours. The following
information is available for last year:
Budget
Actual
Overhead..............................
$525,000
$497,500
Machine hours.....................
50,000
48,000
Direct labor hours................
75,000
72,000
Prime cost............................
$561,750
Units produced.....................
175,000
Required:
a. What is the total amount of product cost listed above? Show your
work.
b. What is the total amount of period cost listed above? Show your
work.
c. what is prime cost
d. what is conversion cost
e. what is total variable costs
f. what is total fixed costs
EXERCISE 6
TTY Corp. uses a job-order costing system to account for its production. During the month of
January, the following events occurred:
a. Materials were purchased on account for $35,480.
b. Materials totaling $33,650 were requisitioned for use in production.
c. Direct labor payroll was $15,750 for January.
d. Actual overhead of $41,260 was incurred and paid. (Use the account title “Various
Accounts.”)
e. Factory overhead was charged to production at the rate of 280 percent of direct labor.
f. Completed units costing $85,450 were transferred to finished goods.
g. Units costing $77,825 were sold on account for $101,175.
Required:
1. Prepare the journal entries for the above events.
EXERCISE 7
Antz is a custom manufacturer of electronic circuit boards. Antz develops bids for jobs based
on an estimate of the materials needed and a labor estimate. Overhead is applied on the basis
of direct labor hours. A 15 percent profit margin is then added to each job for the final bid.
During 2004, Antz had the following costs:
Materials........................................
$175,000
Labor (all direct)............................
25,000
Overhead........................................
250,000
After some consideration the manager of Antz decided that overhead was not caused totally
by direct labor. Approximately one-half of the overhead represented the cost of purchasing,
storing, and issuing materials to production. Thus, the manager has decided to develop a
multiple overhead rate system.
Required:
1. Compute the predetermined overhead rate if direct labor hours are used. Assume a wage
rate of $5 per hour.
2. Antz has been given two jobs to bid on. Estimated materials and labor are as follows:
Job 1
Job 2
Materials costs...........................
$15,000
$50,000
Labor hours................................
700 DLHs 600 DLHs
What is the total cost for each job for each job
EXERCISE 8
Job 5432 was recently completed. The following data have been recorded
on its job cost sheet:
Direct materials
Direct labor-hours
Direct labor wage rate
Number of units completed
$40,610
1,147 DLHs
$11 per DLH
3,100 units
The company applies manufacturing overhead on the basis of direct laborhours. The predetermined overhead rate is $20 per direct labor-hour.
Required: Compute the unit product cost that would appear on the job
cost sheet for Job 5432.
EXERCISE 9
Assume that Al Etihad company has over- applied overhead of AED
300,000. The company allocates any under-applied or over-applied
overhead to Work in Process, Finished Goods, and Cost of Goods Sold
on the basis of the amount of overhead applied during the year that
remains in each account at the end of the year. These amounts are
$23,200 for Work in Process, $380,800 for Finished Goods, and
$537,000 for Cost of Goods Sold.
Prepare the journal entry to show the allocation