Taveras Corporation

25 Sep Taveras Corporation

Posted at 05:44h in General Questions by

Question #1:

Taveras Corporation is currently operating at 50% of its available manufacturing capacity. It uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:

Machine-hours required to support estimated production 240,000

Fixed manufacturing overhead cost $ 4,320,000

Variable manufacturing overhead cost per machine-hour $ 2.00

________________________________________

Required:

1. Compute the plantwide predetermined overhead rate.

2. During the year, Job P90 was started, completed, and sold to the customer for $4,000. The following information was available with respect to this job:

Direct materials $ 1,840

Direct labor cost $ 1,320

Machine-hours used 87

________________________________________

Compute the total manufacturing cost assigned to Job P90.

a) Predetermined overhead rate: per MH

b) During the year, Job P90 was started, completed and sold to the customer for $4,000. Compute the total manufacturing cost assigned to Job P90.

Direct materials

Direct labor

Overhead applied

Total manufacturing cost

Question #2:

Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:

Machine-hours required to support estimated production 153,000

Fixed manufacturing overhead cost $ 658,000

Variable manufacturing overhead cost per machine-hour $ 4.30

________________________________________

Required:

1. Compute the plantwide predetermined overhead rate.

2. During the year, Job 400 was started and completed. The following information was available with respect to this job:

Direct materials $ 390

Direct labor cost $ 290

Machine-hours used 39

________________________________________

Compute the total manufacturing cost assigned to Job 400.

3. If Job 400 includes 60 units, what is the unit product cost for this job?

4. If Moody uses a markup percentage of 130% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?

a) Predetermined overhead rate: per MH

b) Compute the total manufacturing cost assigned to Job 400. (Round your intermediate calculations to 2 decimal places and your final answer to the nearest dollar amount.) Total Manufacturing cost:

c) If Job 400 includes 60 units, what is the unit product cost for this job? (Round your answer to the nearest whole dollar.) Cost:

d) If Moody uses a markup percentage of 130% of its total manufacturing cost, then what selling price per unit would it have established for Job 400? (Round your answer to the nearest whole dollar.) Setting Price per Unit:

Question #3:

Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates:

Direct labor-hours required to support estimated production 130,000

Machine-hours required to support estimated production 65,000

Fixed manufacturing overhead cost $ 364,000

Variable manufacturing overhead cost per direct labor-hour $ 4.00

Variable manufacturing overhead cost per machine-hour $ 8.00

________________________________________

During the year, Job 550 was started and completed. The following information is available with respect to this job:

Direct materials $ 253

Direct labor cost $ 349

Direct labor-hours 15

Machine-hours 5

________________________________________

Required:

1. Assume that Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base. Under this approach:

a. Compute the plantwide predetermined overhead rate.

b. Compute the total manufacturing cost of Job 550.

c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?

2. Assume that Landen’s controller believes that machine-hours is a better allocation base than direct labor-hours. Under this approach:

a. Compute the plantwide predetermined overhead rate.

b. Compute the total manufacturing cost of Job 550.

c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?

(Round your intermediate calculations to 2 decimal places. Round your “Predetermined Overhead Rate” answers to 2 decimal places and all other answers to the nearest whole dollar.)

1 Direct Labor-hours

a. Predetermined overhead rate Per DLH

b. Total manufacturing cost of Job 550

c. Selling price

2 Machine Hours:

a. Predetermined overhead rate Per MH

b. Total manufacturing cost of Job 550

c. Selling price

Question #4:

Primare Corporation has provided the following data concerning last month’s manufacturing operations.

Purchases of raw materials $ 31,000

Indirect materials included in manufacturing overhead $ 4,960

Direct labor $ 59,800

Manufacturing overhead applied to work in process $ 88,300

Underapplied overhead $ 4,060

________________________________________

Inventories Beginning Ending

Raw materials $ 10,000 $ 19,100

Work in process $ 55,500 $ 67,300

Finished goods $ 34,700 $ 43,700

________________________________________

Required:

1. Prepare a schedule of cost of goods manufactured for the month.

2. Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.

Prepare a schedule of cost of goods manufactured for the month.

Primare Corporation

Schedule of Cost of Goods Manufactured

Direct materials:

See below For Choice to Insert Here A-G

See Below For Choice to Insert Here #1-11

Total raw materials available

See Below For Choice to Insert Here #1-11

Raw materials used in production

See Below For Choice to Insert Here #1-11

• See Below For Choice to Insert Here

Total manufacturing costs

See Below For Choice to Insert Here #1-5

See Below For Choice to Insert Here #6-11

Cost of goods manufactured

A. Beginning raw materials inventory

B. Direct Labor

C. Ending Raw Materials Inventory

D. Indirect Labor

E. Manufacturing Overhead applied to work in process

F. Purchasing of Raw Materials

G. Utilities

1. Add: Beginning Work in Process Inventory

2. Add: Ending Raw Materials Inventory

3. Add: Ending Work in progress Inventory

4. Add: Manufacturing Overhead Cost

5. Add: Purchase of Raw Materials

6. Less: Beginning Work in Process Inventory

7. Less: Ending Raw Materials Inventory

8. Less: Ending Work in progress Inventory

9. Less: Indirect Materials Including in Manufacturing overhead

10. Less: Manufacturing overhead cost

11. Less: Purchase of Raw Materials

• Beginning raw materials inventory

• Direct labor

• Ending raw materials inventory

• Indirect labor

• Manufacturing overhead applied to work in process

• Purchases of raw materials

• Utilities, Factory

Part 2:

Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.

Primare Corporation

Schedule of Cost of Goods Sold

Question #5:

Osborn Manufacturing uses a predetermined overhead rate of $19.20 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $249,600 of total manufacturing overhead for an estimated activity level of 13,000 direct labor-hours.

The company actually incurred $247,000 of manufacturing overhead and 12,500 direct labor-hours during the period.

Required:

1. Determine the amount of underapplied or overapplied manufacturing overhead for the period.

2. Assume that the company’s underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to dispose of the underapplied or overapplied overhead increase or decrease the company’s gross margin? By how much?

1. Manufacturing overhead Over Applied or Under Applied by

2. The gross margin would Increase or Decrease by

Question #6:

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):

Selling expenses $ 215,000

Purchases of raw materials $ 270,000

Direct labor ?

Administrative expenses $ 159,000

Manufacturing overhead applied to work in process $ 364,000

Actual manufacturing overhead cost $ 352,000

________________________________________

Inventory balances at the beginning and end of the year were as follows:

Beginning of Year End of Year

Raw materials $ 57,000 $ 37,000

Work in process ? $ 32,000

Finished goods $ 38,000 ?

________________________________________

The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $725,000; the unadjusted cost of goods sold totaled $662,000; and the net operating income was $37,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold.

Required:

Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)

Complete this question by entering your answers in the tabs below.

• Income Statement

• COGS Schedule

• COGM Schedule

Prepare an income statement for the year.

Superior Company

Income Statement

• See Below for Correct Insert to Complete the Table

Gross Loss or Gross Margin 0

Selling and administrative expenses:

• See Below for Correct Insert to Complete the Table

• See Below for Correct Insert to Complete the Table 0

Net Operating Income or Net Operating Loss

• Accounts payable

• Accounts receivable

• Accumulated depreciation

• Administrative expenses

• Cash

• Cost of goods sold

• Depreciation expense

• Finished goods

• Manufacturing overhead

• Raw materials

• Sales

• Selling expenses

• Wages payable

• Work in Progress

Prepare a schedule of cost of goods sold.

Superior Company

Schedule of Cost of Goods Sold

Chose Correct Wording from below to complete table

Adjusted cost of goods sold

• Beginning finished goods inventory

• Cost of goods available for sale

• Direct labor

• Raw materials inventory, beginning

• Raw materials inventory, ending

• Unadjusted cost of good sold

• Add: Cost of goods manufactured

• Add: Ending finished goods inventory

• Add: Overapplied overhead

• Add: Underapplied overhead

• Less: Cost of goods manufactured

• Less: Ending finished goods inventory

• Less: Overapplied overhead

• Less: Underapplied overhead

Prepare a schedule of cost of goods manufactured.

Superior Company

Schedule of Cost Goods Manufactured

Direct materials: