Questions -
Q1. The Cake Factory has the following information for the month of March. Prepare a (a) schedule of cost of goods manufactured, (b) an income statement for the month ended March 31, and (c) prepare only the inventory section of the balance sheet.
|
Purchases
|
$85,000
|
|
Materials inventory, March 1
|
6,000
|
|
Materials inventory, March 31
|
7,000
|
|
Direct labor
|
25,000
|
|
Factory overhead
|
34,000
|
|
Work in process, March 1
|
17,000
|
|
Work in process, March 31
|
18,500
|
|
Finished goods inventory, March 1
|
21,000
|
|
Finished goods inventory, March 31
|
23,000
|
|
Sales
|
235,000
|
|
Sales and administrative expenses
|
78,000
|
Q2. The Good News Company accumulated 460 hours of direct labor on Job 345 and 810 hours on Job 777. The direct labor was incurred at a rate of $15 per direct labor hour for Job 345 and $13 per direct labor for Job 777. Journalize the entry to record the flow of labor costs into production.
Q3. Given the following cost and activity observations for Wondrous Company's utilities, use the high-low method to calculate Wondrous' variable utilities costs per machine hour.
|
Cost
|
Machine Hours
|
|
March
|
$3,100
|
15,000
|
|
April
|
2,700
|
10,000
|
|
May
|
2,900
|
12,000
|
|
June
|
3,500
|
18,000
|
$10.00
$.67
$.63
$.10
Q4. Jonus Company has fixed costs of $160,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products are provided below.
|
Product
|
Selling Price
|
Variable Cost per unit
|
Contribution Margin
per unit
|
|
X
|
$180
|
$80
|
$100
|
|
Y
|
$100
|
$50
|
$50
|
The sales mix for product X and Y is 60% and 40% respectively. Determine the break-even point in units of X and Y.
Q5. Barrack Inc. manufactures laser printers within a relevant range of production of 50,000 to 70,000 printers per year. The following partially completed manufacturing cost schedule has been prepared:
|
Number of Printers Produced
|
|
70,000
|
90,000
|
100,000
|
|
Total costs:
|
|
|
|
|
Total variable costs
|
$350,000
|
(d)
|
(j)
|
|
Total fixed costs
|
630,000
|
(e)
|
(k)
|
|
Total costs
|
$980,000
|
(f)
|
(l)
|
|
Cost per unit:
|
|
|
|
|
Variable cost per unit
|
(a)
|
(g)
|
(m)
|
|
Fixed cost per unit
|
(b)
|
(h)
|
(n)
|
|
Total cost per unit
|
(c)
|
(i)
|
(o)
|
Complete the preceding cost schedule, identifying each cost by the appropriate letter (a) through (o).