1. Grogan Manufacturing is working on two jobs. Cost is accumulated under a job order cost system, and overhead is applied on the basis of direct labor hours. The company estimated that overhead would be $32,000 and 10,000 direct labor hours would be worked. Both projects were started and completed in the current accounting period. The following transactions were completed during the period:
(a) Used $5,000 of direct material on Project I and $3,400 of direct material on Project II.
(b) Labor costs for the two jobs amounted to the following: Project I, $12,000 (2,000 hours); Project II, $22,000 (6,000 hours).
(c) Project II was sold during the period for $60,000.
How do I calculate the ending balance in work in process?
2. Crown Company is considering purchase of equipment that costs $60,000. If the useful life is expected to be 5 years and Crown's required rate of return is 10%, what is the minimum annual cash inflow that the equipment must offer for the investment to be acceptable? Please show calculations.
3. Graves Company is considering purchase of equipment that costs $60,000 and is expected to offer annual cash inflows of $19,000. Graves' minimum required rate of return is 10%. How many years must the cash flows last, for the investment to be acceptable? (Round to nearest whole year.) Please show calculations.
A description of managerial account questions are given. Project II being sold during the period are given.