Explore BrainMass

Explore BrainMass

    Cost Accounting Explained in this Solution

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Solve the following problems. Show all your calculations. You may use the space provided. (If you prefer to use Excel or add supplemental pages within this document, please clearly identify the problem number.)

    11. Messinger Manufacturing Company had the following account balances for the quarter ending March 31, unless otherwise noted:

    Work-in-process inventory (January 1) $140,400
    Work-in-process inventory (March 31) 171,000
    Finished goods inventory (January 1) 540,000
    Finished goods inventory (March 31) 510,000

    Direct materials used 378,000
    Indirect materials used 84,000
    Direct manufacturing labor 480,000
    Indirect manufacturing labor 186,000

    Property taxes on manufacturing plant building 28,800
    Salespersons' company vehicle costs 12,000
    Depreciation of manufacturing equipment 264,000
    Depreciation of office equipment 123,600

    Miscellaneous plant overhead 135,000
    Plant utilities 92,400
    General office expenses 305,400
    Marketing distribution costs 30,000

    Required:
    a. Prepare a cost of goods manufactured schedule for the quarter.
    b. Prepare a cost of goods sold schedule for the quarter.

    12. Furniture, Inc., sells lamps for $30. The unit variable cost per lamp is $22. Fixed costs total $9,600.

    Required:
    a. What is the contribution margin per lamp?
    b. What is the breakeven point in lamps?
    c. How many lamps must be sold to earn a pretax income of $8,000?
    d. What is the margin of safety, assuming 1,500 lamps are sold?

    13. Jordan Company has two departments, X and Y. Overhead is applied based on direct labor cost in Department X and machine-hours in Department Y. The following additional information is available:

    Budgeted Amounts Department X Department Y
    Direct labor cost $180,000 $165,000
    Factory overhead $225,000 $180,000
    Machine-hours 51,000 mh 40,000 mh

    Actual data for Job #10 Department X Department Y
    Direct materials $10,000 $16,000
    requisitioned
    Direct labor cost $11,000 $14,000
    Machine-hours 5,000 mh 3,000 mh

    Required:
    a. Compute the budgeted factory overhead rate for Department X.
    b. Compute the budgeted factory overhead rate for Department Y.
    c. What is the total overhead cost of Job 10?
    d. If Job 10 consists of 50 units of product, what is the unit cost of this job?

    14. The following information pertains to Amigo Corporation:

    Month Sales Purchases
    July $30,000 $10,000
    August 34,000 12,000
    September 38,000 14,000
    October 42,000 16,000
    November 48,000 18,000
    December 60,000 20,000

    Cash is collected from customers in the following manner:
    Month of sale (2% cash discount) 30%
    Month following sale 50%
    Two months following sale 15%
    Amount uncollectible 5%
    40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.

    Required:
    a. Prepare a summary of cash collections for the 4th quarter.
    b. Prepare a summary of cash disbursements for the 4th quarter.

    15. Madzinga's Draperies manufactures curtains. A certain window requires the following:

    Direct materials standard 10 square yards at $5 per yard
    Direct manufacturing labor standard 5 hours at $10

    During the second quarter, the company made 1,500 curtains and used 14,000 square yards of fabric costing $68,600. Direct labor totaled 7,600 hours for $79,800.

    Required:
    a. Compute the direct materials price and efficiency variances for the quarter.
    b. Compute the direct manufacturing labor price and efficiency variances for the quarter.

    16. The Wildcat Company has provided the following information:

    Units of Output 30,000 Units 42,000 Units
    Direct materials $ 180,000 $ 252,000
    Workers' wages 1,080,000 1,512,000
    Supervisors' salaries 312,000 312,000
    Equipment depreciation 151,200 151,200
    Maintenance 81,600 110,400
    Utilities 384,000 528,000
    Total $2,188,800 $2,865,600

    Using the high-low method and the information provided above,
    a. identify the linear cost function equation and
    b. estimate the total cost at 36,000 units of output.

    17. Bruster Company sells its products for $66 each. The current production level is 25,000 units, although only 20,000 units are anticipated to be sold.

    Unit manufacturing costs are:
    Direct materials $12.00
    Direct manufacturing labor $18.00
    Variable manufacturing costs $9.00
    Total fixed manufacturing costs $180,000
    Marketing expenses $6.00 per unit, plus $60,000 per year

    Required:
    a. Prepare an income statement using absorption costing.
    b. Prepare an income statement using variable costing.

    18. Lewis Auto Company manufactures a part for use in its production of automobiles. When 10,000 items are produced, the costs per unit are:

    Direct materials $ 12
    Direct manufacturing labor 60
    Variable manufacturing overhead 24
    Fixed manufacturing overhead 32
    Total $128

    Monty Company has offered to sell Lewis Auto Company 10,000 units of the part for $120 per unit. The plant facilities could be used to manufacture another part at a savings of $180,000 if Lewis Auto accepts the supplier's offer. In addition, $20 per unit of fixed manufacturing overhead on the original part would be eliminated.

    Required:
    a. What is the relevant per unit cost for the original part?
    b. Which alternative is best for Lewis Auto Company? By how much?

    © BrainMass Inc. brainmass.com March 4, 2021, 9:46 pm ad1c9bdddf
    https://brainmass.com/business/financial-accounting-bookkeeping/cost-accounting-explained-in-this-solution-270162

    Solution Preview

    Below are eight essay questions
    Solve the following problems. Show all your calculations. You may use the space provided. (If you prefer to use Excel or add supplemental pages within this document, please clearly identify the problem number.)

    11. Messinger Manufacturing Company had the following account balances for the quarter ending March 31, unless otherwise noted:

    Work-in-process inventory (January 1) $140,400
    Work-in-process inventory (March 31) 171,000
    Finished goods inventory (January 1) 540,000
    Finished goods inventory (March 31) 510,000

    Direct materials used 378,000
    Indirect materials used 84,000
    Direct manufacturing labor 480,000
    Indirect manufacturing labor 186,000

    Property taxes on manufacturing plant building 28,800
    Salespersons' company vehicle costs 12,000
    Depreciation of manufacturing equipment 264,000
    Depreciation of office equipment 123,600

    Miscellaneous plant overhead 135,000
    Plant utilities 92,400
    General office expenses 305,400
    Marketing distribution costs 30,000

    Required:
    a. Prepare a cost of goods manufactured schedule for the quarter.
    b. Prepare a cost of goods sold schedule for the quarter.

    Messinger Manufacturing Company
    Cost of Goods Manufactured and Sold
    For Quarter
    Direct raw materials used 378,000
    Direct labor 480,000
    Overhead
    Indirect Material 84,000
    Indirect Labor 186,000
    Property taxes on Plant Building 28,800
    Depreciation of manufacturing equipment 264,000
    Miscellaneous plant overhead 135,000
    Plant Utilities 92,400 790,200
    Total manufacturing costs 1,648,200
    Plus: Beginning W-I-P inventory 140,400
    Total W-I-P inventory 1,788,600
    Less: Ending W-I-P inventory (171,000)
    Cost of goods manufactured 1,617,600
    Plus: Beginning finish. goods inventory 540,000
    Cost of goods available for sale 2,157,600
    Less ending finished goods inventory (510,000)
    Cost of goods sold $1,647,600

    12. Furniture, Inc., sells lamps for $30. The unit variable cost per lamp is $22. Fixed costs total $9,600.

    Required:
    a. What is the contribution margin per lamp?

    Contribution margin per lamp = unit selling price - unit variable cost
    = 30-22 = $8

    b. What is the breakeven point in lamps?

    Breakeven point in units = Fixed cost/contribution margin per unit
    Breakeven point in units = 9,600/8 = 1,200 units

    c. How many lamps must be sold to earn a pretax income of $8,000?

    Units to be sold = (Fixed cost + desired profit)/unit contribution margin
    Units to be sold = (9,600+8,000)/8 = 2,200 units

    d. What is the margin of safety, assuming 1,500 lamps are sold?

    Margin of safety = Current Sales - Breakeven Sales
    Margin of Safety = 1,500-1,200 = 300 units or $9,000

    13. Jordan Company has two departments, X and Y. Overhead is applied based on direct labor cost in Department X and machine-hours in Department Y. The following additional information is available:

    Budgeted Amounts Department X Department Y
    ...

    Solution Summary

    The solution explains various questions relating to cost accounting. 8 questions answered.

    $2.49

    ADVERTISEMENT