Scribd
Upload
65 views

Assignment 1-Winter2024-Ch-Cost and Job Order Question

This document provides information and questions related to job order costing concepts. It includes questions about classifying different costs, calculating total variable and fixed costs, using the high-low method to estimate variable and fixed costs from mixed cost data, preparing schedules of cost of goods manufactured and cost of goods sold, calculating under or overapplied overhead, and journal entries to record manufacturing transactions. There are 9 multiple part questions requiring calculations and preparation of schedules to analyze and apply job order costing concepts.

Uploaded by

student.devyankgosain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
65 views

Assignment 1-Winter2024-Ch-Cost and Job Order Question

This document provides information and questions related to job order costing concepts. It includes questions about classifying different costs, calculating total variable and fixed costs, using the high-low method to estimate variable and fixed costs from mixed cost data, preparing schedules of cost of goods manufactured and cost of goods sold, calculating under or overapplied overhead, and journal entries to record manufacturing transactions. There are 9 multiple part questions requiring calculations and preparation of schedules to analyze and apply job order costing concepts.

Uploaded by

student.devyankgosain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 6

BUS 247-Chapter- Cost Concept and Job Order Costing

ASSIGNMENT 1- Part 1

Q1. A partial listing of costs incurred at Starr Corporation during June appears below:

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.

Q2. The following information summarizes the company's cost structure:

Required:

Estimate the following costs at the 40,000 unit level of activity:


a. Total variable cost.
b. Total fixed cost.
c. Variable cost per unit.
d. Fixed cost per unit.
Q3. Slonaker Inc. has provided the following data concerning its maintenance costs:
Management believes that maintenance cost is a mixed cost that depends on machine-hours.

Required:

Estimate the variable cost per machine-hour and the fixed cost per month using the high-low
method. Show your work!
Q4. Utility costs at one of Helker Corporation's factories are listed below:

Management believes that utility cost is a mixed cost that depends on machine-hours.

Required:

Estimate the variable cost per machine-hour and the fixed cost per month using the high-low
method. Show your work! Round off all calculations to the nearest whole cent.
Q5. Bill Pope has developed a new device that is so exciting he is considering quitting his
job in order to produce and market it on a large-scale basis. Bill will rent a garage for $300
per month for production purposes. Utilities will cost $40 per month. Bill has already taken
an industrial design course at the local community college to help prepare for this venture.
The course cost $300. Bill will rent production equipment at a monthly cost of $800. He
estimates the material cost per unit will be $5, and the labor cost will be $3. He will hire
workers and spend his time promoting the product. To do this he will quit his job which pays
$3,000 per month. Advertising and promotion will cost $900 per month.

Required:

Complete the chart below by placing an "X" under each heading that helps to identify the cost
involved. There can be "Xs" placed under more than one heading for a single cost, e.g., a cost
might be a sunk cost, an overhead cost and a product cost; there would be an "X" placed
under each of these headings opposite the cost.

* Between the alternatives of going into business to make the device or not going into
business to make the device.
Q6. Babb Company is a manufacturing firm that uses job-order costing. The company's
inventory balances were as follows at the beginning and end of the year:

The company applies overhead to jobs using a predetermined overhead rate based on
machine-hours. At the beginning of the year, the company estimated that it would work
17,000 machine-hours and incur $272,000 in manufacturing overhead cost. The following
transactions were recorded for the year:

Raw materials were purchased, $416,000.


Raw materials were requisitioned for use in production, $412,000 $(376,000 direct and
$36,000 indirect).
The following employee costs were incurred: direct labor, $330,000; indirect labor, $69,000;
and administrative salaries, $157,000.
Selling costs, $113,000.
Factory utility costs, $29,000.
Depreciation for the year was $121,000 of which $114,000 is related to factory operations
and $7,000 is related to selling, general, and administrative activities.
Manufacturing overhead was applied to jobs. The actual level of activity for the year was
15,000 machine-hours.
 Sales for the year totaled $1,282,000.

Required:

a. Prepare a schedule of cost of goods manufactured in good form.


b. Was the overhead underapplied or overapplied? By how much?
c. Prepare an income statement for the year in good form. The company closes any
underapplied or overapplied manufacturing overhead to Cost of Goods Sold.
Q7. Hirschman Corporation has provided the following data for the month of April:

Required:

Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in
good form.

Q8. At the beginning of the year, manufacturing overhead for the year was estimated to be
$250,860. At the end of the year, actual direct labor-hours for the year were 20,800 hours, the
actual manufacturing overhead for the year was $245,860, and manufacturing overhead for
the year was underapplied by $10,820. The predetermined overhead rate is based on direct
labour-hours.

Required:

What must have been the estimated direct labor-hours at the beginning of the year used in
setting the predetermined overhead rate?
Q9. The Celax Company uses a job-order costing system and applies manufacturing overhead
cost to jobs on the basis of the cost of materials used in production. At the beginning of the
most recent year, the following estimates were made as a basis for computing the
predetermined overhead rate for the year:

The following transactions took place during the year (all purchases and services were
acquired on account):

a.) Raw materials purchased: $76,000.


b.) Raw materials requisitioned for use in production (all direct materials): $90,000.
c.) Utility costs incurred in the factory: $15,000.
d.) Salaries and wages incurred as follows:

e.) Maintenance costs incurred in the factory: $20,000.


f.) Advertising costs incurred: $89,000.
g.) Depreciation recorded for the year: $80,000, of which 80% relates to factory assets and
the remainder relates to selling and administrative assets.
h.) Rental cost incurred on buildings: $70,000 (65% of the space is occupied by the factory,
and 35% is occupied by sales and administration).
i.) Miscellaneous selling and administrative costs incurred: $11,000.
j.) Manufacturing overhead cost was applied to jobs as per company policy.
k.) Cost of goods manufactured for the year: $500,000.
l.) Sales for the year (all on account): $2,000,000. These goods cost $900,000 to manufacture.

Required:

Prepare journal entries to record the information above. Key your entries by the letters a
through l.

You might also like