Round your answer to the nearest cent. In the Finishing Department, the dried paper is coated, cut, and spooled onto reels. The rest of the fixed expenses are common to the two territories. Data for the Assembly Department for May appear below: Materials Labor Overhead Cost added during May. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Hubs. It manufactures a product that passes through two departments. When sales are down and profits look like they are going to be lower than the president told the owners they were going to be, the president comes down here and asks us to deliver some more profits.Next
Required: Assuming that the company uses the direct method rather than the step-down method to allocate service department costs, how much cost would be assigned to each operating department? Do not prepare an income statement; use the degree of operating leverage to compute your answer. The company is discussing the construction of a new, automated manufacturing plant. Required: Prepare a cost reconciliation report for the Baking Department for June. In time, she hopes to open a chain of sandal shops. No need to wait for office hours or assignments to be graded to find out where you took a wrong turn. Prepare two contribution format income statements, one showing present operations and one showing how operations would appear if the new equipment is purchased. To provide funds to purchase materials, meet payrolls, and so forth, the company will have to liquidate some temporary investments.Next
Thus, profits vary considerably from year to year according to general economic conditions. Irving: Thanks for coming up with the calculations so quickly, and they look just fine. If actual sales are less than budgeted sales, it will diminish your financial compensation and potential for promotion. Management had expected sales to remain constant at 50,000 units; the increased production was designed to provide the company with a buffer of protection against unexpected spurts in demand. It's easier to figure out tough problems faster using Chegg Study. It is for this very reason that we place at your disposal the Solution Manual for Managerial Accounting 16th Edition By Garrison. When it applies more overhead to production than it actu- ally incurs, it results in overapplied overhead.Next
It considers all of its manufacturing overhead costs to be fixed costs. She is confident about her estimates of the costs of food and beverages and labor but is not as comfortable with the estimate of overhead cost. The company uses the weighted-average method in its process costing system. What insights revealed by this statement should be mentioned to management? Marvin: Oh, the Marketing Department will love that. Raw materials are introduced at various points in the Refining Department. Patient A Patient B Direct materials.Next
As a student, completing homework assignments can be challenging. The following information was available with respect to his job: Compute Mr. After finishing with the 150 pieces of luggage, your boss yelled at you for exceeding the 10 minute allowance for unloading luggage from an airplane. I like to work with goals that I can see and count! P—13 Why do companies that implement Lean Production tend to have minimal inventories? Hint: Do the cost of goods sold amounts that you computed in requirements 1 and 2 differ from one another? Assume all raw materials are used in production as direct materials. The remaining 7,500 batteries withdrawn from the storeroom were placed in cars being produced by the company. The company maintains no beginning or ending inventories and its manufacturing overhead costs are entirely fixed costs. The company had no work in process at the beginning of January.Next
Chapter Three Job-Order Costing: Cost Flows and External Reporting Questions 3—1 What is the link that connects the schedule of cost of goods manufactured to the schedule of cost of goods sold? The company uses the weighted-average method in its process costing system. Services Laboratory Radiology General Hospital Total Total cost. Chapter Two Job-Order Costing: Calculating Unit Product Costs Questions 2—1 What is job-order costing? What costing system would you advise the company to use? Your boss has said that, on average, each airplane contains 100 pieces of luggage. The following estimates were made at the beginning of the year: Department Fabricating Machining Assembly Total Plant Direct materials. Because you have produced more, the sales force has more units it can sell.Next
Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items. All it takes is the click of a button and you will be on your way to understanding your homework and completing it faster than ever before. It makes blended tropical fruit drinks in two stages. The company has enough customer demand to justify producing its full capacity of 2,000 sets per year. Required: Using the step-down method, prepare the cost allocation desired by the hospital administrator.Next
Department Fabricating Machining Assembly Total Plant Manufacturing overhead. The May 31 inventory consisted of 15,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. Carry computations to one decimal place. Third, they use them to evaluate and reward employees. The firm has two offices—one in Chicago and one in Minneapolis.