1. (TCO F) Whether a company uses process costing or job-order costing depends on its industry. A number of companies in different industries are listed below:
i. Brick manufacturer
ii. Contract printer that produces posters, books, and pamphlets to order
iii. Natural gas production company
iv. Dairy farm
v. Coal mining company
For each company, indicate whether the company is most likely to use job-order costing or process costing.
(Points : 15)
2. (TCO F) Job 484 was recently completed. The following data have been recorded on its job cost sheet:
Direct materials $57,240
Direct labor hours 1,692 DLHs
Direct labor wage rate $12 per DLHS
Number of units completed 3,600 units
The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $24 per direct labor-hour.
Compute the unit product cost that would appear on the job cost sheet for this job. (Points : 15)
3. (TCO F) Miller Company manufactures a product for which materials are added at the beginning of the manufacturing process. A review of the company's inventory and cost records for the most recently completed year revealed the following information:
Units Materials Conversion
Work in process. Jan. 1 (80% complete with respect to conversion costs) 100,000 $100,000 $157,500
Units started into production 500,000
Costs added during the year:
Materials $650,000
Conversion $997,500
Units completed during the year 450,000
The company uses the weighted-average cost method in its process costing system. The ending inventory is 50% complete with respect to conversion costs.
Required:
i. Compute the equivalent units of production and the cost per equivalent units for materials and for conversion costs.
ii. Determine the cost transferred to finished goods.
iii. Determine the amount of cost that should be assigned to the ending work in process inventory. (Points : 15)
4. (TCO F) Weisinger Corporation has provided the following data for the month of January:
Inventories Beginning Ending
Raw materials $28,000 $29,000
Work In process $16,000 $14,000
Finished goods $42,000 $54,000
Additional Information
Raw material purchases $56,000
Direct labor costs $87,000
Manufacturing overhead cost incurred $51,000
Indirect materials included in manufacturing overhead costs incurred $3,000
Manufacturing overhead cost applied to work in process $55,000
Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form. (Points : 15)
i. Brick manufacturer
ii. Contract printer that produces posters, books, and pamphlets to order
iii. Natural gas production company
iv. Dairy farm
v. Coal mining company
For each company, indicate whether the company is most likely to use job-order costing or process costing.
(Points : 15)
2. (TCO F) Job 484 was recently completed. The following data have been recorded on its job cost sheet:
Direct materials $57,240
Direct labor hours 1,692 DLHs
Direct labor wage rate $12 per DLHS
Number of units completed 3,600 units
The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $24 per direct labor-hour.
Compute the unit product cost that would appear on the job cost sheet for this job. (Points : 15)
3. (TCO F) Miller Company manufactures a product for which materials are added at the beginning of the manufacturing process. A review of the company's inventory and cost records for the most recently completed year revealed the following information:
Units Materials Conversion
Work in process. Jan. 1 (80% complete with respect to conversion costs) 100,000 $100,000 $157,500
Units started into production 500,000
Costs added during the year:
Materials $650,000
Conversion $997,500
Units completed during the year 450,000
The company uses the weighted-average cost method in its process costing system. The ending inventory is 50% complete with respect to conversion costs.
Required:
i. Compute the equivalent units of production and the cost per equivalent units for materials and for conversion costs.
ii. Determine the cost transferred to finished goods.
iii. Determine the amount of cost that should be assigned to the ending work in process inventory. (Points : 15)
4. (TCO F) Weisinger Corporation has provided the following data for the month of January:
Inventories Beginning Ending
Raw materials $28,000 $29,000
Work In process $16,000 $14,000
Finished goods $42,000 $54,000
Additional Information
Raw material purchases $56,000
Direct labor costs $87,000
Manufacturing overhead cost incurred $51,000
Indirect materials included in manufacturing overhead costs incurred $3,000
Manufacturing overhead cost applied to work in process $55,000
Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form. (Points : 15)
