2. Bisson Furniture uses a process cost system to account for its chair factory. Beginning inventory consisted of 5,000 units (100% complete as to material, 55% complete as to labor) with a cost of $124,800 materials and $104,500 conversion. 58,000 units were started into production during the month with material costs of $1,537,000 and $2,124,375 of conversion costs. The ending inventory of 6,000 chairs was 100% complete as to materials and 40% complete as to labor. Bisson uses weighted-average costing.
Required: (HINT: use 4 decimal places in your calculations)
a. Compute the equivalent units of production for each input.
b. Compute the cost per unit.
c. Compute the cost transferred out to finished goods.
d. Compute the ending work-in-process inventory balance.
3. Bisson Furniture uses a process cost system to account for its chair factory. Beginning inventory consisted of 5,000 units (100% complete as to material, 55% complete as to labor) with a cost of $124,800 materials and $104,500 conversion. 58,000 units were started into production during the month with material costs of $1,537,000 and $2,124,375 of conversion costs. The ending inventory of 6,000 chairs was 100% complete as to materials and 40% complete as to labor. Bisson uses first-in, first-out (FIFO) costing.
Required: (HINT: use 4 decimal places in your calculations)
a. Compute the equivalent units of production for each input.
b. Compute the cost per unit.
c. Compute the cost transferred out to finished goods.
d. Compute the ending work-in-process inventory balance.
4. Acme Enterprises has identified the following overhead costs and cost drivers for the coming year:
Overhead Item Cost Driver Budgeted Cost Budgeted Activity Level
Quality Number of inspections $125,000 2,500
Engineering Engineering hours 100,000 2,500
Machine setup Setup hours 90,000 400
Material handling Number of material moves 85,000 1,000
Budgeted direct labor cost was $200,000 and budgeted direct material cost was $300,000. The following information was collected on three jobs that were completed during the month:
Job A Job B Job C
Direct materials $5,000 $2,800 $8,000
Direct labor $4,000 $4,000 $8,000
Units completed 200 100 300
Number of inspections 20 10 20
Number of material moves 60 20 80
Engineering hours 10 50 10
Number of setups 13 25 18
Required:
a. If the company uses traditional costing and allocates overhead using direct labor cost, how much overhead cost should be assigned to Job A, B, and C?
b. If the company uses activity-based costing (ABC), how much overhead cost should be assigned to Job A, B, and C?