Problem 1: Urban Company manufactures a product through a continuous single-step process. All materials are added at the beginning of processing. Production and cost data for the company for February 2009 are as follows:
Production data:
In process, beginning of month (20% converted) 1,000 units
Started during February 5,000 units
Completed and transferred to finished goods 4,500 units
In process, end of month (60% converted) 1,500 units
Manufacturing costs:
Work in process, beginning $14,730
Materials $45,000
Direct labor cost $102,960
Factory overhead cost $51,480
Required:
Prepare a cost of production report for February 2009. Use FIFO process costing.
Problem 2. York, Inc., manufactures a product that passes through two processes: Mixing and Packaging. All manufacturing costs are added uniformly in the Mixing Department. Information for the Mixing Department for December follows:
Work in process, December 1:
Units (30% complete) 7,500
Direct materials $2,000
Direct labor $1,500
Overhead $1,188
During December, 150,000 units were completed and transferred to Packaging. The following costs were incurred by the Mixing Department during December:
Direct materials $25,000
Direct labor 15,000
Overhead 6,000
There were 12,000 units that were 70 percent complete remaining in the Mixing Department at December 30. Use the weighted average method and round unit costs to two decimal places.
Required:
a. Determine the equivalent units of production for December.
b. Determine the total costs to account for in December.
c. Determine the total cost per equivalent unit of production.
d. Calculate the cost of goods transferred to the Packaging Department.
e. Calculate the cost of December's ending work in process for the Mixing Department.
Problem 3. Dobro Company has two production Departments: A and B. Dobro has following budgeted overhead costs and activity:.
Overhead costs Direct labor hours Machine hours
Department A $50,000 10,000 5,000
Department B $175,000 5,000 25,000
Total $250,000 15,000 30,000
Production data for job 20 and 21 are given below:
Job 20 Job 21
Dept A Dept B Dept A Dept B
Prime costs $7,000 $12,000 $22,000 $30,000
Direct labor hours 50 5 60 5
Machine hours 10 40 10 50
Job 20 Job 21
Units produced 100 100
Required:
a. Compare the costs per unit of Job 20
1. if Dobro uses a plantwide rate based on direct labor hour;
2. if Dobro uses a plantwide rate based on machine hours;
3. if Dobro uses departmental rates with department A based on direct labor hours and department B using machine hours.(round to 2 decimal places)
b. Why is there such a variation in the cost per unit? Which method provides the best cost assignment?
Problem 4. The following information was taken from the job cost sheet for Job 101 for Scott Manufacturing Company:
Date started: July 5, 2009
Date completed: August 21, 2009
Direct Direct Factory Job
Date Materials Labor Overhead Total
7-05-04 $3,000
7-15-04 $ 900 $450
7-17-04 1,500
7-22-04 1,350 675
8-01-04 1,500
8-21-04 600 300
Job 101 was sold on account on August 25, 2009, for 160 percent of its cost.
Required:
a. Prepare the journal entries to record the costs incurred for Job 101 in 2009 for direct materials, direct labor, and factory overhead.
b. Prepare the journal entry to record the completion of Job 101.
c. What is the predetermined factory overhead rate for Scott?
d. Prepare the journal entries to record the sale of Job 101.