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The work-in-process inventory account of a manufacturing company




Question;1. The;work-in-process inventory account of a manufacturing company shows a balance of;$3,000 at the end of an accounting period. The job-cost sheets of the two;incomplete jobs show charges of $500 and $300 for direct materials, and charges;of $400 and $600 for direct labor. From;this information, it appears that the company is using a predetermined overhead;rate as a percentage of direct labor;costs. What percentage is the rate?;2. The;break-even point in dollar sales for Rice Company is $480,000 and the company?s contribution;margin ratio is 40 percent. If Rice Company desires a profit of $84,000, how much would sales have to total?;3. Williams;Company?s direct labor cost is 25 percent of its conversion cost. If the;manufacturing overhead for the last period was $45,000 and the direct material;cost was $25,000, how much is the direct labor cost?;4.;Grading Company?s cash and cash equivalents consist of cash and marketable securities. Last year the;company?s cash account decreased by;$16,000 and its marketable securities account increased by $22,000. Cash;provided by operating activities was $24,000. Net cash used for financing;activities was $20,000. Based on this information, was the net cash flow from;investing activities on the statement of cash flows a net increase or;decrease? By how much?;5.;Gladstone Footwear Corporation?s flexible budget cost formula for supplies, a variable cost, is;$2.82 per unit of output. The company?s flexible budget performance report for;last month showed an $8,140 unfavorable spending variance for supplies. During that month;21,250 units were produced. Budgeted activity for the month had been 20,900 units.;What is the actual cost per unit for indirect materials?;6.;Lyons Company consists of two divisions, A and B. Lyons Company reported a;contribution margin of $60,000 for Division A, and had a contribution margin;ratio of 30 percent in Division B, when sales in Division B were $240,000. Net;operating income for the company was $22,000 and traceable fixed expenses were;$45,000. How much were Lyons Company?s common fixed expenses?;7.;Atlantic Company produces a single product. For the most recent year, the company?s net operating;income computed by the absorption costing method was $7,800, and its net;operating income computed by the variable costing method was $10,500. The;company?s unit product cost was $15 under variable costing and $24 under;absorption costing. If the ending;inventory consisted of 1,460 units, how many units must have been in the;beginning inventory.;8.;Black Company uses the weighted-average method in its process costing system.;The company?s ending work-inprocess inventory consists of 6,000 units, 75;percent complete with respect to materials and 50 percent complete with respect;to labor and overhead. If the total;dollar value of the inventory is $80,000 and the cost per equivalent;unit for labor and overhead is $6.00, what is the cost per equivalent unit for;materials?;9.;At Overland Company, maintenance cost is exclusively a variable cost that;varies directly with machine-hours. The performance report for July showed that;actual maintenance costs totaled $11,315 and that the associated rate variance;was $146 unfavorable. If 7,300 machine-hours were actually worked during July;what is the budgeted maintenance cost per machine-hour?;10.;The cost of goods sold in a retail store totaled $650,000. Fixed selling and;administrative expenses totaled $115,000 and variable selling and;administrative expenses were $420,000. If the store?s contribution margin totaled $590,000, how much were the sales?;11.;Denny Corporation is considering replacing a technologically obsolete machine with a new;state-of-the-art numerically controlled;machine. The new machine would cost $600,000 and would have a 10-year useful;life. Unfortunately, the new machine would have no salvage value. The new;machine would cost $20,000 per year to;operate and maintain, but would save $125,000 per year in labor and;other costs. The old machine can be sold now for scrap for $50,000. What;percentage is the simple rate of return on the new machine rounded to the;nearest tenth of a percent? (Ignore income taxes in this problem.);12.;Lounsberry Inc. regularly uses material O55P and currently has in stock 375;liters of the material, for which it paid $2,700 several weeks ago. If this;were to be sold as is on the open market as surplus material, it would fetch;$6.35 per liter. New stocks of the material can be purchased on the open market;for $7.20 per liter, but it must be purchased in lots of 1,000 liters. You?ve;been asked to determine the relevant cost of 900 liters of the material to be;used in a job for a customer. What is the relevant cost of the 900 liters of;material O55P?;13.;Harwichport Company has a current ratio of 3.0 and an acid-test ratio of 2.8.;Current assets equal $210,000, of which $5,000 consists of prepaid expenses.;The remainder of current assets consists of cash, accounts receivable;marketable securities, and inventory. What is the amount of Harwichport;Company?s inventory?;14.;Tolla Company is estimating the following sales for the first six months of;next year;January;$350,000;February;$300,000;March;$320,000;April;$410,000;May;$450,000;June;$470,000;Sales;at Tolla are normally collected as 70 percent in the month of sale, 25 percent;in the month following the sale, and the remaining 5 percent being;uncollectible. Also, customers paying in the month of sale are given a 2;percent discount. Based on this information, how much cash should Tolla expect;to collect during the month of April?;15.;Trauscht Corporation has provided the following data from its activity-based;costing system;Activity;Cost Pool Total Cost Total;Activity;Assembly;$704,880 44,000;machine-hours;Processing;orders $91,428 1,900;orders;Inspection;$117,546 1,950;inspection-hours;The;company makes 360 units of product P23F a year, requiring a total of 725;machine-hours, 85 orders, and 45 inspection-hours per year. The product?s;direct materials cost is $42.30 per unit and its direct labor cost is $14.55;per unit. The product sells for $132.10 per unit. According to the;activity-based costing system, what is the product margin for product P23F?;16.;Williams Company?s direct labor cost is 30 percent of its conversion cost. If;the manufacturing overhead for the last period was $59,500 and the direct;materials cost was $37,000, what is the direct labor cost?;17.;In a recent period, 13,000 units were produced, and there was a favorable labor;efficiency variance of $23,000. If 40,000 labor-hours were worked and the;standard wage rate was $13 per labor-hour, what would be the standard hours;allowed per unit of output?;18.;The balance in White Company?s work-in-process inventory account was $15,000 on;August 1 and $18,000 on August 31. The company incurred $30,000 in direct labor;cost during August and requisitioned $25,000 in raw materials (all direct;material). If the sum of the debits to the manufacturing overhead account total;$28,000 for the month, and if the sum of the credits totaled $30,000, then was;Finished Goods debited or credited? By how much?;Activity;Cost Pool Total Cost Total;Activity;Assembly;$704,880 44,000;machine-hours;Processing;orders $91,428 1,900;orders;Inspection;$117,546 1,950;inspection-hours;19.;A company has provided the following data;Sales;4,000 units;Sales;price $80 per unit;Variable;cost $50 per unit;Fixed;cost $30,000;If;the dollar contribution margin per unit is increased by 10 percent, total fixed;cost is decreased by 15 percent, and all other factors remain the same, will;net operating income increase or decrease? By how much?;20.;For the current year, Paxman Company incurred $175,000 in actual manufacturing;overhead cost. The manufacturing overhead account showed that overhead was;overapplied in the amount of $9,000 for the year. If the predetermined overhead;rate was $8.00 per direct labor-hour, how many hours were worked during the;year?


Paper#45101 | Written in 18-Jul-2015

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