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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 material, and charges of $400 and $600 for direct labor. From this;information, it appears that the company is using a predetermined overhead rate;of direct labor. What percentage is the rate?;2. The break-even point in dollar sales for Rice Company is $480,000 and the;company 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 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 Corporation?s flexible budget cost formula for supplies, a;variable cost is $2.28 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 material?;6. Lyons Company consist 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 on division B were $240,000. Net;operating income for the company was $22,000 and traceable fixed expenses;$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 computing by 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 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-in-process inventory consist 6,000 units, 75;percent complete with respect to materials and 50 percent 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 at variable cost that;varies directly with machine-hours. The Performance report for July showed that;actual maintenance cost 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 stored 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 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 cost. The old machine can be sold now for a 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 the 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 stock 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 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 a acid test ratio of;2.8. Current assets equal $210,000 of which $5,000 consists of prepaid;expenses. The remainder of current assets consisst of cash, account receivable;marketable securities, and inventory. What is the


Paper#45168 | Written in 18-Jul-2015

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