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Exercise 16-3 and 17-1




Exercise 16-3;The ledger of Custer Company has the following work in process account.;Work in Process?Painting;5/1 Balance 3910;5/31 Materials 6280;5/31 Labor 3900;5/31 Overhead 1640;5/31 Transferred out?;5/31 Balance?;Production records show that there were 600 units in the beginning inventory, 30% complete, 1,580 units started, and 1,430 units transferred out. The beginning work in process had materials cost of $2,210 and conversion costs of $1,700. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.;Instructions;(a) How many units are in process at May 31? (I already found that it's 750 units);(b) What is the unit materials cost for May?;(c) What is the unit conversion cost for May?;(d) What is the total cost of units transferred out in May?;(e) What is the cost of the May 31 inventory?;Exercise 17-1;Wilkins Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company?s operations.;Standard Custom;Direct labor costs $48,200 $114,000;Machine hours 1480 1120;Setup hours 110 440;Total estimated overhead costs are $309,500. Overhead cost allocated to the machining activity cost pool is $199,000, and $110,500 is allocated to the machine setup activity cost pool.;Instructions;(a) Compute the overhead rate using the traditional (plant-wide) approach. (% of direct labor cost);(b) Compute the overhead rates using the activity-based costing approach.;(c) Determine the difference in allocation between the two approaches.;PLEASE show your work


Paper#75860 | Written in 18-Jul-2015

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