Ch2, Job-Order Costing Calculating Unit Product Costs Part 16

[QUESTION] 257. Lezo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 40,000 machine-hours, total fixed manufacturing overhead cost of $136,000, and a variable manufacturing overhead rate of $2.90 per machine-hour. Job A290, which was for 60 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total machine-hours....................... Direct materials.............................. Direct labor cost............................. 300 $585 $7,200 Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year. c. Calculate the amount of overhead applied to Job A290. d. Calculate the total job cost for Job A290. Answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $136,000 + ($2.90 per machine-hour × 40,000 machine-hours) = $136,000 + $116,000 = $252,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $252,000 ÷ 40,000 machine-hours = $6.30 per machine-hour c. Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $6.30 per machine-hour × 300 machine-hours = $1,890 d. Direct materials.................................. Direct labor........................................ Manufacturing overhead applied....... Total cost of Job A290....................... Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement $585 7,200 1,890 $9,675 [QUESTION] 258. Whitlatch Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours........................................................ Total fixed manufacturing overhead cost......................... Variable manufacturing overhead per machine-hour....... 60,000 $342,000 $2.70 Recently Job M238 was completed with the following characteristics: Number of units in the job............... Total machine-hours....................... Direct materials.............................. 70 140 $945 Direct labor cost............................. $2,800 Required: Calculate the total job cost for Job M238. Answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $342,000 + ($2.70 per machine-hour × 60,000 machine-hours) = $342,000 + $162,000 = $504,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $504,000 ÷ 60,000 machine-hours = $8.40 per machine-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $8.40 per machine-hour × 140 machine-hours = $1,176 Direct materials.................................. Direct labor........................................ Manufacturing overhead applied....... Total cost of Job M238....................... Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement $945 2,800 1,176 $4,921 [QUESTION] 259. Obermeyer Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on 10,000 direct laborhours, total fixed manufacturing overhead cost of $96,000, and a variable manufacturing overhead rate of $3.60 per direct labor-hour. Job A735, which was for 40 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total direct labor-hours................... Direct materials.............................. Direct labor cost............................. 200 $540 $6,400 Required: a. Calculate the amount of overhead applied to Job A735. b. Calculate the total job cost for Job A735. c. Calculate the unit product cost for Job A735. Answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $96,000 + ($3.60 per direct labor-hour × 10,000 direct labor-hours) = $96,000 + $36,000 = $132,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $132,000 ÷ 10,000 direct labor-hours = $13.20 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $13.20 per direct labor-hour × 200 direct labor-hours = $2,640 b. Direct materials.................................. $540 Direct labor........................................ Manufacturing overhead applied....... Total cost of Job A735....................... c. Total cost of Job A735 (a).................. Number of units (b)............................ Unit product cost (a) ÷ (b).................. Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement 6,400 2,640 $9,580 $9,580 40 $239.50 [QUESTION] 260. Olmscheid Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the beginning of the period to calculate predetermined overhead rates: Estimated total machine-hours (MHs)................................. Estimated total fixed manufacturing overhead cost............. Estimated variable manufacturing overhead cost per MH. . . Molding Customizing Total 5,000 5,000 10,000 $21,000 $14,000 $35,000 $1.50 $2.40 During the period, the company started and completed two jobs--Job F and Job K. There were no beginning inventories. Data concerning those two jobs follow: Direct materials........................ Direct labor cost....................... Molding machine-hours............ Customizing machine-hours..... Job F Job K $12,700 $6,400 $19,100 $7,900 3,400 1,600 2,000 3,000 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job F. c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job K. d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job F. e. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job K. f. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 30% on manufacturing cost to establish selling prices. Calculate the selling price for Job F. g. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 30% on manufacturing cost to establish selling prices. Calculate the selling price for Job K. h. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. If both jobs were sold during the month, what was the company's cost of goods sold for the month? Answer: a. The first step is to calculate the estimated total overhead costs in the two departments. Molding Estimated fixed manufacturing overhead.......................................................... Estimated variable manufacturing overhead ($1.50 per MH × 5,000 MHs)...... Estimated total manufacturing overhead cost................................................... $21,000 7,500 $28,500 Customizing Estimated fixed manufacturing overhead.......................................................... Estimated variable manufacturing overhead ($2.40 per MH × 5,000 MHs)...... Estimated total manufacturing overhead cost................................................... $14,000 12,000 $26,000 The second step is to combine the estimated manufacturing overhead costs in the two departments ($28,500 + $26,000 = $54,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost ....... Estimated total machine hours............................... Predetermined overhead rate................................ $54,500 10,000 MHs $5.45 per MH b. The overhead applied to Job F is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $5.45 per MH x (3,400 MHs + 2,000 MHs) = $5.45 per MH x (5,400 MHs) = $29,430 c. The overhead applied to Job K is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $5.45 per MH x (1,600 MHs + 3,000 MHs) = $5.45 per MH x (4,600 MHs) = $25,070 d. Job F’s manufacturing cost: Direct materials.................................. Direct labor cost................................. Manufacturing overhead applied....... Total manufacturing cost.................... $12,700 19,100 29,430 $61,230 e. Job K’s manufacturing cost: Direct materials.................................. Direct labor cost................................. Manufacturing overhead applied....... Total manufacturing cost.................... $6,400 7,900 25,070 $39,370 f. The selling price for Job F: Total manufacturing cost................ Markup (30%)................................ Selling price................................... g. The selling price for Job K: Total manufacturing cost................ Markup (30%)................................ Selling price................................... h. $61,230 18,369 $79,599 $39,370 11,811 $51,181 Total manufacturing cost assigned to Job F......... Total manufacturing cost assigned to Job K......... Cost of goods sold............................................... Difficulty: 2 Medium $61,230 39,370 $100,600 Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement [QUESTION] 261. Cardosa Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 70,000 machine-hours, total fixed manufacturing overhead cost of $308,000, and a variable manufacturing overhead rate of $2.10 per machine-hour. Job M556, which was for 50 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total machine-hours....................... Direct materials.............................. Direct labor cost............................. 100 $555 $2,700 Required: a. Calculate the total job cost for Job M556. b. Calculate the unit product cost for Job M556. Answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $308,000 + ($2.10 per machine-hour × 70,000 machine-hours) = $308,000 + $147,000 = $455,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $455,000 ÷ 70,000 machine-hours = $6.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $6.50 per machine-hour × 100 machine-hours = $650 Direct materials.................................. Direct labor........................................ Manufacturing overhead applied....... Total cost of Job M556....................... $555 2,700 650 $3,905 Total cost of Job M556 (a).................. Number of units (b)............................ Unit product cost (a) ÷ (b).................. Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement $3,905 50 $78.10 b. [QUESTION] 262. Dietzen Corporation has two manufacturing departments--Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Estimated total machine-hours (MHs)................................. Estimated total fixed manufacturing overhead cost............. Estimated variable manufacturing overhead cost per MH. . . Casting Finishing Total 4,000 6,000 10,000 $18,000 $18,000 $36,000 $1.50 $2.30 During the most recent month, the company started and completed two jobs--Job D and Job J. There were no beginning inventories. Data concerning those two jobs follow: Direct materials........................ Direct labor cost....................... Casting machine-hours............ Finishing machine-hours.......... Job D Job J $14,300 $6,800 $21,700 $8,800 2,700 1,300 2,400 3,600 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job D. b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job J. Answer: a. The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead.......................................................... Estimated variable manufacturing overhead ($1.50 per MH × 4,000 MHs)...... Estimated total manufacturing overhead cost................................................... $18,000 6,000 $24,000 Finishing Estimated fixed manufacturing overhead.......................................................... Estimated variable manufacturing overhead ($2.30 per MH × 6,000 MHs)...... Estimated total manufacturing overhead cost................................................... $18,000 13,800 $31,800 The second step is to combine the estimated manufacturing overhead costs in the two departments ($24,000 + $31,800 = $55,800) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost ....... Estimated total machine hours............................... Predetermined overhead rate................................ $55,800 10,000 MHs $5.58 per MH The overhead applied to Job D is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $5.58 per MH x (2,700 MHs + 2,400 MHs) = $5.58 per MH x (5,100 MHs) = $28,458 Job D’s manufacturing cost: Direct materials.................................. Direct labor cost................................. Manufacturing overhead applied....... Total manufacturing cost.................... $14,300 21,700 28,458 $64,458 b. The overhead applied to Job J is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $5.58 per MH x (1,300 MHs + 3,600 MHs) = $5.58 per MH x (4,900 MHs) = $27,342 Job J’s manufacturing cost: Direct materials.................................. Direct labor cost................................. Manufacturing overhead applied....... Total manufacturing cost.................... Difficulty: 2 Medium Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement $6,800 8,800 27,342 $42,942 [QUESTION] 263. Posson Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 20,000 machine-hours, total fixed manufacturing overhead cost of $130,000, and a variable manufacturing overhead rate of $3.00 per machine-hour. Job K789, which was for 10 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total machine-hours....................... Direct materials.............................. Direct labor cost............................. 30 $775 $1,170 Required: a. Calculate the predetermined overhead rate for the year. b. Calculate the amount of overhead applied to Job K789. c. Calculate the total job cost for Job K789. d. Calculate the unit product cost for Job K789. Answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $130,000 + ($3.00 per machine-hour × 20,000 machine-hours) = $130,000 + $60,000 = $190,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $190,000 ÷ 20,000 machine-hours = $9.50 per machine-hour b. Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $9.50 per machine-hour × 30 machine-hours = $285 c. Direct materials.................................. Direct labor........................................ Manufacturing overhead applied....... Total cost of Job K789....................... $775 1,170 285 $2,230 Total cost of Job K789 (a).................. Number of units (b)............................ Unit product cost (a) ÷ (b).................. Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking AICPA: FN Measurement $2,230 10 $223.00 d.