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- Download: http://solutionzip.com/downloads/cost-accounting/
- 1. The following information pertains to Skandalis Company’s production of one unit of
- its manufactured product during the month of June:
- Standard quantity of materials 10 pounds
- Standard cost per pound $0.75
- Standard direct labor hours 0.50
- Standard wage rate per hour $10.00
- Materials purchased 200,000 pounds
- Cost of materials purchased $0.72 per pound
- Materials Consumed for manufacture of 10,000 units 112,000 pounds
- Actual direct labor hours required for 10,000 units 4,600
- Actual direct labor cost per hour $10.20
- The materials price variance is recognized when materials are purchased.
- a. Compute the materials price and quantity variances.
- b. Compute the labor rate and efficiency variances.
- c. Indicate whether each of the above variances is favorable or unfavorable
- 2. Dye and Dye, Attorneys-at-Law, each bill 1,500 hours per year and receive pay of $100,000. Four paralegals work 2,000 hours each for the firm and receive annual pay of $32,500. Overhead of $396,000 is anticipated, of which $204,000 is attorney support and the rest is paralegal support.
- Determine the overhead application rate under each of the following circumstances:
- a. A simplified cost approach is used based on hours.
- b. A simplified cost approach is used based on payroll dollars.
- c. An activity-based cost approach is used. Attorney support is based on labor costs,
- and paralegal support is based on hours worked
- 3.The following accounts are maintained by the Riverside Manufacturing Company in its general ledger: Materials, Work in Process, Factory Overhead, and Accounts Payable. The materials account had a debit balance of $40,000 on November 1.
- A summary of material transactions for November shows the following transactions:
- (1) Materials acquired on account, $62,000
- (2) Direct materials issued, $58,500
- (3) Direct materials returned to storeroom, $1,200
- (4) Indirect materials issued, $3,600
- (5) Indirect materials returned to storeroom, $550
- (6) Materials on hand were $200 less than the company’s ledger balance.
- a. Prepare journal entries to record these transactions.
- b. Post the journal entries to T-accounts.
- c. Determine the balance of the materials account on November 30.
- Answer 4-8 in Two to Four sentence.
- 4. Under a process cost system, why is it necessary to estimate the stage or degree of completion of work in process at the end of the accounting period?
- 5. An employee who manufactures goods for her employer earns $12 an hour for regular wages. He’s paid time and a half for all hours worked in excess of 40 hours per week. In a recent week, she worked 50 hours.
- a. How much of her gross pay that week was direct labor?
- b. How much was indirect labor?
- 6. A company has $80,000 in fixed costs and makes one product with a selling price of $20 per unit. If variable costs are $10 per unit, what is the break-even sales volume in units?
- Download: http://solutionzip.com/downloads/cost-accounting/
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