1. Should EcoScape use process costing or job-order costing?Job-order costing2. If EcoScape uses a normal costing system and overhead is applied on the basis of direct labor hours,What is the overhead rate? Round your answer to the nearest cent.per direct labor hourWhat is the average actual wage rate?per direct labor hourWhat is the cost of an installation that takes $3,650 of direct materials and 20 direct labor hours? Characteristics of Production Process, Cost MeasurementVince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different,requiring different materials and labor for installing the systems. EcoScape estimated the following for the year:Number of direct labor hours6,530Direct labor cost$65,300Overhead cost$50,281During the year, the following actual amounts were experienced:Number of direct labor hours6,145Direct labor incurred$67,595Overhead incurred$52,152.62

The pre determined overhead rate is calculated as estimated overhead cost divided by estimated base…

Answered: 2. If EcoScape uses a normal costing…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Thank you for the help, I have two follow up questions regarding this, -First question is 3. Calculation of cost per equivalent units in ( converstion) beginning Work in the process should it be 654,800 instead of 327,400 becuase converstion costs = direct labor + overhead and in this case it would be 327,400 + 100% * 327,400 = 654,800? and Cost incurred during the period for conversation cost = Direct labor cost + overhead cost = 7,207,400 + (100% * 7,207,400) = 14,414,800? -Second question is 5. Calculation of Cost of units Completed and Transferred out (Finished Goods) for December 31, 20x1, should it we use Equivalent Units (A) 1,134,000 units instead of 2,700,000 becuase we are preparing a schedule of December 31?
Cantrall Company is trying to decide which product to manufacture. Expected direct materials costs are $4.00 per unit for each product. The expected direct labor costs are $2.00 per unit for one product and $4.00 per unit for another product. In choosing between the two products, the direct materials costs are A) relevant; irrelevant B) irrelevant; relevant C) relevant; relevant D) irrelevant; irrelevant and the direct labor costs are
13. If Job Q includes 30 units, what is its unit product cost? 14. Assume that Sweeten Company uses cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. If Job P includes 20 units and Job Q includes 30 units, what selling price would the company establish for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis? 15. What is Sweeten Company’s cost of goods sold for the year?
Helpful Division of X Company makes two products, Small and Large. The company has always used Conventional Costing (for financial reporting purposes), but this period wants to try using Activity-Based Costing to make better decisions. Information related to the current period is as follows: REQUIRED: (#1) Since the company has three activities, what are the three overhead application rates the company would use for activity-based costing? (ROUND EACH RATE TO THE NEAREST CENT and be sure to label the rates appropriately.) (#2) Using activity-based costing, what was the cost to manufacture one Small unit? (#3) Using activity-based costing, what was the cost to manufacture one Large unit? (#4) Based on what you learned about activity-based costing this week, how might Helpful Division managers use the new cost information from its activity-based costing system to better manage its operations? Helpful Resource: https://www.youtube.com/watch?v=PU3U_aMbKws
Required: 1. Using the five most expensive activities, calculate the overhead cost assigned to each prod-uct. Assume that the costs of the other activities are assigned in proportion to the cost of the five activities.2. Calculate the error relative to the fully specified ABC product cost and comment on the outcome.3. What if activities 1, 2, 5, and 8 each had a cost of $650,000 and the remaining activities hada cost of $50,000? Calculate the cost assigned to Wafer A by a fully specified ABC systemand then by an approximately relevant ABC approach. Comment on the implications forthe approximately relevant approach.
A. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? B. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product?
The JAG Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. JAG Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation. The following are data from the most recent periods: Cost Hours $25,000 5,025 25,100 4,000 34,000 7,515 60,370 15,500 38,000 9.500 Required: (a) Using the high-low method, estimate the cost function. Round to two decimal places. Show work to receive partial credit!! (b) Calculate the estimated total costs at an operating level of 6,000 hours. Show work to receive partial credit!!!
1. Top-down versus bottom-up estimates. pts. a. Describe the methods and uses of each of the approaches. 2. Compare the advantages and disadvantages of each of the approaches. 3. What are the three types of costs discussed in the text? Define them. 4. For a small project requiring 120 hours at $50/hr and having a direct overhead rate of 40%, calculate the direct cost (Exercise 1 in Chapter 5). To that add indirect costs (G&A) at 20% and then profit at 20% for a total project price. What are the estimated costs for: Design Programming In-house testing Which “approach to estimating” is this? What weaknesses are inherent in this approach? 5. Take another look at Exercise #5. Use Exercise Figure 5.1 on page 160. But now you are asked to do a bottom-up estimate based on the following data and compare it with the top-down estimate of $800,000. If confronted with these two estimates, what, if any, actions would you take? Deliverables Estimated Hours Rate:…
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Determine fixed and variable costs using the high-low method and prepare graph. E2.26 (LO 3) The controller of Furgee Industries has collected the following monthly expense data for use in analyzing the cost behaviour of maintenance costs. Total Maintenance Costs Total Machine Hours Month January February March April May June $2,500 3,000 3,600 4,500 3,200 4,900 300 350 500 690 400 700 Instructions a. Determine the fixed and variable cost components using the high-low method. b. Prepare a graph showing the behaviour of maintenance costs, and identify the fixed and variable cost components. Use 100-hour increments and $1,000 cost increments.
An operations manager is deciding on the level of automation for a new process. The fixed cost for automation includes the equipment purchase price, installation, and initial spare parts. The variable costs per unit for each level of automation are primarily labor related. Each unit can be sold for $81. As in many cases, you have the default alternative of doing nothing ($0 fixed cost, $0 variable costs). Hint: For these questions, also consider the “Do Nothing” option as a viable option when making your decision. Alternative Fixed Costs Variable Costs per Unit A $100,000 $54 B $272,000 $31 C $560,000 $20 Recommended: graph each alternative with units on the x-axis and $ on the y-axis. Also, include revenue on the chart. Identify the break-even points and points of indifference.

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