Operation CustinK, /ust-in Time System and Eackfhush Coding 7II. ExercisesPKercise I (Operation Costing)The Packo Company, a small manufacturer, makes a variety of toof boxesThe company's manufacturing operations and their costs for November wereCutting Assembly FinishingP16,50022.900P39.400Total23.90029.200PS3.100Direct manufacturing laborManufacturing overheadP2,6003.000P5,600P4,8003.300P&100Three styles of boxes were produced in November, The quantities and directmaterials costs wereCstrer unitStyleStandardQuantity1,200600Direct materialsP18,0006,6005,400P30,060HomeIndustrial2002052The company uses actual costing. It takes direct materials to cach style ofbox. It combines direct manufacturing labor and manufacturing overhead andallocates the conversion costs on the basis of all product units passingthrough an operation. All product units are assumed to receive an identicalamount of time and effort in cach operation. The industrial style, however,does not go through the finishing operation.Required:1. Tabulate the conversion costs of each operation, the total units produced,and the conversion costs per unit for November.2. Calculate the total costs and the cost per unit of each style of boxproduced in November. Be sure to account for all the total costs.3. Prepare summary journal entries for each operation. For simplicity,assume that all direct materials are introduced at the beginning of thecutting operation. Also, assume that all units were transferred to finishedgoods when completed and that there was no beginning or ending workin process. Prepare one summary entry for all conversion costs incurred,but prepare a separate entry for allocating conversion costs in eachoperation. The Lim Company has a plant that manufacturers transistor radios. Thetime production system and a backflush costing system with two trigger270 Chapter 8Exercise 2 (Backflush journal entries and JIT production)production time is only a few minutes per unit. The company uses ajust-in-points for journal entries:Purchase of direct (raw) materialsCompletion of good finished units of productThere are no beginning inventories. The following data pertain to Aprilmanufacturing:Direct (raw) materials purchasedDirect (raw) materials usedConversion costs incurredAllocation of conversion costsCosts transferred to finished goodsCost of goods soldP8,800,0008,500,0004,220,0004,000,00012,500,00011,900,000Required:1. Prepare summary journal entries for April (without disposing of under-or overallocated conversion costs). Assume no direct materials variances.2. Post the entries in requirement I to T-accounts for applicable InventoryControl, Conversion Costs Control, Conversion Costs Allocated and Costof Goods Sold.3. Under an ideal JIT production system, how would the amounts in yourjournal entries differ from those in requirement 1?Exercise 3 (JIT purchasing, choosing suppliers)The Donnie Corporation and the Thea Corporation manufacture fairly similarremote-controlled toy cars. The Tristan Corporation, a retailer of children'stoys, expects to buy and sell 4,000 of these cars each year. Both Donnie and.Thea can supply all of Tristan's needs, and Tristan prefers to use only onsupplier for these cars. An electronic hookup will make ordering costsnegligible for either supplier. Tristan wants 80 cars delivered 50 times eachyear. Tristan obtains the following additional information..

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Efercise I (Operation Costing) The Packo Company, a small manufacturer, makes a variety of toof boxes The company's manufacturing operations and their costs for November were Cutting Assembly Finishing P2,600 Direct manufacturing labor Manufacturing overhead Total P4,800 P23 900 3,300 P16,500 3.000 22.900 29.200 P&100 PS100 P5,600 P39.400 Three styles of boxes were produced in November, The quantities and direct materials costs were Cstrer unit Quantity 1,200 600 Direct materials Style Standard P18,000 6,600 5,400 P30,060 Home Industrial 200 The company uses actual costing. It takes direct materials to cach style of box. It combines direct manufacturing labor and manufacturing overhead and allocates the conversion costs on the basis of all product units passing through an operation. All product units are assumed to receive an identical amount of time and effort in cach operation. The industrial style, however, does not go through the finishing operation. Required: 1. Tabulate the conversion costs of each operation, the total units produced, and the conversion costs per unit for November. 2. Calculate the total costs and the cost per unit of each style of box produced in November. Be sure to account for all the total costs. 3. Prepare summary journal entries for each operation. For simplicity, assume that all direct materials are introduced at the beginning of the cutting operation. Also, assume that all units were transferred to finished goods when completed and that there was no beginning or ending work in process. Prepare one summary entry for all conversion costs incurred, but prepare a separate entry for allocating conversion costs in each operation.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q