Product costing-manufacturing overhead [LO 5] Winners, Inc.,manufactures women’s boating shoes. Manufacturing overhead is assigned toproduction on a machine-hour basis. For 2010, it was estimated thatmanufacturing overhead would total $353,730 and that 29,460 machine hourswould be used. Required: (a) Calculate thepredetermined overhead application rate that will be used for absorptioncosting purposes during 2010. (Round youranswer to 2 decimal places. Omit the “$” sign in your response.) Predeterminedoverhead application rate $ (b) During May, 3,700pairs of shoes were made. Raw materials costing $6,770 were used, and directlabor costs totaled $9,350. A total of 770 machine hours were worked duringthe month of May. Calculate the cost per pair of shoes made during May. (Round your intermediate calculations and final answerto 2 decimal places. Omit the “$” sign in your response.) Costper pair of shoes $ (c) At the end of May,1,310 pairs of shoes were in ending inventory. Calculate the cost of theending inventory and the cost of the shoes sold during May. (Round your intermediate calculations and final answerto 2 decimal places. Omit the “$” sign in your response.) Costof shoes in inventory $ Costof shoes sold $ 3. P13-22 Cost of goods manufactured, cost of goods sold, andincome statement [LO 4, 5, 7] BigThunder Co. incurred the following costs during April: Rawmaterials purchased $ 40,130 Directlabor ($13 per hour) 56,810 Manufacturingoverhead (actual) 90,440 Sellingexpenses 31,560 Administrativeexpenses 14,490 Interestexpense 6,455 Manufacturingoverhead is applied on the basis of $22 per direct labor hour. Assume thatoverapplied or underapplied overhead is transferred to cost of goods soldonly at the end of the year. During the month, 4,060 units of product weremanufactured and 4,420 units of product were sold. On April 1 and April 30,Big Thunder Co. carried the following inventory balances: April 1 April 30 Rawmaterials $ 19,200 $ 17,700 Workin process 52,800 56,600 Finishedgoods 41,800 24,884 Requirement1: (a) Prepare a statementof cost of goods manufactured for the month of April. (Amounts to be deducted should be indicated with minussign. Omit the “$” sign in your response.) BigThunder Co.Statement of Cost of Goods ManufacturedFor the month of April Rawmaterials: (Click toselect)Work-in-process, April 1Direct labor cost incurredManufacturingoverhead appliedInventory, April 30Inventory, April 1 $ (Click to select)Inventory,April 30Manufacturing overhead appliedWork-in-process, April 1Purchasesduring AprilDirect labor cost incurred Rawmaterials available for use (Click to select)Less:Inventory, April 30Add: Work-in-process, April 1Add: Inventory, April30Direct labor cost incurredLess: Work-in-process, April 30 Costof raw materials used $ (Click toselect)Purchases during AprilAdd: Work-in-process, April 1Inventory, April1Direct labor cost incurredLess: Work-in-process, April 30 (Click toselect)Purchases during AprilLess: Work-in-process, April 30Manufacturingoverhead appliedInventory, April 1Add: Work-in-process, April 1 Totalmanufacturing costs, April $ (Click to select)Add:Work-in-process, April 1Less: Inventory, April 30Inventory, April 1Purchasesduring AprilLess: Work-in-process, April 1 (Click to select)Less:Inventory, April 30Inventory, April 1Add: Work-in-process, April 30Less:Work-in-process, April 30Purchases during April Costof goods manufactured, April $ (b) Calculate theaverage cost per unit of product manufactured. (Roundyour answer to 2 decimal places. Omit the “$” sign in yourresponse.) Costper unit $ Requirement2: Calculatethe cost of goods sold during April. (Do notround your intermediate calculations. Round your answer to the nearest dollaramount. Omit the “$” sign in your response.) Costof goods sold $ Requirement3: (a) Calculate thedifference between cost of goods manufactured and cost of goods sold. (Do not round your intermediate calculations. Roundyour answer to the nearest dollar amount. Input the amount as positive value.Omit the “$” sign in your response.) Difference $ (b) Howwill this amount be reported in the financial statements? (Clickto select)The difference between cost of goods manufactured and cost of goodssold is in the finished goods inventory account on the balance sheet.Thedifference between cost of goods manufactured and cost of goods sold is inthe work in progress account on the balance sheet.The difference between costof goods manufactured and cost of goods sold is in the raw material accounton the balance sheet. Requirement4: Prepare atraditional (absorption) income statement for Big Thunder Co. for the monthof April. Assume that sales for the month were $284,500 and the company’seffective income tax rate was 40%. (Amounts tobe deducted should be indicated with minus sign. Do not round yourintermediate calculations. Round your answer to the nearest dollar amount.Omit the “$” sign in your response.)
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Product costing-manufacturing
Winners, Inc.,
manufactures women’s boating shoes. Manufacturing overhead is assigned to
production on a machine-hour basis. For 2010, it was estimated that
manufacturing overhead would total $353,730 and that 29,460 machine hours
would be used.
Required:
(a)
Calculate the
predetermined overhead application rate that will be used for absorption
costing purposes during 2010. (Round your
answer to 2 decimal places. Omit the “$” sign in your response.)
Predetermined
overhead application rate
$
(b)
During May, 3,700
pairs of shoes were made. Raw materials costing $6,770 were used, and direct
labor costs totaled $9,350. A total of 770 machine hours were worked during
the month of May. Calculate the cost per pair of shoes made during May. (Round your intermediate calculations and final answer
to 2 decimal places. Omit the “$” sign in your response.)
Cost
per pair of shoes
$
(c)
At the end of May,
1,310 pairs of shoes were in ending inventory. Calculate the cost of the
ending inventory and the cost of the shoes sold during May. (Round your intermediate calculations and final answer
to 2 decimal places. Omit the “$” sign in your response.)
Cost
of shoes in inventory
$
Cost
of shoes sold
$
3.
P13-22 Cost of goods
income statement [LO 4, 5, 7]
Big
Thunder Co. incurred the following costs during April:
Raw
materials purchased
$
40,130
Direct
labor ($13 per hour)
56,810
Manufacturing
overhead (actual)
90,440
Selling
expenses
31,560
Administrative
expenses
14,490
Interest
expense
6,455
Manufacturing
overhead is applied on the basis of $22 per direct labor hour. Assume that
overapplied or underapplied overhead is transferred to cost of goods sold
only at the end of the year. During the month, 4,060 units of product were
manufactured and 4,420 units of product were sold. On April 1 and April 30,
Big Thunder Co. carried the following inventory balances:
April 1
April 30
Raw
materials
$
19,200
$
17,700
Work
in process
52,800
56,600
Finished
goods
41,800
24,884
Requirement
1:
(a)
Prepare a statement
of cost of goods manufactured for the month of April. (Amounts to be deducted should be indicated with minus
sign. Omit the “$” sign in your response.)
BigThunder Co.
Statement of Cost of Goods Manufactured
For the month of April
Raw
materials:
(Click to
select)Work-in-process, April 1Direct labor cost incurredManufacturing
overhead appliedInventory, April 30Inventory, April 1
$
(Click to select)Inventory,
April 30Manufacturing overhead appliedWork-in-process, April 1Purchases
during AprilDirect labor cost incurred
Raw
materials available for use
(Click to select)Less:
Inventory, April 30Add: Work-in-process, April 1Add: Inventory, April
30Direct labor cost incurredLess: Work-in-process, April 30
Cost
of raw materials used
$
(Click to
select)Purchases during AprilAdd: Work-in-process, April 1Inventory, April
1Direct labor cost incurredLess: Work-in-process, April 30
(Click to
select)Purchases during AprilLess: Work-in-process, April 30Manufacturing
overhead appliedInventory, April 1Add: Work-in-process, April 1
Total
manufacturing costs, April
$
(Click to select)Add:
Work-in-process, April 1Less: Inventory, April 30Inventory, April 1Purchases
during AprilLess: Work-in-process, April 1
(Click to select)Less:
Inventory, April 30Inventory, April 1Add: Work-in-process, April 30Less:
Work-in-process, April 30Purchases during April
Cost
of goods manufactured, April
$
(b)
Calculate the
average cost per unit of product manufactured. (Round
your answer to 2 decimal places. Omit the “$” sign in your
response.)
Cost
per unit
$
Requirement
2:
Calculate
the cost of goods sold during April. (Do not
round your intermediate calculations. Round your answer to the nearest dollar
amount. Omit the “$” sign in your response.)
Cost
of goods sold
$
Requirement
3:
(a)
Calculate the
difference between cost of goods manufactured and cost of goods sold. (Do not round your intermediate calculations. Round
your answer to the nearest dollar amount. Input the amount as positive value.
Omit the “$” sign in your response.)
Difference
$
(b)
How
will this amount be reported in the financial statements?
(Click
to select)The difference between cost of goods manufactured and cost of goods
sold is in the finished goods inventory account on the
difference between cost of goods manufactured and cost of goods sold is in
the work in progress account on the balance sheet.The difference between cost
of goods manufactured and cost of goods sold is in the raw material account
on the balance sheet.
Requirement
4:
Prepare a
traditional (absorption) income statement for Big Thunder Co. for the month
of April. Assume that sales for the month were $284,500 and the company’s
effective income tax rate was 40%. (Amounts to
be deducted should be indicated with minus sign. Do not round your
intermediate calculations. Round your answer to the nearest dollar amount.
Omit the “$” sign in your response.)
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 6 images
