Shannon Sharpe owns and operates three Frazer Speedo outlets in Columbus, OH. Frazer Speedo is an oil and lubrication service outlet - one ofmany outlets popular throughout the Midwest. The Frazer Speedo outlets also change transmission and power steering fluids. In May, purchasesof materials equaled $80,000, the beginning inventory of materials was $47,300, and the ending inventory of materials was $15,250. Payments todirect labor during the month totaled $63,000. Overhead incurred was $110,000. The Columbus outlet also spent $5,000 on advertising during themonth. A franchise fee of $2,000 per outlet is paid every month. Revenues for May were $400,000What is the Prime Cost for May ?O $80,000O $143,000$175,050O $110,000

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Answered: Shannon Sharpe owns and operates three…

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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The following transactions were incurred by Augustine Fabricators during January, the first month of its fiscal year. Requirements: Record the proper journal entry for each transaction. $205,000 of materials was purchased on account. $158,000 of materials was used in production; of this amount, $155,000 was used on specific jobs. Manufacturing labor and salaries for the month totaled $250,000. $215,000 of the total manufacturing labor and salaries was traced to specific jobs, and the remainder was indirect labor used in the factory. The company recorded $19,000 of depreciation on the plant and plant equipment. The company also received a plant utility bill for $10,000 which will be paid at a later date. $62,000 of manufacturing overhead was allocated to specific jobs. By the end of January, was manufacturing overhead overallocated or underallocated? By how much?
Jabari Steel Company has two departments, Casting and Rolling. In the Rolling Department, ingots from the Casting Department are rolled into steel sheet. The Rolling Department received 16,000 tons from the Casting Department in October. During October, the Rolling Department completed 15,600 tons, including 800 tons of work in process on October 1. The ending work in process inventory on October 31 was 1,200 tons. How many tons were started and completed during October? fill in the blank 1 of 1 tons
Kenos Pte Ltd manufactures all types of custom-made furniture. It uses a job-costing system and applies manufacturing overhead on the basis of machine hours. The company's manufacturing overhead budget for the year totalled $2,400,000. It has a maximum capacity of 320,000 machine hours. However, it is budgeted to be able to use 75% of this capacity during this period. On 31 July, Kenos Pte Ltd has the following balances: Work in process inventory -Job 123 -Job 124 Raw materials inventory $13,360 Finished inventory -Job 122 In August, the following occurred: $18,000 $8,620 (i)Raw materials purchased on credit (ii) Raw materials requisitions $23,000 (v) (vi) Job number 123 124 125 Indirect labour -Job number 123 -Job number 124 -Job number 125 -Indirect materials (used in production) (iii)Machine hours, direct labour hours and wages for factory employees (iv)Other overhead incurred: Required: (0) (ii) Depreciation (machineries) Depreciation (delivery vans) Machine hours Labour hours…
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McCourt Company produces small engines for lawnmower producers. The accounts payable department at McCourt has 10 clerks who process and pay supplier invoices. The total cost of their salaries is $450,000. The work distribution for the activities that they perform is as follows: Activity Percentage of Time on Each Activity Comparing source documents 10 % Resolving discrepancies 55 % Processing payment 35 % Required: Assign the cost of labor to each of the three activities in the accounts payable department. Round your answers to the nearest dollar. Activity Cost Assignment Comparing source documents Sfill in the blank 1 Resolving discrepancies $fill in the blank 2 Processing payment Sfill in the blank 3 Comparing source documents Resolving discrepancies Processing payment
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Logistics Solutions maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 125,000 items were shipped to customers using 4,400 direct labor-hours. The company incurred a total of $12,540 in variable overhead costs. According to the company's standards, 0.04 direct labor-hour is required to fulfill an order for one item and the variable overhead rate is $2.90 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 125,000 items to customers? 2. What is the standard variable overhead cost allowed (SH × SR) to ship 125,000 items to customers? 3. What is the variable overhead spending variance? 4. What are the variable overhead rate variance and the variable…
Gibson Manufacturing Co. expects to make 30,800 chairs during the year 1 accounting period. The company made 3,300 chairs in January. Materials and labor costs for January were $17,800 and $24,500, respectively. Gibson produced 1,400 chairs in February. Material and labor costs for February were $9,400 and $12,900, respectively. The company paid the $770,000 annual rental fee on its manufacturing facility on January 1, year 1. The rental fee is allocated based on the total estimated number of units to be produced during the year. Required Assuming that Gibson desires to sell its chairs for cost plus 25 percent of cost, what price should be charged for the chairs produced in January and February? (Round intermediate calculations and final answers to 2 decimal places.)
Logistics Solutions maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 145,000 items were shipped to customers using 5,600 direct labor-hours. The company incurred a total of $17,080 in variable overhead costs. According to the company's standards, 0.04 direct labor-hour is required to fulfill an order for one item and the variable overhead rate is $3.10 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 145,000 items to customers? 2. What is the standard variable overhead cost allowed (SH x SR) to ship 145,000 items to customers? 3. What is the variable overhead spending variance? 4. What are the variable overhead rate variance and the variable…
Rehan Corporation has provided data concerning its operations for August. The beginning balance in the raw materials account was Rs. 50,000 and the ending balance was Rs. 65,000. Raw materials purchases during the month totaled Rs. 90,000. Manufacturing overhead cost incurred during the month was Rs. 100,000, of which Rs. 8,000 consisted of raw materials classified as indirect materials. The direct materials cost for August was:
Sinkoe’s Optometry Center purchases all raw materials (e.g. lenses, frames, etc.) on credit. During June, these purchases totalled P 8,700. Labor and actual overhead during June totalled P 24,000 and P 35,000, respectively. In addition to the labor cost, the applied conversion cost included an added P 38,000. All of the eyeglasses worked on during the month were completed and sold on credit for a total of P 80,000. Requirements: Record these transactions (including any closing entries) into T-accounts, assuming a traditional costing. Record these transactions (including any closing entries) into T-accounts, assuming a JIT cost system.

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