The Devon Motor Company produces automobiles. On April 1st the company had no beginning inventories and it purchased 5,630batteries at a cost of $60 per battery. It withdrew 5,200 batteries from the storeroom during the month. Of these, 100 were used toreplace batteries in cars being used by the company's traveling sales staff The remaining 5,100 batteries withdrawn from thestoreroom were placed in cars being produced by the company. Of the cars in production during April, 90 percent were completedand transferred from work in process to finished goods. Of the cars completed during the month, 30 percent were unsold at April 30th.Required:1. Determine the cost of batteries that would appear in each of the following accounts on April 30th.Name of the AccountCost1aRaw Materials25,800Work in Process30,60082.620192,7801b1cFinished GoodsCost of Goods SoldSeling Expense1d1e6.000

Process costing: Process costing is included costs like labor, material, and overhead which…

Answered: The Devon Motor Company produces…

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 industrial company "ZONES S.A." manufactures leather belts to order from its customers. The last quarter of 2012 was entirely occupied with the execution of order 135. The order concerned theconstruction of 1,000 zones. According to the technical specifications set by the customer, each belt requires 200 grams of leather and 50 grams of metal parts. Additional information is provided: At the beginning of the quarter the company had no opening stock of 'A' materials. Both the leather and the metal components are considered as Inmaterials. Purchased on credit 300 kg of leather for €4,500 and 100 kg of metal parts for €6,000. The net (after deductions) hourly wage of the workers is equal to €8 and 2,000 direct labor hours were used to complete order 135.Deductions represent 20% and employer contributions 10% of the nominal hourly wage. The salaries for the quarter were paid as usual. Paid for rents €3,000 and for factory insurance premiums €5,000. Rents and insurance premiums are…
Hoffman Industries manufactures a popular interactive stuffed animal for children that requires two computer chips inside each toy. The company pays $1 for each computer chip. To help to guard against stockouts of the computer chip, Hoffman Industries has a policy that states that the ending inventory of computer chips should be at least 30% of the following month's production needs. The production schedule for the first four months of the year is as follows: Stuffed animals to be produced January. . . . . 5,600 February. . . . 4,100 March. . . . . 4,900 April. . . . . . . 4,800 Requirement: Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget. Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget. Hoffman Industries Direct Materials Budget For the Months of…
Rubble, Inc. produced 1,100 backpacks, the company's product in 2020. The standard cost was 4 yards of cloth at a standard cost of $0.90 per yard. The accounting records show that 2,700 yards of cloth were used, and the company paid $1.15 per yard. Standard time to make the backpacks was 2 direct labor hours per unit at a standard rate of $9.80 per direct labor hours. Employees worked a total of 1,500 hours and were paid $9.15 per hour.Calculate the direct labor cost variance.
Rubble, Inc. produced 1,100 backpacks, the company's product in 2020. The standard cost was 4 yards of cloth at a standard cost of $0.90 per yard. The accounting records show that 2,700 yards of cloth were used, and the company paid $1.15 per yard. Standard time to make the backpacks was 2 direct labor hours per unit at a standard rate of $9.80 per direct labor hours. Employees worked a total of 1,500 hours and were paid $9.15 per hour.Calculate the direct labor cost variance.
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Montrose Instrumentation produces measurement equipment. One component, used in a variety of the company's products, is critical and the supply chain often breaks. For that reason, Montrose has a policy to hold in inventory enough of the component to produce three month's worth of sales (one component is used in each unit of product in which it is used). On February 1, the company has 31,000 components in stock. Sales of the units in which the component is used in each of the next six months are estimated to be as follows: February 32,500 March 26,500 April 28,000 May 33,550 June 30,150 July 42,110 Parts are purchased at a wholesale price of $46. The vendor has a financing arrangement by which Montrose pays 40 percent of the purchase price in the month when the components are delivered and 60 percent in the following month. Montrose purchased 38,000 parts in January. Required: Estimate purchases of the component (in units) for February and March. Estimate the cash…
The Devon Motor Company produces automobiles. On April 1, the company had no beginning inventories, and it purchased 7,060 batteries at a cost of $130 per battery. It withdrew 6,500 batteries from the storeroom during the month. Of these, 100 were used to replace batteries in cars used by the company's traveling sales staff. The remaining 6,400 batteries withdrawn from the storeroom were placed in cars being produced by the company. Of the cars in production during April, 90 percent were completed and transferred from work in process to finished goods. Of the cars completed during the month, 30 percent were unsold at April 30. Required: 1. and 2. Determine the cost of batteries appearing in each of the following accounts on April 30 and select whether each of the accounts would appear on the balance sheet or on the income statement. Name of the Account Cost Appears on: Raw Materials $ 560 Balance Sheet Work in Process Finished Goods Cost of Goods Sold Selling Expense
Harold Manufacturing produces denim clothing. This year, it produced 5,280 denim jackets at a manufacturing cost of $41.00 each. These jackets were damaged in the warehouse during storage. Management investigated the matter and identified three alternatives for these jackets. 1. Jackets can be sold to a secondhand clothing shop for $7.00 each. 2. Jackets can be disassembled at a cost of $32,800 and sold to a recycler for $11.00 each. 3. Jackets can be reworked and turned into good jackets. However, with the damage, management estimates it will be able to assemble the good parts of the 5,280 jackets into only 3,050 jackets. The remaining pieces of fabric will be discarded. The cost of reworking the jackets will be $101,400, but the jackets can then be sold for their regular price of $41.00 each. Required: 1. Calculate the incremental income. Incremental revenue Incremental costs Incremental income Alternative 1 Sell to a second- hand shop Alternative 2 Disassemble and sell to a recycler…
World Strings produces student-grade violins for beginning violin students. The company produced 2,700 violins in its first month of operations. At month end, 800 finished violins remained unsold. There was no inventory in work in process. Violins were sold for $120.00 each. Total costs from the month are as follows: The table shows the following data with cost in dollars: Direct materials used - 120,300 Direct labor - 65,000 Variable manufacturing overhead - 28,000 Fixed manufacturing overhead - 64,800 Variable selling and administrative expenses - 10,000 Fixed selling and administrative expenses - 12,900 437 The company prepares traditional (absorption costing) income statements for its bankers. World Strings would also like to prepare contribution margin income statements for management use. Compute the following amounts that would be shown on these income statements: 1. Gross profit 2. Contribution margin 3. Total expenses shown below the gross profit line 4. Total expenses…
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Bell Company, a manufacturer of audio systems, started its production in October 2017. For the preceding 3 years, Bell had been a retailer of audio systems. After a thorough survey of audio system markets, Bell decided to turn its retail store into an audio equipment factory.Raw materials cost for an audio system will total $75 per unit. Workers on the production lines are on average paid $15 per hour. An audio system usually takes 7 hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $5,120 per month. Indirect materials cost $6 per system. A supervisor was hired to oversee production; her monthly salary is $3,840.Factory janitorial costs are $1,410 monthly. Advertising costs for the audio system will be $8,750 per month. The factory building depreciation expense is $7,200 per year. Property taxes on the factory building will be $9,000 per year. Assuming that Bell manufactures, on average, 1,520 audio systems per month, enter…

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