Wixis Cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods. The company uses a job-order costing system. The capacity of the plant is determined by the capacity of its constraint, which is time on the automated bandsaw that makes finely beveled cuts in wood according to the preprogrammed specifications of each cabinet. The bandsaw can operate up to 187 hours per month. The estimated total manufacturing overhead cost at capacity is $15.521 per month. The company bases its predetermined overhead rate on capacity, so its predetermined overhead rate is $83 per hour of bandsaw use. The results of a recent month's operations appear below: Sales Beginning inventories Ending inventories Direct materials Direct labor Manufacturing overhead incurred i Selling and administrative expense Actual hours of bandsaw use $43,740 50 50 $5,340 $8,800 $ 14,300 $8,180 157 Required: 1-a. Prepare an income statement for the month. Your income statement should include the cost of unused capacity as a period expense. 1-b. What was the cost of unused capacity during the month?

Wixis Cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods. The company uses a job-order costing system. The capacity of the plant is determined by the capacity of its constraint, which is time on the automated bandsaw that makes finely beveled cuts in wood according to the preprogrammed specifications of each cabinet. The bandsaw can operate up to 187 hours per month. The estimated total manufacturing overhead cost at capacity is $15.521 per month. The company bases its predetermined overhead rate on capacity, so its predetermined overhead rate is $83 per hour of bandsaw use. The results of a recent month's operations appear below: Sales Beginning inventories Ending inventories Direct materials Direct labor Manufacturing overhead incurred i Selling and administrative expense Actual hours of bandsaw use $43,740 50 50 $5,340 $8,800 $ 14,300 $8,180 157 Required: 1-a. Prepare an income statement for the month. Your income statement should include the cost of unused capacity as a period expense. 1-b. What was the cost of unused capacity during the month?

Name: Wixis Cabinets makes custom wooden cabinets for high-end stereo syste
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: Wixis Cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods. The company uses a job-ordercosting system. The capacity of the plant is determined by the capacity of its constraint, which is time on the automated bands

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Haresh
For Reel, Inc. is a manufacturer of fishing rods. The company produces the rods in small batches. At the beginning of the year, For Reel estimated total manufacturing overhead of $24,200, total direct labor hours of 2,000 and total machine hours of 1,000. The company uses a traditional, normal costing system and allocates manufacturing overhead to production using the most appropriate allocation base for its highly automated manufacturing environment. During January, For Reel started and finished Job Allatoona. The job consisted of 10 identical fishing rods sold at a sales price of $500 per rod. A total of $1,500 in direct materials were requisitioned for the job during the month. Direct laborers were paid at a rate of $22 per direct labor hour and were paid $132 in total for work performed on the job. The job required 3.0 hours of machine time. Assuming 4 of the rods were sold during January, what is the total gross profit reported on the job during the month?
Helix Company produces costumes used in the television and movie industries. Recently the company received an ongoing order for Samurai robes to be worn in an upcoming Japanese historical action series made for television. The company uses a standard costing system to assist in the control of costs. According to the standards set for these robes, the factory has a denominator activity level of 780 direct labour-hours each month, which should result in the production of 1,950 robes. The standard costs associated with this level of production are as follows: Per Unit Direct materials Total $ 35,490 of Product $18.20 Direct labour $ 7,020 3.60 Variable manufacturing overhead* Fixed manufacturing overhead* $ 2,340 1.20 $ 4,680 2.40 $25.40 *Based on direct labour-hours During April, the factory worked only 760 direct labour-hours and produced 2,000 robes. The following actual costs were recorded during the month: Per Unit of Direct materials (6,000 metres) Direct labour Total $ 36,000…
The Gilster Company, a machine tooling firm, has several plants. One plant, located in St. Cloud, Minnesota, uses a job order costing system for its batch production processes. The St. Cloud plant has two departments through which most jobs pass. Plant-wide overhead, which includes the plant manager’s salary, accounting personnel, cafeteria, and human resources, is budgeted at $250,000. During the past year, actual plantwide overhead was $230,000. Each department’s overhead consists primarily of depreciation and other machine-related expenses. Selected budgeted and actual data from the St. Cloud plant for the past year are as follows. Department A Department B Budgeted department overhead (excludes plantwide overhead) $ 108,000 $ 329,000 Actual department overhead 120,000 344,000 Expected total activity: Direct labor hours 44,000 10,000 Machine-hours 18,000 47,000 Actual activity:…
One Stop Invitations & More does customize, hand-crafted wedding memorabilia, in which each batch of items is a job. The company has a highly labour-intensive production process, so it allocates manufacturingoverhead based on direct labour hours. The business expects to incur $2,400,000 of manufacturing overhead costs and to use 40,000 direct labour hours during 20X9. At the end of May June 20X9, One Stop Invitations & More reported the following inventories:Raw Materials Inventory $200,000Work-in-Progress Inventory $170,000Finished Goods Inventory $110,000During July 20X9, One Stop Invitations & More actually used 3,000 direct labour hours and recorded thefollowing transactions.i) Purchased materials on account $310,000ii) Manufacturing wages incurred $400,000iii) Materials requisitioned (includes $30,000 of indirect materials) $420,000iv) Assigned manufacturing wages, 90% direct labour, 10% indirect labourv) Other manufacturing overhead incurred $130,000vi) Allocated…
One of Astro Company's activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?
Scorpio makes premium bikes using two departments, assembly and painting. Assembly estimates using 868,000 machine hours and painting uses 41,000 machine hours. Fixed manufacturing overhead costs are estimated to be $10,000,000 for assembly and $751,000 for painting. Variable manufacturing overhead per machine hour is $11.5 in both departments. Machine hours are used as the allocation base for a plantwide predetermined manufacturing overhead application rate. A bike dealership shop places an order for 20 bikes. The order requires 1,030 machine hours in assembly and 105 machine hours in painting. The job also requires $54,000 of direct materials and $108,000 of direct labor. What is the unit product cost (per bike) for the job when Scorpio uses a plantwide approach to calculating its predetermined manufacturing overhead application rate? Round your answer to 2 d.p. Do not round intermediary calculations.
Maxey & Sons manufactures two types of storage cabinets—Type A and Type B—and applies manufacturing overhead to all units at the rate of $120 per machine hour. Production information follows. Type A Type BAnticipated volume (units) 24,000 45,000 Direct-material cost per unit $ 28 $ 42 Direct-labor cost per unit 33 33 The controller, who is studying the use of activity-based costing, has determined that the firm’s overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities’ three respective cost drivers, follow. Type A Type B TotalSetups 140 100 240 Machine hours 48,000 67,500 115,500 Outgoing shipments 200 150 350 The firm’s total…
Body-Solid Inc. manufactures elliptical exercise machines and treadmills. The products are prouced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: Activity Activity Rate Fabrication $25 per machine hour Assembly $12 per direct labor hour Setup $52 per setup Inspecting $25 per inspection Production scheduling $13 per production order Purchasing $10 per purchase order The activity - base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 1,845 1,089 Direct labor hours 472 184 Setups 58 18 Inspections 630 378 Production orders 63 13 Purchase orders 181 110 Units produced 272 182 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the…
The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials, direct labor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it assigns overhead cost to products based on direct labor hours. The company budgeted $15,000 variable factory overhead cost, $90,000 for fixed factory overhead cost and 2,500 direct labor hours (its practical capacity) to manufacture 5,000 pairs of boots in March. The factory used 2,700 direct labor hours in March to manufacture 4,800 pairs of boots and spent $15,600 on variable overhead during the month. The actual fixed overhead cost incurred for the month was $92,000. Required: 1. Compute the factory overhead flexible-budget variance, the factory overhead spending variance, and the efficiency variance for variable factory overhead for March and state whether each variance is favorable (F) or unfavorable (U). 2. Provide the appropriate journal entry to record…
The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough customer demand to justify producing its full capacity of 4,000 sets per year. Annual cost data at full capacity follow: Direct labor Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, administrative office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building Administrative office supplies (billing) Administrative office salaries Direct materials used (wood, bolts, etc.) Utilities, factory Required: 1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as variable or fixed with respect to the number of units produced and sold; and second, as a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or…
Carib Tings & More does hand-crafted memorabilia for the tourism industry, in which each batch of items is a job. The company has a highly machine intensive production process, so it allocates manufacturing overhead based on machine hours. Carib Tings & More pre-determined overhead application rate for 2024 was computed from the following data: Total estimated factory overheads $2,400,000 Total estimated machine hours 40,000 At the end of May 2024, Carib Tings & More reported work in process inventory of $176,000. During June 2024, Carib Tings & More actually used 3,000 machine hours and recorded the following transactions. Purchased $324,000 worth of materials on account. Separately, Carib Tings & More paid a $2,500 bill for freight in. i) ii) Manufacturing wages incurred $400,000 iii) Materials requisitioned (includes $30,000 of indirect materials) $420,000 iv) Assigned manufacturing wages, 85% direct labour, 15% indirect labour v) Depreciation expense on factory equipment used on…