Cost Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText -- Access Card Package (15th Edition)
15th Edition
ISBN: 9780133781106
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Question
Chapter 16, Problem 16.24E
1.
To determine
Gross margin as per production method and sales method of by-product accounting.
Given information:
Production of potato chips is 52,000 pounds
Production of by-product is 8,500 pounds
Sales of potato chips is 42,640 pounds
Sales of by-product is 6,500 pounds
Selling price per unit of potato chips is $16 per pound.
Production of by-product is $10 per pound.
2.
To determine
To compute: Ending inventory of main product and by-product as per production method and sales method.
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Carla Vista Manufacturing Company uses a job order cost system and keeps perpetual inventory records.
June 1
Purchased raw materials for $23,600 on account.
8
Raw materials requisitioned by production:
$9,440
Direct
materials
Indirect
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1,180
Paid factory utilities, $2,478 and repairs for factory equipment, $9,440.
15
25
Incurred $122,000 of factory labor.
25
Time tickets indicated the following:
Direct Labor
(7,000 hrs x $14 per
hr)
$98,000
Indirect Labor
(3,000 hrs x $8 per
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24,000
$122,000
45
25
Applied manufacturing overhead to production based on a predetermined overhead rate of $7 per direct labor
hour worked.
28
30
Goods costing $18,020 were completed in the factory and were transferred to finished goods inventory.
Goods costing $15,020 were sold for $20,020 on account.
Prepare journal entries to record the above transactions during the month of June. (Credit account titles are automatically
indented when the amount is entered. Do not indent manually. List all debit…
PART 2.
(22 marks)
Mangal Furnishings produce serving trays for the tourist industry in a five-stage process - Cutting &
Shaping, Assembly, Sanding, Finishing and Packaging. Upon entering the finishing process, before
the trays are stained and polished, a specialized piece of equipment is used to engrave a logo on
each tray. After Packaging, the trays are sent to the business warehouse for delivery to customers.
The following data relates to the Finishing Process for the month of March during which 3,800 trays
valued at $597.90 each were transferred in from the Sanding Process.
Other production costs incurred during the month are summarized as follows:
Direct Materials Added
Direct Manufacturing Wages
Hireage cost of specialized logo equipment
Manufacturing Overhead
$343,380
$830,150
$21,300
$412,100
Process inspection occurs during the process and normally 2% of the trays entering the Finishing
process are rejected and sold as scrap to local retailers at $750 each. During the month…
Chapter 16 Solutions
Cost Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText -- Access Card Package (15th Edition)
Ch. 16 - Give two examples of industries in which joint...Ch. 16 - What is a joint cost? What is a separable cost?Ch. 16 - Distinguish between a joint product and a...Ch. 16 - Why might the number of products in a joint-cost...Ch. 16 - Provide three reasons for allocating joint costs...Ch. 16 - Why does the sales value at splitoff method use...Ch. 16 - Prob. 16.7QCh. 16 - Distinguish between the sales value at splitoff...Ch. 16 - Give two limitations of the physical-measure...Ch. 16 - How might a company simplify its use of the NRV...
Ch. 16 - Why is the constant gross-margin percentage NRV...Ch. 16 - Managers must decide whether a product should be...Ch. 16 - Prob. 16.13QCh. 16 - Describe two major methods to account for...Ch. 16 - Why might managers seeking a monthly bonus based...Ch. 16 - Prob. 16.16ECh. 16 - Prob. 16.17ECh. 16 - Prob. 16.18ECh. 16 - Prob. 16.19ECh. 16 - Prob. 16.20ECh. 16 - Prob. 16.21ECh. 16 - Prob. 16.22ECh. 16 - Prob. 16.23ECh. 16 - Prob. 16.24ECh. 16 - Joint costs and decision making. Jack Bibby is a...Ch. 16 - Joint costs and byproducts. (W. Crum adapted)...Ch. 16 - Prob. 16.27PCh. 16 - Prob. 16.28PCh. 16 - Prob. 16.29PCh. 16 - Prob. 16.30PCh. 16 - Prob. 16.31PCh. 16 - Prob. 16.32PCh. 16 - Prob. 16.33PCh. 16 - Prob. 16.34PCh. 16 - Prob. 16.35PCh. 16 - Prob. 16.36PCh. 16 - Methods of joint-cost allocation, comprehensive....
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