Managerial Accounting: Creating Value in a Dynamic Business Environment
11th Edition
ISBN: 9781259569562
Author: Ronald W Hilton Proffesor Prof, David Platt
Publisher: McGraw-Hill Education
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Chapter 2, Problem 39P
To determine
Prepare cost of work-in-progress and finished-goods inventories.
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On April 12, after the close of business, Singh & Sons had a devastating fire that destroyed the company's work-in-process and
finished-goods inventories. Fortunately, all raw materials escaped damage because materials owned by the firm were stored in
another warehouse. The following information is available:
Sales revenue through April 12
Income before taxes through April 12
Direct labor through April 12
Cost of goods available for sale, April 12
Work-in-process inventory, January 11
Finished-goods inventory, January 1
Gross margin
$330,000
68,000
120,000
275,000
21,000
37,000
Cost of finished-goods inventory
Cost of work-in-process inventory
30% of sales
The firm's accountants determined that the cost of direct materials used normally averages 25 percent of prime costs (.e., direct
material + direct labor). In addition, manufacturing overhead is 50 percent of the firm's total production costs.
Required:
Singh & Sons is in the process of negotiating a settlement with its insurance…
Equinox Fabrication Plant suffered a fire incident in August due to which most of the records for
the year were destroyed. The following accounting data for the year that were recovered:
Total manufacturing overhead estimated at the beginning of
the
$105,840
$186,000
3,600 direct labor hours
$99,760
$142,000
year
Total direct labor costs estimated at the beginning of the year
Total direct labor hours estimated at the beginning of the year
Actual manufacturing overhead costs for the
Actual direct labor costs for the year
Actual direct labor hours for the year
year
2,950 direct labor hours
The company bases its manufacturing overhead allocation on direct labor hours. What was the
predetermined overhead allocation rate for the year?
Equinox Fabrication Plant suffered a fire incident in August due to which most of the records for the year were destroyed. The following accounting data for the year that were recovered:
Total manufacturing overhead estimated at the beginning of the year
$105,840
Total direct labor costs estimated at the beginning of the year
$186,000
Total direct labor hours estimated at the beginning of the year
3,600 direct labor hours
Actual manufacturing overhead costs for the year
$99,760
Actual direct labor costs for the year
$142,000
Actual direct labor hours for the year
2,950 direct labor hours
The company bases its manufacturing overhead allocation on direct labor hours. Calculate the predetermined overhead allocation rate for the year?
Chapter 2 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 2 - Distinguish between product costs and period...Ch. 2 - Why are product costs also called inventoriable...Ch. 2 - What is the most important difference between a...Ch. 2 - List several product costs incurred in the...Ch. 2 - Prob. 5RQCh. 2 - Why is the cost of idle time treated as...Ch. 2 - Explain why an overtime premium is included in...Ch. 2 - Prob. 8RQCh. 2 - Give examples to illustrate how the city of Tampa...Ch. 2 - Distinguish between fixed costs and variable...
Ch. 2 - How does the fixed cost per unit change as the...Ch. 2 - Prob. 12RQCh. 2 - Distinguish between volume-based and...Ch. 2 - Would each of the following characteristics be a...Ch. 2 - List three direct costs of the food and beverage...Ch. 2 - List three costs that are likely to be...Ch. 2 - Which of the following costs are likely to be...Ch. 2 - Distinguish between out-of-pocket costs and...Ch. 2 - Define the terms sunk cost and differential cost.Ch. 2 - Distinguish between marginal and average costs.Ch. 2 - Prob. 21RQCh. 2 - Two years ago the manager of a large department...Ch. 2 - Indicate whether each of the following costs is a...Ch. 2 - For each case below, find the missing amount.Ch. 2 - A foundry employee worked a normal 40-hour shift,...Ch. 2 - A loom operator in a textiles factory earns 16 per...Ch. 2 - Consider the following costs that were incurred...Ch. 2 - Alexandria Aluminum Company, a manufacturer of...Ch. 2 - Prob. 30ECh. 2 - A hotel pays the phone company 100 per month plus...Ch. 2 - Prob. 32ECh. 2 - Orbital Communications, Inc. manufactures...Ch. 2 - The state Department of Education owns a computer...Ch. 2 - Prob. 35ECh. 2 - List the costs that would likely be included in...Ch. 2 - Consider the following cost items: 1. Salaries of...Ch. 2 - The following selected information was extracted...Ch. 2 - Prob. 39PCh. 2 - Mason Corporation began operations at the...Ch. 2 - Determine the missing amounts in each of the...Ch. 2 - The following cost data for the year just ended...Ch. 2 - The following data refer to San Fernando Fashions...Ch. 2 - Highlander Cutlery manufactures kitchen knives....Ch. 2 - Cape Cod Shirt Shop manufactures T-shirts and...Ch. 2 - Heartland Airways operates commuter flights in...Ch. 2 - San Diego Sheet Metal, Inc. incurs a variable cost...Ch. 2 - Hightide Upholstery Company manufactures a special...Ch. 2 - For each of the following costs, indicate whether...Ch. 2 - Indicate for each of the following costs whether...Ch. 2 - Water Technology, Inc. incurred the following...Ch. 2 - The following terms are used to describe various...Ch. 2 - Several costs incurred by Bayview Hotel and...Ch. 2 - Refer to Exhibit 23, and answer the following...Ch. 2 - Roberta Coy makes custom mooring covers for boats....Ch. 2 - The Department of Natural Resources is responsible...Ch. 2 - Prob. 57PCh. 2 - Prob. 58PCh. 2 - CompTech, Inc. manufactures printers for use with...Ch. 2 - You just started a summer internship with the...
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