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 September 25, a hurricane destroyed the work in process inventory of Biloxi Corporation. At that time, the company was in the process of manufacturing two custom jobs (B325 and Q428). Although all of Biloxi's on-site accounting records were destroyed, the following information is available from some backup off-site records.
• Biloxi Corp. applies overhead at the rate of 85 percent of direct labor cost.
• The cost of goods sold for the company averages 75 percent of selling price. Sales from January 1 to the date of the hurricane totaled $2,237,200.
• The company's wage rate for production employees is $18.06 per hour. A total of 25,760 direct labor hours were recorded from January 1 through September 25.
• As of September 25, $30,772 of direct material and 128 hours of direct labor had been recorded for Job B325. Also at that time, $20,580 of direct material and 240 hours of direct labor had been recorded for Job Q428.
• January 1 inventories (of the current year) were as follows:…
Frank Weston, supervisor of the Freemont Corporation's Machining Department, was upset after being reprimanded for his
department's poor performance over the prior month. The department's cost control report is given below:
Machine-hours
Direct labor wages
Supplies
Maintenance
Utilities
Freemont Corporation-Machining Department
Cost Control Report
For the Month Ended June 30
Supervision
Depreciation
Total
Actual
Results
Machine-hours
Direct labor wages
Supplies
Maintenance
Utilities
Supervision
Depreciation
Total
42,000
$ 81,800
25,300
24,300
22,000
49,000
49,000
83,000
83,000
$ 285,400 $ 276,800
Planning
Budget
40,000
$ 79,600
23, 200
Actual
Results
"I just can't understand all of these unfavorable variances," Weston complained to the supervisor of another department. "When the
boss called me in, I thought he was going to give me a pat on the back because I know my department worked more efficiently last
month than ever before. Instead, he tore me apart. I thought for a minute it…
Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly upset after being reprimanded for his
department's poor performance over the prior month. The department's cost control report is given below:
Machine-hours
Direct labor wages
Supplies
Maintenance
Utilities
Supervision
Depreciation
Total
Freemont Corporation-Machining Department
Cost Control Report
For the Month Ended June 30
Machine-hours
Direct labor wages
Supplies
Maintenance
Utilities
Supervision
Depreciation
Total
Actual
Results
42,000
$ 89,600
28,300
25,000
22,700
55,000
95,000
$ 315,600
Actual
Results
Planning
Budget
$
40,000
$ 86,800
25,600
22,900
21,500
55,000
95,000
$ 306,800
"I just can't understand all of these unfavorable variances," Weston complained to the supervisor of another department. "When the
boss called me in, I thought he was going to give me a pat on the back because I know for a fact that my department worked more
efficiently last month than it has ever worked before.…
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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