Videos
a.
Identify the reason for which the cost per plaque is increased from $60 to $80.
a.
Explanation of Solution
Job order costing
Job order cost system provides a separate record of each particular quantity of product that passes through the factory. Each quantity that is manufactured in the business is known as job. Job order costing is used when the products produced are significantly different from each other.
Identify the difference between the expected number of backboards and brass plates, and the number of actual plaques shipped for Job 101.
| Materials | |
| Walnut plaques: | |
| Actual units used | 40 units |
| Expected units needed to produce 40 plaques | 40 units |
| Difference | 0 units |
| Brass plates: | |
| Actual units used | 40 units |
| Expected units needed to produce 40 plaques | 40 units |
| Difference | 0 units |
Table (1)
Identify the difference between the expected labor hours required to produce 40 plaques, and actual labors used for engraving and assembling for Job 101.
| Labor | |
| Engraving: | |
| Actual labor hours used | 20 hours |
|
Expected labor hours to produce 40 plaques | 20 hours |
| Difference | 0 hours |
| Assembly: | |
| Actual labor hours used | 10 hours |
|
Expected labor hours to produce 40 plaques | 10 hours |
| Difference | 0 hours |
Table (2)
Identify the difference between the expected number of backboards and brass plates, and the number of actual plaques shipped for Job 105.
| Materials | |
| Walnut plaques: | |
| Actual units used | 34 units |
| Expected units needed to produce 30 plaques | 30 units |
| Difference | 4 units |
| Brass plates: | |
| Actual units used | 34 units |
| Expected units needed to produce 30 plaques | 30 units |
| Difference | 4 units |
Table (3)
Identify the difference between the expected labor hours required to produce 30 plaques, and actual labors used for engraving and assembling for Job 105.
| Labor | |
| Engraving: | |
| Actual labor hours used | 17 hours |
|
Expected labor hours to produce 40 plaques | 15 hours |
| Difference | 2 hours |
| Assembly: | |
| Actual labor hours used | 8.5 hours |
|
Expected labor hours to produce 40 plaques | 7.5 hours |
| Difference | 1.0 hours |
Table (4)
Interpretation:
Cost per unit of material or labor is same for both the job, hence total cost did not increase because of the cost per unit of material or labor. Cost per plaque is $60 for Job 101 and $68 for Job 105. This cost per plaque is increased in Job 105, because of the usage of more labor and materials than that of Job 101. From the above calculation, it is identified that expected number of backboards and brass plates, and the number of actual plaques shipped for Job 101 are same, whereas Job 105 required 4 more backboards and brass plates than the expected number of units.
For Job 105, the expected labor hours (engraving and assembly) to produce 30 plaques are
b.
Recommend some improvements for Incorporation RT.
b.
Explanation of Solution
Job 105 requires producing 30 good quality plaques, for that it uses 34 engraved brass plates. It is observed that engraver is not spelling the names correctly; this is because of supplying of small typewritten fonts to the engraver. Hence, the names should be supplied to the engravers in large typewritten fonts, so that they can print the name without any mistakes.
The assembly operation also needs some improvement, as it took 34 assembly operations in order to assemble 30 plaques properly. It may be that the plates are assembled off-register (crooked) to the backboard. This could be improved by using a fixture to properly align the plate to the backboard. Alternatively, it’s possible that the improper-engraved plaques were assembled to the backboards and needed to be disassembled, re-engraved, and reassembled to new backboards.
Want to see more full solutions like this?
Chapter 2 Solutions
Bundle: Managerial Accounting, 15th + Cengagenowv2, 1 Term Printed Access Card
- A trial balance will balance even if A. a journal entry to record the purchase of equipment for cash of $52100 is not posted. B. a $13100 cash dividend is debited to dividends for $13100 and credited to cash for $1310. C. a $510 collection on accounts receivable is credited to accounts receivable for $510 without a corresponding debit. D. a purchase of supplies for $595 on account is debited to supplies for $595 and credited to accounts payable for $559.arrow_forwardEquipment costing $15200 is purchased by paying $3800 cash and signing a note payable for the remainder. The journal entry to record this transaction should include a credit to Notes Payable. credit to Notes Receivable. credit to Equipment. debit to Cash.arrow_forwardAt December 1, 2025, a company's Accounts Receivable balance was $20160. During December, the company had credit sales of $54000 and collected accounts receivable of $43200. At December 31, 2025, the Accounts Receivable balance is A. $30960 debit. B. $30960 credit. C. $74160 debit. D. $20160 debit.arrow_forward
- Whispering Winds Corp.'s trial balance at the end of its first month of operations reported the following accounts and amounts with normal balances: Cash $14720 Prepaid insurance 460 Accounts receivable 2300 Accounts payable 1840 Notes payable 2760 Common stock 4600 Dividends 460 Revenues 20240 Expenses 11500 Total credits on Whispering Winds Corp's trial balance are A. $28980. B. $30360. C. $29900. D. $29440arrow_forwardSwifty Corporation's trial balance reported the following normal balances at the end of its first year: Cash $14440 Prepaid insurance 530 Accounts receivable 2660 Accounts payable 2130 Notes payable 3190 Common stock 4100 Dividends 530 Revenues 22040 Expenses 13300 What amount did Swifty Corporation's trial balance show as total credits? A. $31460 B. $32520 C. $30930 D. $31990arrow_forwardMonty Inc., a major retailer of high-end office furniture, operates several stores and is a publicly traded company. The company is currently preparing its statement of cash flows. The comparative statement of financial position and income statement for Monty as at May 31, 2020, are as The following is additional information about transactions during the year ended May 31, 2020 for Monty Inc., which follows IFRS. Plant assets costing $69,000 were purchased by paying $47,000 in cash and issuing 5,000 common shares. In order to supplement its cash, Monty issued 4,000 additional common shares. Cash dividends of $35,000 were declered and paid at the end of the fiscal year. create direct method cash flow statement, show your workarrow_forward
- Following is additional information about transactiona during the year ended May 31, 2020 for Monty Inc., which follows IFRS. Plant assets costing $69,000 were purchased by paying $47,000 in cash and issuing 5,000 common shares. In order to supplement iRs cash, Monty Issued 4,000 additional common shares. Cash dividends of $35,000 were declared and paid at the end of the fiscal year. PRepare a direct Method Cash FLow using the format.arrow_forwardmake a trail balancearrow_forwardOn July 31, 2025, the general ledger of Cullumber Legal Services Inc. showed the following balances: Cash $4,960, Accounts Receivable $1,860, Supplies $620, Equipment $6,200, Accounts Payable $5,080, Common Stock $4,340, and Retained Earnings $4,220. During August, the following transactions occurred. Aug. 3 5 Collected $1,490 of accounts receivable due from customers. Received $1,610 cash for issuing common stock to new investors. 6 Paid $3,350 cash on accounts payable. 7 Performed legal services of $8,060, of which $3,720 was collected in cash and the remainder was due on account. 2 2 2 2 2 12 Purchased additional equipment for $1,490, paying $500 in cash and the balance on account. 14 Paid salaries $4,340, rent $1,120, and advertising expenses $340 for the month of August. 18 20 24 26 27 Collected the balance for the services performed on August 7. Paid cash dividend of $620 to stockholders. Billed a client $1,240 for legal services performed. Received $2,480 from Laurentian Bank;…arrow_forward
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning