Reference no: EM13343177

Problem - Journal Entries Larney Corporation:

Larney Corporation uses process costing. A number of transactions that occurred in June are listed below.

1.     Raw materials that cost $68,200 are withdrawn from the storeroom for use in the Mixing Department. Direct materials amounted to 75%, with the balance classified as indirect materials.

2.     Direct labor costs of $36,500 and indirect labor costs off $14,500 were incurred, but not yet paid, in the Mixing Department.

3.     Manufacturing overhead of $42,100 is applied in the Mixing Department using the department's predetermined overhead rate.

4.     Units with a carrying cost of $112,400 finish processing in the Mixing Department and are transferred to the Drying Department for further processing.

5.     Units with a carrying cost of $143,800 finish processing in the Drying Department, the final step in the production process, and are transferred to the finished goods warehouse.

6.     Finished goods with a carrying cost of $138,500 are sold on account for $199,500. Assume a perpetual inventory system and enter a compound journal entry.

Required:

Prepare journal entries for each of the transactions listed above. 

 

Problem- Packer Manufacturing Company:

Production and cost data for the month of February for Process A of the Packer manufacturing Company follow:

Units in process, February 1

(100% complete with respect to materials;

25% complete with respect to conversion cost) ...           ?,???

New units started in process...........................              18,000

Units completed.........................................  16,000

Units in process, February 28

(100% complete with respect to materials;

1/3 complete with respect to conversion cost)......           6,000

 

Work in process inventory, February 1:

Materials.................................................     $2,000

Conversion..............................................    $20,000

 

Cost incurred in February:

Materials issued........................................    $8,560

Conversion..............................................    $21,500

 

The company uses the weighted-average cost method in its process costing system.

 

Required:

1.     Calculate the equivalent units and cost per equivalent unit for February for materials and for conversion costs. (Carry calculations out to the nearest tenth of a cent.)

2.     Determine the cost transferred to finished goods.

3.     Determine the amount of cost that should be assigned to the ending work in process. 

4.     Do a cost reconciliation report.

 

Problem Cost-Volume-Profit Relationships

The Esposito Dental Products Company's most recent income statement is shown below:

(CALCULATE ALL CHANGES FROM THE BEGINNING SCENARO OF NUMBERS)

	Total	Per unit
Sales (10,000 units)	$400,000	$40
Variable expenses	250,000	25
Contribution margin	150,000	$15
Fixed expenses	105,000
Net operating income	$  45,000

 

1.     The sales volume increases by 25% and the price decreases by $2.00 per unit.

2.     The selling price decreases $4.00 per unit, fixed expenses increase by $16,000, and the sales volume increases by 50%.

3.     The selling price increases by 25%, variable expense increases by $5.50 per unit, and the sales volume decreases by 30%.

4.     The selling price increases by $6.50 per unit, variable cost increases by $5.75 per unit, fixed expenses increase by $28,400, and sales volume decreases by 12%. Using the degree of operating leverage, calculate the increase in profits resulting from an increase in sales of 15%.  

Calculate the Degree of Operating Leverage and Margin of Safety where referenced in the answer template.

 

Problem - Cost-Volume-Profit Relationships Multiple Products

Stanger Company, LLC produces and sells three products. Data concerning those products for the most recent month appear below:

 

	Product A	Product B	Product C
Sales	$26,000	$32,000	$23,000
Variable Expense	$13,283	$18,421	$11,296

 

Fixed Expenses for the entire company were $29,816

Required:

1.     Determine the overall break-even point for the company.

 

Problem  - Manufacturing Overhead

Pomona Pasteurizing Inc. used a predetermined overhead rate based on direct labor hours, but switched this year to one based on direct machine hours to apply manufacturing overhead to jobs. Production supervisors estimated that 16,715 direct labor hours will be worked during the year. Engineering estimated that the total machine hours for the year would be 66,860. The predetermined overhead rate will be? The company's estimated costs for the next year are:

Cost item	Amount
Depreciation of Factory Equipment	$72,000
Direct Labor	240,000
Direct Materials	36,000
Factory Equipment Lease	144,000
Factory Maintenance	180,000
Indirect labor	72,000
Sales Salaries	174,000
Total Estimated Overhead	918,000
Estimated Labor Hours	16,715
Estimated Machine Hours	66,860

 

At the end of the year, the actual machine hours were 67,200 and the total actual manufacturing overhead was $179,840.

1.     Calculate the Manufacturing Overhead balance at the end of the year and the journal entry to clear this amount if necessary.