Reference no: EM132338361
Question
1. Ratchford Clocks manufactures alarm clocks and wall clocks, and allocates overhead based on direct labor hours. The production process is set up in three departments: Assembly, Finishing, and Calibrating. The following is information regarding the direct labor used to produce one unit of the two clocks:
Per Unit Hours:
Assembly Finishing Calibrating
Alarm clocks 3 1 1
Wall clocks 2 3 2
Totals 5 4 3
The budget includes the following factory overhead by department:
Assembly Department $595,000
Finishing Department 200,000
Calibrating Department 140,000
Total $935,000
Ratchford Clocks is planning to manufacture 50,000 alarm clocks and 10,000 wall clocks.
(a) Determine the total number of hours that will be needed by department.
(b) Determine the factory overhead rate by department using the multiple production department factory overhead rate method.
(c) Determine the amount of factory overhead to be allocated to each unit of alarm clocks and wall clocks.
(d) Determine the amount of total factory overhead to be allocated to the alarm clocks and wall clocks.
2. On October 31, the end of the first month of operations, Morristown & Co. prepared the following income statement based on absorption costing:
Morristown & Co.
Income Statement
For Month Ended October 31, 20-
Sales (2,600 units) $104,000
Cost of goods sold:
Cost of goods manufactured $85,500
Less ending inventory (400 units) 11,400
Cost of goods sold 74,100
Gross profit $ 29,900
Selling and administrative expenses 21,500
Income from operations $ 8,400
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If the fixed manufacturing costs were $42,900 and the variable selling and administrative expenses were $14,600, prepare an income statement in accordance with the variable costing concept.
3. For the current year ending April 30, Hal Company expects fixed costs of $60,000, a unit variable cost of $70, and a unit selling price of $105.
(a) Compute the anticipated break-even sales (units).
(b) Compute the sales (units) required to realize an operating profit of $8,000.
4. The following data are taken from the balance sheet at the end of the current year.
?Cash $154,000
Accounts receivable 210,000
Inventory 240,000
Prepaid expenses 15,000
Temporary investments 350,000
Property, plant, and equipment 375,000
Accounts payable 245,000
Accrued liabilities 4,000
Income tax payable 10,000
Notes payable, short-term 85,000
?Determine the (a) working capital, (b) current ratio, and (c) quick ratio. Round ratios to one decimal place.
5. The following data are available for Martin Solutions, Inc. Determine for each year: (a) Inventory Turnover and (b) the number of days' sales in inventory (Round to one decimal place.
Year 2 Year 1 Sales
$1,139,600 $1,192,320 Beginning inventory
80,000 64,000 Cost of goods sold
500,800 606,000 Ending inventory
72,000 80,000