Reference no: EM133050789

Questions -

Q1. Lachi Company manufactures a product in 3 departments. Information related to the 2nd department are:

Work in process, beginning (75% conversion cost) - 1,400 u

Units received from Department 1 - 4,600 u

Units transferred to Department 3 - 5,000 u

Work in process, end (60% material, 30% conversion cost) - 1,000 u

Production costs:

Work in process, beginning - $34,842

Cost from Department 1 - 70,380

Direct Materials - 20,440

Direct labor - 17,526

Factory Overhead - 35,052

Compute for the cost per equivalent unit for conversion cost using FIFO.

Q2. AJ Corporation manufactures tables. The entity also does contract work for other customers and utilizes a job order costing system. The flexible budget covering next years' expected range of activity is:

Direct Labor Hours	50,000	80,000	110,000
Machine Hours	40,000	64,000	88,000
Variable Overhead Costs	$100,000	$160,000	$220,000
Fixed Overhead Costs	150,000	150,000	150,000
Total Overhead Costs	$250,000	$310,000	$370,000

A predetermined overhead rate is based on direct labor hours is used to apply total overhead. Management has estimated that 100,000 direct labor hours will be used next year. At the end of the year, actual direct labor hours for the year were 112,375 hours and the actual manufacturing overhead for the year was $412,525. What amount is the over/underapplied FOH?

Q3. Sama Company has 3 production departments: Key, Day, and Coy. It also has 2 service

departments: Administration and Personnel. Administration costs are allocated based on value of assets employed, and Personnel costs are allocated based on number of employees. Assume that Administration provides more service to the other departments than does the Personnel Department.

Department	Direct Costs	Employees	Asset Value
Administration	1,800,000	50	900,000
Personnel	700,000	20	1,200,000
Key	1,400,000	30	600,000
Day	400,000	10	300,000
Coy	500,000	20	1,600,000

Under the direct method, how much is the the factory overhead rate of the Day department if it apply overhead based on direct labor hours and budgeted direct labor hours for the period total to 75,000 hours.

Q4. Sara Corporation has 3 producing departments - Cutting, Sewing and Finishing. In November, the Sewing department transferred 6,200 units to Finishing and had 400 units in process at the end of the month. The Sewing department work in process inventory as of October 31 were 1,200 units. These units were 1/4 incomplete as of that date, with a cost of $13,312. Out of this total amount, 40% was materials cost, while the cost of labor was 1/3 of conversion cost. The units started in the Sewing department during November were received from the preceding department at a cost of $47,595.60. For the same month, the sewing department incurred $11,772 for materials, $15,660 for labor and $2,268 for overhead. As of the end of the month, the department has done one quarter of the work required to complete the units in process. How much is the cost of units transferred to the Finishing department?