Reference no: EM133102717
Question 1 - The following costs are attributed to the Gandalf and Company:
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Purchase of raw materials (all direct)
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$291,100
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Direct labour cost
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141,800
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Manufacturing overhead costs
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198,100
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Change in inventories:
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Decrease in raw materials
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$9,100
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Decrease in work in process
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4,100
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Decrease in finished goods
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13,200
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Gandalf and Company used a 120% predetermined overhead rate based on direct labour cost.
Required -
1. Calculate the cost of goods manufactured.
2. What was the cost of goods sold before adjusting for any under or over applied overhead?
3. By how much was manufacturing overhead cost under or over applied?
4. Prepare a summary journal entry to close any under or over applied manufacturing overhead cost to the cost of goods sold. Is such an entry appropriate in this situation? Why or why not?
Question 2 - Paddle Place manufactures paddles and tables. In December, the two production departments had budgeted allocation bases of 3,100 machine-hours in Paddle and 6,900 direct manufacturing labor-hours in Table. The budgeted manufacturing overheads for the month were $51,200 and $56,900, respectively. For Project X, the actual costs incurred in the two departments were as follows:
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Paddle
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Table
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Direct materials purchased on account
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$80,000
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$177,500
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Direct materials used
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21,200
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12,200
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Direct manufacturing labor
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41,900
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53,500
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Indirect manufacturing labor
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8,900
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9,000
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Indirect materials used
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5,100
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4,750
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Lease on equipment
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14,100
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3,750
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Utilities
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990
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1,250
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Project X incurred 900 machine-hours in Paddle and 200 manufacturing labor-hours in Table. The company uses a budgeted overhead rate for applying overhead to production.
Required -
1. Determine the budgeted manufacturing overhead rate for each department.
2. Prepare the journal entries for Paddle department.
3. What is the total cost of Project X?
Question 3 - Identify the following situations as "job-order costing" or "process costing"?
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Situation
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Job Order or Process Costing
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An oil refinery
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A soft-drink bottler
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A film studio
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A manufacturer of fine custom jewelry
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A textbook publisher
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A paint factory
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A golf course designer
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A public accounting firm
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A pharmaceutical company
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An advertising agency
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A flour mill
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A landscaping company
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A catering service
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A commercial aircraft manufacturer
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A management consulting firm
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An auto repair garage
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An apparel manufacturer
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Question 4 - Hamilton Company recorded the following transactions for the just-completed month. Journalize these entries.
a. $45,000 in raw materials was purchased on account.
b. $125,000 in raw materials was requisitioned for use in production. Of this amount, $70,000 was for direct materials and the remainder was for indirect materials.
c. Total labour wages of $212,000 were incurred. Of this amount, $183,000 was for direct labour and the remainder were for indirect labor.
d. Additional manufacturing overhead costs of $189,000 were incurred.
e. There was $400,000 of manufactured products completed by the end of the month.