Jurvin Enterprises recorded the following transactions for the just completed month. The company had no beginning inventories. a. $94,000 in raw materials were purchased for cash. b. $89,000 in raw materials were requisitioned for use in production. Of this amount, $78,000 was for direct materials and the remainder was for indirect materials. c. Total labor wages of $132,000 were incurred and paid. Of this amount, $112,000 was for direct labor and the remainder was for indirect labor. d. Additional manufacturing overhead costs of $143,000 were incurred and paid. e. Manufacturing overhead costs of $152,000 were applied to jobs using the company’s predetermined overhead rate. f. All of the jobs in progress at the end of the month were completed and shipped to customers. g. Any under applied or over applied overhead for the period was closed out to Cost of Goods Sold. Required: 1. Post the above transactions to T-accounts. 2. Determine the cost of goods sold for the period.
> A number of costs are listed below that may be relevant in decisions faced by the management of Svahn, AB, a Swedish manufacturer of sailing yachts: Required: Copy the information above onto your answer sheet and place an X in the appropriate column to
> Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process: Budgeted unit sales ..................................................
> Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: The company’s beginning cash balance for the upcoming fiscal year will be
> The budgeted unit sales of Weller Company for the upcoming fiscal year are provided below: The company’s variable selling and administrative expense per unit is $2.50. Fixed selling and administrative expenses include advertising expe
> The direct labor budget of Yuvwell Corporation for the upcoming fi scal year contains the following details concerning budgeted direct labor-hours: The company’s variable manufacturing overhead rate is $3.25 per direct labor-hour and
> The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour. Required: 1. C
> Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is 150 roubles per kilogram. (Siberia is located in Russia, whose currency is the rouble.) Bu
> Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows: ____________Sales in Units April ................................. 50,000 May .................................. 75,000 June .......
> Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: a. As of December 31 (the end of the prior quart
> What is a master budget? Briefly describe its contents.
> Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: a. The Marketing Department has estimated sales as follows for the
> Westex Products is a wholesale distributor of industrial cleaning products. When the treasurer of Westex Products approached the company’s bank late in the current year seeking short-term financing, he was told that money was very tight
> The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash .................................................... $8,000 Accounts receivable ......................... $20,0
> Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following infor
> Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below: From past experience,
> The president of the retailer Prime Products has just approached the company’s bank with a request for a $30,000, 90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some d
> Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below: Minden Company Balance Sheet April 30 Assets Cash ......................................................................
> You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company’s operations: a. The cash balance on December 1 is $40,000. b. Actua
> Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company is now pla
> The production department of Raredon Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Each unit requires 0.70 direct labor-hours, and direct labor-hour workers are paid $10.50 per hour.
> What is meant by the term responsibility accounting?
> The production department of Hareston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: In addition, the beginning raw materials inventory for the first quarter is budgeted to be 1,400 pounds
> The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): The selling price of the company’s product is $18.00 per unit. Management expects to col
> The marketing department of Gaeber Industries has submitted the following sales forecast for the upcoming fiscal year: The company expects to start the first quarter with 1,600 units in finished goods inventory. Management desires an ending finished go
> A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $5,000 to start each quarter. Required: Fill in the missing amounts in the above table. Quarter 1 4 Year Cash bal
> The management of Mecca Copy, a photocopying center located on University Avenue, has compiled the following data to use in preparing its budgeted balance sheet for next year: __________________________Ending Balances Cash ..............................
> The following terms pertain to the budgeting process: Benchmarks Budget Control Motivation Responsibility accounting Bottlenecks Budget committee Imposed from above Planning Self-imposed budget Required: Fill in the blanks with the most appropriate word
> Harrison Company makes two products and uses a conventional costing system in which a single plant wide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow: These products are cust
> Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow: Additional information about the company follows: a. Hubs require $32 in direct materials per unit, and Sprockets require $18. b. The direct labor
> Refer to the data in Exercise 3–6 for Sylvan Company. Activities during the year were distributed across the company’s four products as follows: Data in Exercise 3–6 Sylvan Company uses activity-bas
> Sylvan Company uses activity-based costing to determine product costs for external financial reports. The company’s partially completed Manufacturing Overhead T-account for the current year is shown below: Required: 1. What does the e
> Discuss some of the major benefits to be gained from budgeting.
> What is underapplied overhead? Overapplied overhead? What disposition is made of these amounts at the end of the period?
> Larker Corporation implemented activity-based costing several years ago and uses it for its external financial reports. The company has four activity cost pools, which are listed below. Activity Cost Pool __________________Activity Rate Machine related .
> Midwest Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 50,000 units next year and Product L is expected to sell 10,000 units. A unit of either product requires 0.2 direct labor-hours. The compan
> Klumper Corporation is a diversified manufacturer of industrial goods. The company’s activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost ____________________________Pool Activit
> Kramer Corporation is a diversified manufacturer of consumer goods. The company’s activity based costing system has the following seven activity cost pools: Required: 1. Compute the activity rate for each activity cost pool. 2. Comput
> Ellix Company manufactures two models of ultra-high fidelity speakers, the X200 model and the X99 model. Data regarding the two products follow: Additional information about the company follows: a. Model X200 requires $72 in direct materials per unit,
> Hunter Corporation uses activity-based costing to determine product costs for external financial reports. At the beginning of the year, management made the following estimates of cost and activity in the company’s five activity cost poo
> Aucton Corporation is a manufacturing company that uses activity-based costing for its external financial reports. The company’s activity cost pools and associated data for the coming year appear below: At the beginning of the year, t
> Munoz Corporation uses activity-based costing to determine product costs for external financial reports. At the beginning of the year, management made the following estimates of cost and activity in the company’s five activity cost pool
> Siegel Corporation manufactures a product that is available in both a deluxe and a regular model. The company has made the regular model for years; the deluxe model was introduced several years ago to tap a new segment of the market. Since introduction o
> Jordan’s Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costin
> “The principal purpose of the cash budget is to see how much cash the company will have in the bank at the end of the year.” Do you agree? Explain.
> For many years, Zapro Company manufactured a single product called a mono-relay. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called a bi-relay that has become increasingly popular. T
> Juneau Company manufactures a variety of products in a single facility. Consultants hired by the company to do an activity-based costing analysis have identified the following activities carried out in the company on a routine basis: a. Machines are set
> The following activities are carried out in Greenberry Company, a manufacturer of consumer goods. a. Direct labor workers assemble a product. b. Engineers design a new product. c. A machine is set up to process a batch. d. Numerically controlled machines
> The following activities occur at Greenwich Corporation, a company that manufactures a variety of products. a. Receive raw materials from suppliers. b. Manage parts inventories. c. Do rough milling work on products. d. Interview and process new employees
> Osborn Manufacturing uses a predetermined overhead rate of $18.20 per direct labor-hour. This predetermined rate was based on 12,000 estimated direct labor-hours and $218,400 of estimated total manufacturing overhead. The company incurred actual total ma
> Primare Corporation has provided the following data concerning last month’s manufacturing operations. Required: 1. Prepare a schedule of cost of goods manufactured for the month. 2. Prepare a schedule of cost of goods sold for the mon
> Luthan Company uses a predetermined overhead rate of $23.40 per direct labor-hour. This predetermined rate was based on 11,000 estimated direct labor-hours and $257,400 of estimated total manufacturing overhead. The company incurred actual total manufact
> Larned Corporation recorded the following transactions for the just completed month. a. $80,000 in raw materials were purchased on account. b. $71,000 in raw materials were requisitioned for use in production. Of this amount, $62,000 was for direct mater
> Harris Fabrics computes its predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year it estimated that its total manufacturing overhead would be $134,000 and the total direct labor would be 20,000 hours. Its a
> What is a budget? What is budgetary control?
> Cycle Gear Corporation has incurred the following costs on job number W456, an order for 20 special sprockets to be delivered at the end of next month. Direct materials: On April 10, requisition number 15673 was issued for 20 titanium blanks to be used i
> Which method of determining product costs, job-order costing or process costing, would be more appropriate in each of the following situations? a. An Elmer’s glue factory. b. A textbook publisher such as McGraw-Hill. c. An Exxon oil refinery. d. A facili
> Selected T-accounts of Moore Company are given below for the just completed year: Required: 1. What was the cost of raw materials put into production during the year? 2. How much of the materials in (1) above consisted of indirect materials? 3. How muc
> High Desert Potteryworks makes a variety of pottery products that it sells to retailers such as Home Depot. The company uses a job-order costing system in which predetermined overhead rates are used to apply manufacturing overhead cost to jobs. The prede
> Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). All materials are classified as direct materials. In computing a pred
> Almeda Products, Inc., uses a job-order costing system. The company’s inventory balances on April 1, the start of its fiscal year, were as follows: Raw materials ........................................... $32,000 Work in process ........................
> Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. A popular pastime among older Chinese men is to take their pet birds on daily excursions to teahouses and public parks where they meet wit
> White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department base
> Vista Landscaping uses a job-order costing system to track the costs of its landscaping projects. The company provides garden design and installation services for its clients. The table below provides data concerning the three landscaping projects that w
> Kingsport Containers, Ltd, of the Bahamas experiences wide variation in demand for the 200-liter steel drums it fabricates. The leak proof, rustproof steel drums have a variety of uses from storing liquids and bulk materials to serving as makeshift music
> Under absorption costing, how is it possible to increase net operating income without increasing sales?
> The following cost data relate to the manufacturing activities of Chang Company during the just completed year: Manufacturing overhead costs incurred: Indirect materials ....................................................................................
> Dillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. At the beginning of the year, it was estimated that the company w
> Leeds Architectural Consultants began operations on January 2. The following activity was recorded in the company’s Work in Process account for the first month of operations: Leeds Architectural Consultants is a service firm, so the n
> The Polaris Company uses a job-order costing system. The following data relate to October, the first month of the company’s fiscal year. a. Raw materials purchased on account, $210,000. b. Raw materials issued to production, $190,000 ($178,000 direct mat
> A company assigns overhead cost to completed jobs on the basis of 125% of direct labor cost. The job cost sheet for Job 313 shows that $10,000 in direct materials has been used on the job and that $12,000 in direct labor cost has been incurred. A total o
> Harwood Company uses a job-order costing system. Overhead costs are applied to jobs on the basis of machine-hours. At the beginning of the year, management estimated that the company would incur $192,000 in manufacturing overhead costs and work 80,000 ma
> The following information is taken from the accounts of Latta Company. The entries in the T-accounts are summaries of the transactions that affected those accounts during the year The overhead that had been applied to production during the year is dist
> Estimated cost and operating data for three companies for the upcoming year follow: Predetermined overhead rates are computed using the following allocation bases in the three companies: ___________________Allocation Base Company X.....................
> Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during the current period, shows charges of $5,000 for direct materials, $8,000 for direct labor, and $6,000 for overhead on its job
> Refer to the data for Hanna Corporation in Brief Exercise 13–2. In Brief Exercise 13–2 For the just completed year, Hanna Company had a net income of $35,000. Balances in the company’s current asset
> If the units produced exceed unit sales, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why?
> Refer to the financial statements for Rusco Products in Problem 13–11A. Because the Cash account decreased so dramatically during 2009, the company’s executive committee is anxious to see how the income statement would
> Refer to the financial statement data for Joyner Company in Problem 13–9A. Sam Conway, president of the company, considers $15,000 to be the minimum cash balance for operating purposes. As can be seen from the balance sheet data, only $
> Refer to the financial statement data for Weaver Company in Problem 13–8A. In Problem 13–8A Comparative financial statements for Weaver Company follow: During 2009, the company sold some equipment for $20 that had c
> Refer to the data for Pavolik Company in Exercise 13–6. In Exercise 13–6 The following changes took place during the year in Pavolik Company’s balance sheet accounts: Long-term investments that had
> Wiley Company’s income statement for Year 2 follows: Sales ........................................................... $150,000 Cost of goods sold ......................................... 90,000 Gross margin ...........................
> Refer to the data for Carmono Company in Exercise 13–5. In Exercise 13–5 Comparative financial statement data for Carmono Company follow: For 2009, the company reported net income as follows: Sales .................
> Refer to the data for Hanna Company in Brief Exercise 13–2. The company’s income statement for the year appears below: Sales ................................................................... $350,000 Cost of goods so
> Supply the missing data in the following cases. Each case is independent of the others. Case 1 3 Schedule of Cost of Goods Manufactured Direct materials.. $4,500 $6,000 $3,000 $5,000 $7,000 $3,000 $4,000 $9,000 Direct labor. ? Manufacturing overhead
> Selected account balances for the year ended December 31 are provided below for Superior Company: Selling and administrative salaries ................ $110,000 Purchases of raw materials ........................... $290,000 Direct labor..................
> Staci Valek began dabbling in pottery several years ago as a hobby. Her work is quite creative, and it has been so popular with friends and others that she has decided to quit her job with an aerospace company and manufacture pottery full time. The salar
> What are the arguments in favor of treating fixed manufacturing overhead costs as period costs?
> The Dorilane Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The set enjoys great popularity, and the company has ample orders to keep production going at its full capacity of 2,000 sets per year. Ann
> Various cost and sales data for Meriwell Company for the just completed year appear in the worksheet below: Of the $105,000 of manufacturing overhead, $15,000 is variable and $90,000 is fixed. Required: 1. Prepare a schedule of cost of goods manufactu
> You have just been hired by Ogden Company to fill a new position that was created in response to rapid growth in sales. It is your responsibility to coordinate shipments of finished goods from the factory to distribution warehouses located in various par
> Swift Company was organized on March 1 of the current year. After five months of start-up losses, management had expected to earn a profit during August. Management was disappointed, however, when the income statement for August also showed a loss. Augus
> Various costs associated with the operation of factories are given below: 1. Electricity to run production equipment. 2. Rent on a factory building. 3. Cloth used to make drapes. 4. Production superintendent’s salary. 5. Wages of l
> Wollogong Group Ltd. of New South Wales, Australia, acquired its factory building about 10 years ago. For several years, the company has rented out a small annex attached to the rear of the building. The company has received a rental income of $30,000 pe
> Listed below are costs found in various organizations. 1. Property taxes, factory. 2. Boxes used for packaging detergent produced by the company. 3. Salespersons’ commissions. 4. Supervisor’s salary, factory. 5. D
> The Devon Motor Company produces motorcycles. During April, the company purchased 8,000 batteries at a cost of $10 per battery. Devon withdrew 7,600 batteries from the storeroom during the month. Of these, 100 were used to replace batteries in motorcycle
> The following cost and inventory data are taken from the accounting records of Mason Company for the year just completed: Costs incurred: Direct labor cost ........................................ $70,000 Purchases of raw materials..................... $
> Below are listed various costs that are found in organizations. 1. Hamburger buns in a Wendy’s outlet. 2. Advertising by a dental office. 3. Apples processed and canned by Del Monte. 4. Shipping canned apples from a Del Monte plant
> What are the arguments in favor of treating fixed manufacturing overhead costs as product costs?
> Following are a number of cost terms introduced in the chapter: Variable cost Fixed cost Prime cost Opportunity cost Product cost Sunk cost Conversion cost Period cost Required: Choose the term or terms above that most appropriately describe the cost i
> Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. The hospital’s Radiology Department is considering replacing an old inefficient X-ray machine with
