Question: Leeds Architectural Consultants began operations on
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 names of the accounts it uses are different from the names used in manufacturing companies. Costs of Subcontracted Work is comparable to Direct Materials; Direct Staff Costs is the same as Direct Labor; Studio Overhead is the same as Manufacturing Overhead; and Completed Projects is the same as Finished Goods. Apart from the difference in terms, the accounting methods used by the company are identical to the methods used by manufacturing companies.
Leeds Architectural Consultants uses a job-order costing system and applies studio overhead to Work in Process on the basis of direct staff costs. At the end of January, only one job was still in process. This job (Lexington Gardens Project) had been charged with $6,500 in direct staff costs.
Required:
1. Compute the predetermined overhead rate that was in use during January.
2. Complete the following job cost sheet for the partially completed Lexington Gardens Project.
Job Cost Sheet—Lexington Gardens Project
As of January 31
Costs of subcontracted work............................................ $ ?
Direct staff costs.................................................................. ?
Studio overhead................................................................... ?
Total cost to January 31 ................................................... $ ?
Transcribed Image Text:
Work in Process 230,000 To completed projects 75,000 120,000 Costs of subcontracted work 390,000 Direct staff costs Studio overhead
> 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
> 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 t
> 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
> 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
> Below are costs and measures of activity in a variety of organizations. Required: Classify each cost as variable or fixed with respect to the indicated measure of activity by placing an X in the appropriate column. Cost Behavior Cost Measure of A
> Lompac Products manufactures a variety of products in its factory. Data for the most recent month’s operations appear below: Beginning raw materials inventory ................ $60,000 Purchases of raw materials........................... $690,000 Ending
> Lompac Products manufactures a variety of products in its factory. Data for the most recent month’s operations appear below: Beginning raw materials inventory ............... $60,000 Purchases of raw materials ......................... $690,000 Ending r
> Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a
> The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are
> A number of terms that relate to organizations, the work of management, and the role of managerial accounting are listed below: Budgets Directing and motivating Financial accounting Performance report Precision Controller Feedback Managerial accounting
> Selzik Company makes super-premium cake mixes that go through two processing departments, Blending and Packaging. The following activity was recorded in the Blending Department during July: Production data: Units in process, July 1 (materials 100% comple
> There is often more than one way to improve a performance measure. Unfortunately, some of the actions taken by managers to make their performance look better may actually harm the organization. For example, suppose the marketing department is held respon
> Refer to the data for the Blending Department of Sunspot Beverages, Ltd., in Problem 4–13A. Assume that the company uses the FIFO method rather than the weighted-average method in its process costing system. In Problem 4â€&#
> Refer to the data for Alaskan Fisheries, Inc., in Exercise 4–12. In Exercise 4–12 Alaskan Fisheries, Inc., processes salmon for various distributors. Two departments are involved— Cleaning and Packin
> Jarvene Corporation uses the FIFO method in its process costing system. The following data are for the most recent month of operations in one of the company’s processing departments: Units in beginning inventory ........................
> Refer to the data for Hielta Oy in Exercise 4–7. Assume that the company uses the FIFO method in its process costing system. In Exercise 4–7 Hielta Oy, a Finnish company, processes wood pulp for various manufacturers
> Refer to the data for Pureform, Inc., in Exercise 4–8. In Exercise 4–8 Pureform, Inc., manufactures a product that passes through two departments. Data for a recent month for the first department follow: The beginni
> MediSecure, Inc., produces clear plastic containers for pharmacies in a process that starts in the Molding Department. Data concerning that department’s operations in the most recent period appear below: Beginning work in process: Units in process…......
> Data concerning a recent period’s activity in the Assembly Department, the first processing department in a company that uses process costing, appear below: A total of 26,000 units were completed and transferred to the next processing
> Superior Micro Products uses the FIFO method in its process costing system. Data for the Assembly Department for May appear below: Required: Compute the cost per equivalent unit for materials, labor, overhead, and in total. Materials Labor Overhead
> Refer to the data for Clonex Labs, Inc., in Brief Exercise 4–2. In Brief Exercise 4–2 Clonex Labs, Inc., uses a process costing system. The following data are available for one department for October: The department
> Explain how fixed manufacturing overhead costs are shifted from one period to another under absorption costing.
> High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first mont
