Question: PlastiCo produces plastic pipe to customer

> Octavia Corp.’s products are manufactured in three separate departments: Molding, Curing, and Finishing. Materials are introduced in Molding; additional material is added in Curing. The following information is available for the Curing

> Waltham Mfg. makes skateboards and uses a weighted average process costing system. On May 1, 2010, the company had 400 boards in process that were 70 percent complete as to material and 85 percent complete as to conversion. During the month, 3,800 additi

> BeGone manufactures spray cans of insect repellent. On August 1, 2010, the company had 9,800 units in the beginning WIP Inventory that were 100 percent complete as to canisters, 60 percent complete as to other materials, 40 percent complete as to direct

> Pylonic Mfg. produces concrete garden border sections. All material is added at the beginning of processing. Production and cost information for May 2010 are as follows: WA EUP Direct material ……………………………………………160,000 sections Direct labor ……………………………………

> Assume that Rojo Inc. in Exercise 24 had 7,200 EUP for direct material in October’s beginning WIP Inventory, 8,000 EUP for direct labor, and 7,920 EUP for overhead. What was the October FIFO cost per EUP for direct material, direct labor, and overhead?

> In October 2010, Rojo Inc.’s production was 53,600 equivalent units for direct material, 48,800 equivalent units for direct labor, and 42,000 equivalent units for overhead. During October, direct material, conversion, and overhead costs incurred were as

> On April 30, 2010, Alvira Co. had 21,600 units in process that were 85 percent complete as to material, 60 percent complete as to direct labor, and 45 percent complete as to overhead. During May, 561,000 units were started. The 13,700 units in ending inv

> Bon Voyage provides charter cruises in the eastern Caribbean. Tina Louise, the owner, wants to understand how her labor costs change per month. She recognizes that the cost is neither strictly fixed nor strictly variable. She has gathered the following i

> Ynugai Corp. uses a process costing system to assign costs to its steel production. During March 2010, Ynugai had beginning Work in Process Inventory of 180,000 tons of steel (100 percent complete as to material and 65 percent complete as to conversion).

> Funtime Inc. makes small toys in a one-department production process. Plastic is added at the beginning of the process; all other materials are considered indirect. The following information is available relative to September 2010 production activities:

> Using the information in Exercise 4 and assuming a FIFO method of process costing, determine the equivalent units of production for labor and overhead. Data given in Exercise 4: For each of the following situations, use the weighted average method to de

> Assume that O’Malley Corp. in Exercise 16 uses the FIFO method of process costing. a. What are the equivalent units of production for direct material? b. What are the equivalent units of production for conversion? Data from Exercise 16 O’Malley Corp. us

> Assume that Trevano Corp. in Exercise 15 uses the FIFO method of process costing. a. What proportion of work needs to be performed on the beginning inventory units to complete them? b. What are the equivalent units of production for direct material? c. W

> For each of the following situations, use the weighted average method to determine the equivalent units of production for labor and overhead, assuming that they are continuously at the same percentage of completion: a. Beginning WIP Inventory (45% comple

> O’Malley Corp. uses a weighted average process costing system. Material is added at the beginning of the production process and overhead is applied on the basis of direct labor. O’Malley’s records indicate that 70,000 units were in process at the beginni

> In manufacturing its products, Trevano Corp. adds all direct material at the beginning of the production process. The company’s direct labor and overhead are considered to be continuously at the same degree of completion. September production information

> Hebert Industries uses a weighted average process costing system. Management has specified that the normal loss from shrinkage cannot exceed 3 percent of the units started in a period. All raw material is added at the start of the production process. Spo

> Oehkle Inc. produces paint in a process in which spoilage occurs continually. Spoilage of 2 percent or fewer of the gallons of raw material placed into production is considered normal. The following operating statistics are available for June 2010: Begin

> Green Shade manufactures insulated windows. The firm’s repair and maintenance (R&M) cost is mixed and varies most directly with machine hours worked. The following data have been gathered from recent operations: a. Use the high&acir

> Pat Koontz makes necklaces from glass beads, metal beads, and natural beads. After reading about hybrid costing, she realized that the different types of necklaces did not cost the same amount of money to make, even though they took the same amount of ti

> Batwings makes one-size-fits-most capes. Each cape goes through the same conversion process, but three types of fabric (Dacron, denim, and cotton) are available. The company uses a standard costing system, and standard costs for each type of cape follow.

> Najm Company uses a standard costing system to account for its pita bread manufacturing process. The bread is sold in packages of one dozen pieces. The company has set the following cost standards for each package: Direct material—ingredients …………………………$

> Alberton Co. uses a standard costing system to account for its production of toys. Plastic is added at the start of production; labor and overhead are incurred at equal rates throughout the process. The standard cost of one toy is as follows: Direct mate

> Baum Co. has two processing departments: Fabrication and Assembly. In the Fabrication Department, metal is cut and formed into various components, which are then transferred to Assembly. The components are welded, polished, and coated with sealant in the

> Use the information in Exercise 36 and assume that Lamb Inc. uses the FIFO method of process costing. For the Assembly Department, compute the following: a. equivalent units of production for each cost component b. cost per EUP for each cost component c.

> Lamb Inc. produces calendars in a two-process, two-department operation. In the Printing Department, calendars are printed and cut. In the Assembly Department, the material received from Printing is assembled into individual calendars and bound. Each dep

> Found Sound Company mass-produces miniature speakers for personal sound systems. The following cost information is available for June 2010: Beginning inventory direct material cost …………………………$ 4,133.20 Beginning inventory conversion cost …………………………………….8

> In November 2010, Angerstein Co. computed its equivalent unit costs under FIFO process costing as follows: Direct material ………………………….$29.50 Packaging …………………………………….3.00 Direct labor …………………………………10.84 Overhead ………………………………………7.68 Direct material and pa

> In October 2010, Tibbetts Company had the following production and cost data: Beginning inventory units (80% complete as to DM; 45% complete as to DL; 30% complete as to OH)……………………….42,600 October completed production ……….………………………………………1,570,000 Units

> Wisconsin Dairy determined that the total predetermined OH rate for costing purposes is $26.80 per cow per day (referred to as an animal day). Of this, $25.20 is the variable portion. Overhead cost information for two levels of activity within the releva

> During August 2010, Berman Company’s Department Y equivalent unit product costs, computed under the weighted average method, were as follows: Material …………………………$2 Conversion ………………………6 Transferred in ……………….10 All material is introduced at the end of th

> The following production and cost per EUP data are available for Vendome Corp. for February 2010: Units completed during February ……………………………………………………390,000 Units in ending inventory (100% complete as to direct material; 30% complete as to direct labor;

> Use the information in Exercise 15 except assume that Waltham Mfg. uses FIFO costing. Prepare a schedule showing the August 2010 computation of FIFO equivalent units of production and cost per equivalent unit. Data given in Exercise 15: Waltham Mfg. mak

> Use the information in Exercise 27 except assume that BeGone uses FIFO process costing. Prepare a schedule showing the BeGone August 2010 computation of FIFO equivalent units of production and cost per equivalent unit. Data given in Exercise 27: BeGone

> In a team of three or four people, choose a company whose mass production process you would like to study. Use the library, the Internet, and (if possible) personal resources to gather information. Prepare a visual representation (similar to Exhibit 6&ac

> How can information produced by a job order costing system assist managers in operating their firms more efficiently?

> In choosing a product costing system, what are the three valuation method alternatives? Explain how these methods differ.

> In choosing a product costing system, what are the two choices available for a cost accumulation system? How do these systems differ?

> Why are normal and abnormal spoilage accounted for differently? Typically, how does one determine which spoilage is normal and which is abnormal?

> If normal spoilage is generally anticipated to occur on all jobs, how should the cost of that spoilage be treated?

> Grand Island Brake Co. budgeted the following variable and fixed overhead costs for 2010: Variable indirect labor …………………………………………$100,000 Variable indirect materials ………………………………………20,000 Variable utilities ………………………………………………………80,000 Variable portion o

> How can the variance information provided by standard costing be used to improve cost control?

> In using standard costing in a job order costing system, are standards established for material and labor costs and quantities?

> In a job order costing system, what key documents support the cost accumulation process and what is the purpose of each?

> Production data for the first week in November 2010 for Florida Fabricators were as follows: Finished Goods Inventory, Nov. 1: $23,800 Finished Goods Inventory, Nov. 5: $0 Direct labor hours worked in the first week of November were 680 at a cost of $15

> Stockman Co. began 2010 with three jobs in process: During 2010, the following transactions occurred: 1. The firm purchased and paid for $542,000 of raw material. 2. Factory payroll records revealed the following: • Indirect labor incur

> Ialani Corp. uses a job order costing system for the yachts it constructs. On September 1, 2010, the company had the following account balances: Raw Material Inventory …………………………………$ 332,400 Work in Process Inventory ………………………………1,512,600 Cost of Goods S

> Polaski Inc. uses an actual cost, job order system. The following transactions are for August 2010. At the beginning of the month, Direct Material Inventory was $2,000, Work in Process Inventory was $10,500, and Finished Goods Inventory was $6,500. • Dir

> Summer Shade installs awnings on residential and commercial structures. The company had the following transactions for February 2010: • Purchased $790,000 of building (raw) material on account. • Issued $570,000 of building (direct) material to jobs. • I

> Prudoe Compounds produces a variety of chemicals that are used by auto manufacturers in their painting processes. With each batch of chemicals produced, some spoilage naturally occurs. Prudoe Compounds includes normal spoilage cost in its predetermined O

> Because your professor is scheduled to address a national professional meeting at the time your class ordinarily meets, the class has been divided into teams to discuss selected issues. Your team’s assignment is to prepare a report arguing whether fixed

> One of the main rationales for using a job order costing system is to achieve profitability by charging a price for each job that is proportionate to the related costs. The fundamental underlying concept is that the buyer of the product should be charged

> Timbuk2 is a San Francisco company that makes a variety of messenger, cyclist, and laptop bags. The company’s Web site (Timbuk2.com) allows customers to design their own size, color, and fabric bags with specific features and accessories; then the compan

> Two types of contracts are commonly used when private firms contract to provide services to governmental agencies: cost-plus and fixed-price contracts. The cost-plus contract allows the contracting firm to recover the costs associated with providing the

> During July 2010, Pull-Along worked on two production runs ( Jobs #918 and #2002) of the same product, a trailer hitch component. Job #918 consisted of 1,200 units of the product, and Job #2002 contained 2,000 units. The hitch components are made from 1/

> Modern Convenience specializes in making robotic conveyor systems to move materials within a factory. Model #89 accounts for approximately 60 percent of the company’s annual sales. Because the company has produced and expects to continue to produce a sig

> Pip Squeaks Inc. is a manufacturer of furnishings for infants and children. The company uses a job order cost system. Pip Squeaks’ Work in Process Inventory on April 30, 2010, consisted of the following jobs: The companyâ€&#1

> Lincoln Construction Company builds bridges. In October and November 2010, the firm worked exclusively on a bridge spanning the Calamus River in northern Nebraska. Lincoln Construction’s Precast Department builds structural elements of the bridges in tem

> Gigi LeBlanc is an advertising consultant who tracks costs for her jobs using a job order costing system. During September, LeBlanc and her staff worked on and completed jobs for the following companies: Direct material can be traced to each job because

> Edward Nabors owns Enclose, which designs and manufactures perimeter fencing for large retail and commercial buildings. Each job goes through three stages: design, production, and installation. Three jobs were started and completed during the first week

> All jobs at Frankfurt Inc., which uses a job order costing system, go through two departments (Fabrication and Assembly). Overhead is applied to jobs based on machine hours in Fabrication and on labor hours in Assembly. In December 2009, corporate manage

> Porta Light manufactures a highquality LED flashlight for home/office use. Data pertaining to the company’s 2010 operations are as follows: Production for the year …………………………………………………45,000 units Sales for the year (sales price per unit, $8) ……………………..48

> You have applied for a cost accounting position with Chelsea Containers. The company controller has asked all candidates to take a quiz to demonstrate their knowledge of job order costing. Chelsea’s job order costing system is based on

> On September 25, 2010, a hurricane destroyed the work in process inventory of Biloxi Corporation. At that time, the company was in the process of manufacturing two custom jobs (B325 and Q428). Although all of Biloxi’s on-site accounting records were dest

> Blaine Corp. makes floats for Mardi Gras in New Orleans. The company’s fiscal year ends on March 31. On January 1, 2010, the company’s WIP Inventory account appeared as follows: The direct labor cost contained in the b

> The following costs were incurred in February 2010 by Container Corp., which produces customized steel storage bins: The balance in Work in Process Inventory on February 1 was $16,800, which consisted of $11,200 for Job #217 and $5,600 for Job #218. The

> Croftmark Co. began operations on May 1, 2010. Its Work in Process Inventory account on May 31 appeared as follows: The company applies overhead on the basis of direct labor cost. Only one job was still in process on May 31. That job had $75,450 in direc

> Nottaway Flooring produces custom-made floor tiles. The company’s Raw Material Inventory account contains both direct and indirect materials. Until the end of April 2010, the company worked solely on a large job (#4263) for a major client. Near the end o

> Salem Corp. contracted for a specialized production machine from Quindo Industries, a tool company. The contract specified a price equal to “production cost plus 15% of production cost.” A sales executive at Quindo told Salem’s management that the machin

> Calista London, after spending 20 years working for a large engineering firm, has decided to start her own business. She has designed a product to remove jar lids with minimal physical effort. London believes this product will sell 1 million units per ye

> Describe how the following occurrences should be accounted for based on the fact pattern presented: a. Certain amounts of spoilage and waste are normal in the production system and affect all jobs. b. A certain amount of spoilage occurs that is unique to

> Canyon City Co. uses a job order costing system that combines actual direct material and actual direct labor costs with a predetermined overhead charge based on machine hours. Expected overhead and machine hours of $1,421,000 and 145,000, respectively,

> The April 2010 income statement for Fabio’s Fashions has just been received by Diana Caffrey, Vice-President of Marketing. The firm uses a variable costing system for internal reporting purposes. The following notes were attached to the

> La Mia’s Casas builds replicas of residences of famous and infamous people. The company is highly automated, and the new accountant owner has decided to use machine hours as the basis for predicting maintenance costs. The following data are available fro

> At the beginning of the year, Hallett Company estimated the following: Now, assume that Hallett has decided to use a plant wide overhead rate based on direct labor hours. Required: 1. Calculate the predetermined plant wide overhead rate. (Note: Round

> Manzer Enterprises produces premier raspberry jam. Output is measured in pints. Manzer uses the weighted average method. During January, Manzer had the following production data: Units in process, January 1, 60% complete ………………………………. 36,000 pints Units

> At the end of the year, Ilberg Company provided the following actual information: Overhead ……………………………………….. $423,600 Direct labor cost ……………………………….. 532,000 Ilberg uses normal costing and applies overhead at the rate of 80% of direct labor cost. At t

> At the beginning of the year, Ilberg Company estimated the following costs: Overhead …………………………………………. $416,000 Direct labor cost …………………………………. 520,000 Ilberg uses normal costing and applies overhead on the basis of direct labor cost. (Direct labor co

> Patrick Inc. sells industrial solvents in five-gallon drums. Patrick expects the following units to be sold in the first three months of the coming year: January ………………………… 41,000 February ………………………. 38,000 March ………………………….. 50,000 The average price f

> Golding’s finishing department had the following data for July: Required: 1. Calculate unit costs for the following categories: transferred-in, materials, and conversion. 2. Calculate total unit cost. Transferred-In Materials Conv

> La Cucina Company sells kitchen supplies and housewares. Lava stone is used in production of molcajetes (mortars and pestles used in the making of guacamole) and is purchased from external suppliers. Each year, 8,000 pounds of lava stone is used; it is u

> Inchon produced 312,000 units last year. The information on the actual costs and budgeted costs at actual production of four activities follows. Required: Prepare an activity-based performance report for the four activities for the past year. Activ

> Fermi Company decided to look more closely at the materials receiving activity in its factory. The driver for receiving is the number of receiving orders. The following information for a year was collected: Demand for receiving orders: 130,000 Resources

> Terry Linens Inc. manufactures bed and bath linens. The bath linens department sews terry cloth into towels of various sizes. Terry uses the weighted average method. All materials are added at the beginning of the process. The following data are for the

> Nelrok Company manufactures fertilizer. Department 1 mixes the chemicals required for the fertilizer. The following data are for the year: BWIP (40% complete) ……………………………. 25,000 Units started ………………………………………… 142,500 Units in EWIP (60% complete) ………………

> Aqua-pro Inc. produces submersible water pumps for ponds and cisterns. The unit sales for selected months of the year are as follows: Unit Sales April ……………………………. 180,000 May ……………………………. 220,000 June ………………………….. 200,000 July ……………………………. 240,000

> Palladium Inc. produces a variety of household cleaning products. Palladium’s controller has developed standard costs for the following four overhead items: Next year, Palladium expects production to require 90,000 direct labor hours.

> Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data

> Goforth Company produces a product where all manufacturing inputs are applied uniformly. Goforth produced the following physical flow schedule for April: Units to account for: Units in BWIP (40% complete) ………………………………… 180,000 Units started ………………………………

> a. Dr. Jones, a dentist, wants to increase the size and profitability of his business by building a reputation for quality and timely service. b. To achieve this, he plans on adding a dental laboratory to his building so that crowns, bridges, and denture

> Verde Company produces wheels for bicycles. During the year, 660,000 wheels were produced. The actual labor used was 360,000 hours at $9.50 per hour. Verde has the following labor standard: 0.5 hour at $10. Required: 1. Compute the labor rate variance.

> When a job costing $2,000 is finished but not sold, the following journal entry is made: a. Cost of Goods Sold 2,000 Finished Goods 2,000 b. Finished Goods 2,000 Cost of Goods Sold 2,000 c. Finished Goods 2,000 Work in Process 2,000 d. Work in Proce

> Lane Company produced 50,000 units during its first year of operations and sold 47,300 at $12 per unit. The company chose practical activity—at 50,000 units—to compute its predetermined overhead rate. Manufacturing costs are as follows: Direct materials

> Lawson Company produces a product where all manufacturing inputs are applied uniformly. Lawson produced the following physical flow schedule for March: Units to account for: Units in BWIP (40% complete) …………….... 15,000 Units started ………………………………………… 35

> Madison Company decided to look more closely at the inspection activity in its factory. The following information for a year was collected: Demand for inspections: 170,000 Resources needed: a. 6 inspectors, capable of inspecting 30,000 units per year; s

> Smokey Company provided the following information: Standard variable overhead rate (SVOR) per direct labor hour …………… $3.70 Actual variable overhead costs: Inspection ……………………………………………………………………………………… $112,300 Power …………………………………………………………………………………………….

> Bowling Company budgeted the following amounts: Variable costs of production: Direct materials ………………………… 3 pounds @ $0.60 per pound Direct labor ……………………………………. 0.5 hr. @ $16.00 per hour VOH …………………….………………………………………… 0.5 hr. @ $2.20 FOH: Materials hand

> Frasco Inc. produces plastic bottles. Each bottle has a standard labor requirement of 0.025 hours. During the month of April, 750,000 bottles were produced using 21,000 labor hours @ $10.00. The standard wage rate is $9.50 per hour. Required: Calculate

> Lata Inc. produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.5 ounces of aluminum per can. During the month of April, 300,000 cans were produced using 1,250,000 ounces of aluminum. The actual cost of aluminum was $0.09

> During the last six weeks, the actual costs of materials for Mandarin Company were as follows: The standard materials cost for each week was $50,000 with an allowable deviation of ±5,000. Required: Plot the actual costs over time against