ACCT 211-Echo Sports Company produces home basketball

ACCT 211-Echo Sports Company produces home basketball

Subject: Business    / Accounting
Question
Echo Sports Company produces home basketball goal systems consisting of a stand, backboard, rim, and net. The
company has sufficient orders and capacity to produce 800 goal systems per month. Manufacturing costs and other
costs are shown below:
Administrative salary
Depreciation on office equipment
Depreciation on production equipment
Electric and other factory utilities
Factory supervisor salary
Fiberglass backboards purchased from another manufacturer
Insurance on factory building and contents
Maintenance costs on factory equipment
Nets and rims purchased from another manufacturer
Rent on factory building
Sales commissions
Steel pipe for stand fabrication
Supplies for administrative office 2,400.00
400.00
1,800.00
1,400.00
2,000.00
30,400.00
600.00
1,200.00
6,400.00
2,000.00
1,600.00
14,920.00
600.00 Wages for production workers 14,720.00
$ 80,440.00 Please verify my answers starting Row 24 to Row 57, Thanks
Enter each manufacturing cost in the appropriate column. Leave blank if it does not fit in any column.
Direct
Materials
Administrative salary
Depreciation on office equipment
Depreciation on production equipment
Electric and other factory utilities
Factory supervisor salary
Fiberglass backboards purchased from another manufacturer
Insurance on factory building and contents
Maintenance costs on factory equipment
Nets and rims purchased from another manufacturer
Rent on factory building
Sales commissions
Steel pipe for stand fabrication
Supplies for administrative office
Wages for production workers
Totals Direct
Labor 30,400.00 6,400.00 14,920.00
14,720.00
$ 51,720.00 $ 14,720.00 Compute the cost to produce 1 basketball goal system (cost per unit):
Direct materials
$ 51,720.00
Direct labor
14,720.00
Overhead
9,000.00
Total manufacturing costs
75,440.00
Units of production
800
Cost per unit
$
94.30
What will the cost per unit be if we increase production by 100 units with a proportional cost
increase for direct materials and direct labor, but no increase in overhead cost?
Direct materials
$ 58,185.00 Original divided by 800, multiplied by 900
Direct labor
16,560.00 Original divided by 800, multiplied by 900
Overhead
9,000.00 Does not change based on production
Total manufacturing costs
83,745.00
Units of production
900
Cost per unit
$
93.05 rd, rim, and net. The
cturing costs and other Manufacturing
Overhead 1,800.00
1,400.00
2,000.00
600.00
1,200.00
2,000.00 $ 9,000.00 al divided by 800, multiplied by 900
al divided by 800, multiplied by 900
not change based on production Job Costing
Elite Custom Cabinetry Company produces custom cabinet order to exact
measure based off CAD drawings provided by kitchen remodeling firms:
As of June 1, there was one order in production (job 5-3) and two new jobs
were started in June (jobs 6-1 and 6-2).
Job 5-3 had incurred costs as follows prior to the month of June: direct
material $4,600; direct labor $6,550, overhead $3,400
There were no finished goods as orders ship out upon completion. Raw
material inventory was $18,600 as of June 1.
The following events occurred during June:
1. Purchased additional raw materials of $20,000.
2. Incurred direct labor hours of 640 hours at a rate of $24.00 during the month of June.
3. Incurred total manufacturing overhead costs of $18,400 during the month of June.
4. Assigned Direct materials and direct labor hours to jobs as follows:
Actual
Materials
Hours
Job 5-3
2,300
112
Job 6-1
8,700
320
Job 6-2
5,420
208
Totals
16,420
640
5. The company uses direct labor hours to assign overhead to individual jobs, and the predetermined
overhead rate is $28.00 per hour, based on the budget of 600 labor hours per month.
6. Jobs 5-3 and 6-1 are completed and shipped in the month of June. Job 6-2 is in progress at month end.
A.
B.
C.
D. Calculate the completed cost of jobs 5-3 and 6-1.
Calculate the cost of work in process (job 6-2).
Calculate over or under applied overhead for hours worked and rate per hour.
Calculate the actual overhead rate per hour. Please verify my answers starting Row 33 to Row 67, Thanks
PART A
Job 5-3
Work in Process
Additional materials
Additional direct labor
Additional overhead applied
Total cost of completed job $ 14,550
2,300
2,688 112 hours *$24
3,136 112 hours $28
22,674 Job 6-1
Direct materials
Direct labor
Overhead applied
Total cost of completed job $ 8,700
7,680 320 hours * $24
8,960 320 hours * $28
25,340 PART B
Job 6-2
Direct materials
Direct labor
Overhead applied
Total cost of work in process 5,420
4,992
5,824
16,236 PART C
Total overhead incurred
Total overhead applied
Under applied overhead 18,400
17,920
480 PART d
Actual overhead rate:
Total actual overhead cost
Total hours direct labor
Cost per direct labor hour 18,400
640
28.75 Process Job Costing and Equivalent Units of Production
Bay Manufacturing produces paint. The company has two processes: mixing and packaging.
The ingredients for the paint are mixed in large batches and then transferred to the packaging
department, where one-gallon cans are filled, capped, labeled, and boxed.
There was no work in process on February 1. The materials are all brought to the packaging department up front
and charged to the job. Nothing is transferred to finished goods until the entire job is complete. The
materials costs include the packaging, material, and the cost transferred from the mixing department.
On February 2, 15,000 gallons (job 2-1) were transferred into the packaging department from the
mixing department and completed on February 19.
The costs incurred to complete job 2-1 in the packaging department are as follows:
Materials
56,250
Labor
11,250
Overhead (applied based on direct labor hours)
7,500
On February 20, another 20,000 gallons (job 2-2) were transferred into the packaging department.
Job 2-2 was 50% complete as to labor at the end of the month.
The costs incurred (unit cost unchanged from job 2-1) to complete job 2-2 in the packaging
department are as follows:
Materials
75,000
Labor
15,000
Overhead (applied based on direct labor hours)
10,000
INSTRUCTIONS:
1. Compute the physical units of production.
2. Compute the cost per unit to complete packaging for labor, materials, overhead, and total.
3. Compute equivalent units and cost of work in process as of the end of February.
4. Record journal entries for:
a. the movement of materials from materials inventory to each job b. the allocation of payroll to each job
c. the application of overhead to each job
d. the movement of work in process to finished goods Please verify my answers starting Row 39 to Row 77, Thanks
Part 1:
Units to be accounted for:
Work in process
Started in production
Total units
Units accounted for:
Completed and transferred out
Work in process
Total units
Part 2:
Total costs to be incurred, job 2-1
Units
Cost per unit to be incurred
Part 3:
Work in process, February 28
Equivalent units
20,000 units transferred in
Costs incurred
Equivalent gallons
Cost per unit
Total cost in WIP February 28 Units
35,000
35,000
15,000
20,000
35,000 $ $ Material
56,250
15,000
3.75 $ Labor
Overhead
11,250
7,500
###
15,000
0.75 $
0.50 $ Total Material
20,000
100%
20,000
3.75 $
75,000 Labor Total Overhead
###
20,000
50%
50%
10,000
10,000
0.75 $
0.50
7,500
5,000 5.00 87,500 Part 4:
Work in process, job 2-1
Work in process, job 2-2
Materials inventory Debit
56,250
75,000 Work in process, job 2-1
Work in process, job 2-2
Payroll Summary 11,250
7,500 Work in process, job 2-1
Work in process, job 2-2
Overhead 7,500
5,000 Finished goods inventory
Work in process, job 2-1 Credit 131,250 18,750 12,500
75,000
75,000