Week Answer 1

Out of the information give, period cost includes:

Selling cost - $5000
Indirect Labor - $7000
Administrative cost - $10,000

So, period cost = $ 5000 + $ 7000 + $ 10,000

= $ 22,000
Week Answer 2

Range of operation = 2,500 units to 10,000 units

per unit cost for activity 1: 5000 units at $17.0 per unit = 97,500
per unit cost for activity 2: 7,500 units at $13.0 per unit = 85,000

Solution:
Variable cost per unit = high cost – low cost / high cost per unit – low cost per unit
= 97,500 – 85,000 / 2,500
=5
Fixed cost = 97,500 – (5 * 5000) = $72,500
Variable cost = $5 * expected unit of production
= $5 * 7,000
= $35,000
Total cost = $72,500 + $35,000 = $107,500

Week Answer 3

Calculating the Actual direct labor hours as follows:

= Actual direct labour Cost / actual direct labour hour rate

= $80000/$8
= 10,000 direct labour hour

Applied factory overhead:

= Factory Overhead rate* Actual Direct labour hours

= $12 * 10000 hours

= $120000

The plant overheads that have been accrued are now higher than applied overhead. Thus
overheads are under applied by to $ 40 000, i.e. $160,000-$120000.

This under applied Overheads cost needs to be adjusted to Cost of Goods Sold Account. The
entry to transfer under applied overhead s to Cost of Goods sold will be:

Cost of Goods Sold a/c. Debit $40000

To Factory Overhead a/c Credit $40000

Weekly Answer 4
Fedora accounted for 170,000 units (100,000 + 70,000), the company must have started
108,000 units in May (170,000 - 62,000).

ii. Equivalent units for conversion cost total = [100,000 + (70,000 × 40%)].
= $128,000
iii. The conversion cost per equivalent unit = [($90,000 + $710,000) ÷ 128,000 units]
= $6.25

iv. Materials, $140,000 (70,000 × $2.00) + Conversion, $175,000 [(70,000 × 40%) × $6.25].
So, Ending work in process = $315,000

V. work-in-Process Inventory would have been credit to record Fedora’s completed production.

Week 5 Answer

The Calculation of predetermine overhead rate is shown in

Predetermined overhead rate = Budgeted overhead/Machine hours

Practical capacity = $2,160,000/480,000 Machine hours

= $4.5
Normal capacity = $2,160,000/432,000 machine hours
= $5
Budgeted capacity = $2,160,000/360,000 Machine hours
= $6

Predetermined overhead rate are as follows:

Practical capacity = $4.5
Normal capacity = $5
Budgeted capacity = $6