Problem 5-18 (60 miriutes) swcee 200,000 200,000 152,000 38,000 1b. Work in Process .a.ssseseses Manufacturing Overhead .. Raw Materials... 190,000 ©. Work in Process 160,000 Manufacturing Overhead .. 27,000 Sales Commissions Expense 36,000 Administrative Salaries Expense - 80,000 Salaries. and Wages Payable : 303,000 d. Manufacturing Overhead 42,000 ‘Accounts Payable... 42,000 e. Manufacturing Overhead 9,000 Insurance Expense. 1,000 Prepaid Insurance. 10,000 f. Advertising Expen: 50,000 Accounts Payable. 50,000 g.. Manufacturing Overhead 51,000 Depreciation Expense. 9,000 ‘Accumulated Depreciation 60,000 fhe Work in Pr00eS ssn 170,000 Manufacturing Overhead. 170,000 $153,000 36,000 MHS =$4.25 per MH; 40,000 MHsx$4.25 per MH=$170,000. i. Finished Goods . 480,000 Work in Process 480,000 J. Accounts Receivable. 700,000 Sales... 700,000 Cost of Goods Sold. 475,000 Finished Goods 475,000/ ff Acct323 Miatem Examination — Wo a / ee QUESTION 18MARKS 32 MINUTES ‘The following data were taken fom the roca of Cougs Enterprises, a Canadian mamafacture that usa job-order ‘costing system: “Workin Process, December 1 Sob Number vs __s80 inst materials 81,800 $2400 $1,500, Direct labour 1200 2,400 “600 ‘Applied averheed "400.1350 _450 ‘Total Gow Geis 550 ‘During Decenber, jobs sumabered 170 through 190 were worked on, andthe following costs were inured job Number 170,475 __180__185__190__‘otal Direct materials {$600 $ 900 $1,200 $1,350 $1,500 85/550 Direct labour ‘$750 $1,500 $3,000 $2250 $6,000. $13,500 Direct labour hours 50100 200150400900 ‘Addit information: 1. Totaloverinead costs ate applied to jobs om th basis of direct Iabour hours worked. Aft begiming ofthe sje, the company evinated that total overhead cot forthe your would be $150,000, andthe tal bour hours worked would be 12,500. 2. Actual avechead in the Manufacturing Overhead account at December 1 was $160,010. Ditest bout hours ‘yorker forthe previous months Gacurytheough November) were 11,250. 3, ‘There were n0jobsin finshed goods inventory on December 1. 4,” Mnufacating ovethead coat for December were as fllows (not yet recorded the books of we aunt): ‘Direct materials purchased $7500 Selaries: Production clerk 1,500 Plant supervisor 2,200 Amortization (plant and equipment) 2,490 Factory supplies 1,500 ‘Uiltes Gactory) 1.800 ‘Total sie.900 5, ‘The company waits offal over-or underappied overhead to Cost of Goods Soldat the end ofthe year. 6. Jobs munbered 170,180, 185 and 190 vere completed during December. Only Job 190 remsined in finished ool inventory on Devember 31,Problem 759 ork Monsurement;Coet Retimatlon sith Different holeesfen (Rot: Ineteestora who wish io corer all heen cost-etiaion meth ode wth i samo data sot msy aesign this problem in conjunction with the nes ‘0m, Nova Stotia Morine Supply is a wholesaler for lange variety of boating ‘and fishing equipment. The company’s eontzller, Mathew Knight, bas recently ‘completed a cost study of the firms materia-handing department in which ho ‘used work measurement to quantify the department aivty. Tho eantol factor ‘usieunod ithe workmeaaurement study was hundreds of pounds af eqsipment unloaded or loaded at the company’ lading dock, Koight enspled the following data, Control Facer Use Mati tng it ethatty Deparent Costs Jamaay ose 5 100 ceeeeeeeeees — $10004 ebay 2200 00 SND “nso March = SII gag CIID aaa’ pil IIT ooo SII. to200 May 20. CII 300 250 fae ccieeceasprsessscts 10D 7 11300 By shaepsovaatee 00 11700) agus : : 11330 September 1380 aber. 1050 ‘November 12100 Deventer | 400PROBLEM 8-9 HO miutee)34" P213 COST-VOLUM-PROMLT RELATIONSHIPS AND A RACE TRACK The Wester Race nck hore rac wack. evi dried mainly fom tena ads feed erage ofthe Being Is expe fr 0-day seen ar Wages of cies and ers Othe eens eee nani.) Pars Tiel pelos pid towing ces ‘The teicsmade acon with AP Te. tap cars A change dtc pe ey evaed that on the strag he fple sre in ea cn an af te steno ‘ured by prateautomeiles Th othr aed yt an public ‘The tet sour ofrereme re igh econo and venting ss900 ‘Alisioncatge(delontelylow) $4 perpetan 7x Passage odie amount of ets ad 10% 1. Assuming hates pron bet $27 nigh lew many pense to be add far the wake break ere othe season? : ', Wives ett eonsibution masa ae the bce 5 Ihe desired operating profit or the eit $700, how many people wold ha to smtend? 2 If policy of free adausion brought a 20 percen increase in attendance, what would be the ne level of operiting profit? Assume tat the previous lve! of cheno og £0,000 peopl 3. Hie ye wc dole in au to tre eer esp hs incu ate ‘hat woul! be de new breakeven pot? Ree io the igi! ie nd sec "hacetch penca bee S27 anight,| eet 38 ier sam — FOO QUESTIONS _ 20MARKS 36 MINUTES Shown below is the income statement for Larapton Green Industries for 1995 when 12,000 uals of production were sald: Lampton Green Industries ‘Income Statement for the year ended December 31, 1995 Seles 340,000 Coat of goods sold: ‘Materials 102,000 Direct abour 34000 Variable overhéad 75000 Fixed overead #5800 346,800 Grose rargin 193,200 ‘Varible sling and administration, $ 653,000 ‘ined sling and administration ~aoo00 143,000, . ‘Sso200 ‘During 1995, 12,800 units were produced, On January 1, 1995, there were 950 units in finished goods and no units in process, On December 31,1995, there were no units in proces Lampton Green uses «normal absorption costing system fo value inventories. Prices and cost stuture have remained stable forthe last 2 years, RIEQUIRED: 1. What was the total contibution margin for 19957 @ marks) 2, Prepare avaiable costing income statement for 1995. (7 marks)‘Ase325 Midterm Bram ~ FOO a QUESTIONS CONTINUED 3. Calculate the difference in net income wader absaption costing from that calculate using variable costing Discuss the implication ofthis difference. (4 marks) 4, Whatisthe value of ending inventory under: (6 marks) a, sbscption costing? be variable Costing iHRequired 1. Caloulate the predetermined MOH used to apply MOH to jobs. (2 marks) 2._ What isthe cost of worl in process inventory at Dec. 31? (4 matks) 3. Prepare a statement of cost of goods manufactured for Dee. (S mass) 4, Calculate the unadjusted COGS for December. (4 marks) 55. Caloulate the ovenfunder applied MOEL forthe year. (3 matks)[oration manufactures two types of cardboard boxes used in shipping canned fd, Tet tnd wpa Te ed abs te Ooo ne aa (yp Pr hae leaving materi and eu ‘ype tor e P Direct materiel por 100 bas Pager ($20 per pnd) ees... 30 rams. Tipo CComapting miu (10 per ound)... 20 pounds ponds Direct or eid per 100 boxe (61200 pero) cee 2 tao 0 be ‘The following manufactoring overhead costs are anticipated for 1947. The redotermined overhead rat is based on » production valum ef 98,000 vata for cach typeof box. Manufacturing everhoud fs applied on the bsis of diet labor hoors, niet materia S500 Inet aber : 00 Unies a ‘3900 Proper cer 1) : 13000 Insane 24000 Depreciation ‘The following inventory information is avilable toventry Aantary 1907 ted goods Box pec 10.00 exes. ‘5000 ors Bor pe P 22 2m.000 foxes 15000 bones ew mati: Paperboard 15,00 ponte 300 poms Comugating eon 5,00 puns 19900 ponds "Tho sales freest for 1947 isa follows: Sales ne Sate Pie Box ype 0,000 boxes $5 9000 per un bes Box ype P 50,000 boxes 130.00 per hone tet ‘The flowing sling and administrative expenses are anticipated for 18. Solis and fringe tenis ofos persona 60000 Advertsing 19000 “Manageme sis and ings beets 100000 Ciel wages ad ingens 35000 Micelianous adminis expeses 5.000 Tout S000 ‘necumen: Prepare a master budget for International Container Corporation for 439%7, Assume an income tx rate of 40 percent. Inde the following sehedles 1. Sales budget. 2 Production budget, 1B. Dizect material budget, 4 Diresabor budget. 5: Manuficturing overhead budest 5: Selling and administrative expense budget . Budaoted income statement fn atoractual master master budget results budget variance Units 10,000 Revenue $720,000 vc 546,600 cM 173,400 FC 172,000 Income 1,400Flexible budgets A budget based on more than one level of output. units 10,000 11,000 12,000 Revenue vc CM Ee incomeFlexible budget and sales volume variances Actual flex. bud static bud. Units Rev. vc CM FC incomeEserte $30 Sreighfrverd Conpstton of Vaieces. Aten Cen Company Imatacresrecphable soft cans A tol padation i aca o 12 dazenay ‘The following standards have been set by the prio engieetng Sat? and conti . Dirt labor Dic teal: Quin, 25 hoor Quiniy, ilograms Rate, S16 perboar Pee, $40 per logrant ‘Acta mata prises amounted to 240000 kilogram at $81 pe klbgsam. Act) ‘cured inthe peace of S000 ants were fellows: Dict abor: S211,900'ee 13000 owes Direct mate: $170,100 foe 20,00 kilograms ‘REQUIRED: Use te variance fms to compu the detainee pe and qusn- i valances andthe diet aber este and efcieney vances. ladle whether cach ‘vaiace is avorble or tafayorble, 5 we = Beereine 1129 Straightforward Computation of Overhead Variances, ~ neg Company whic manufscares tslphone-eonponenta, he hs flowing standards and Marbe-budgot data, 5 + Smad tithe Sess esse eeseee $60 perc ebor bane Saar quntiy fret Ito oo ‘hus perio oper aged Bee oretinad se. 2 sino Bulge eer 25,00 ts ‘Atal results fo April are given below. Accu et ae 1000 hows . ‘ena up sees te 29000 uns ‘Acta vile occa III sano0o' ‘Acai ed orient a S100 ‘enue: Use tha variange formals to compute the flowing variances, Incate ‘whether exch verinnes i fvorabla or unavorabl, where approvrisa 1, Varlaleovorhad spending variance. ' 2. Vasiableoverhoad efeeney variance. 2 hand overhead budget valance 44 Fuad ororhead volume vavienee- i«inane for 2010 were Serve sspaono00 Cost ofmechandie old _5,000000 (Grove margin 5 000, Operating eens 2201000 Tneame before income eee $900,000 petting se peta oi 1 iin A te ae PIER ag common enh Pyne sf eo ee te : ee Cae ee Hae a alot 00a gE Feed one ets eee alba | Roem afin : Ee acyl BE otter at radar i Rito come ee Se rere ee ‘Airport stores, nd 20 percent far Calgary operations in genera. Anothes 8150 Ce eae Se pee nng onc ch eee ee aE eso io rsalors sae "reDiom—| _ Panonton Dion digg Drisos Ue inomes Gy | Nee Dow Nor Dow < Biome ley | Newel tom Hinton | Aland to Rhos IRE |eswuousBes 0} poseooie oq sexe} otto pinous ‘Rs sexe owcou . ‘210}0q ew094 ae Sars Sire a swuotades fq uopnqunueg Gobo a) on oo suai Aa ‘jqeyanucs s3809 pas (os) ose oz ses sis ss v's ‘sieBeuew juotboe Aq stastonuca uonnaiatiog a ae 8 stofeuew quauiBes Aq ‘taetanucs <1809 paxis oss ose ooze ove ‘Brew wopngunueg we eT wet ere ‘i809 ajqeuen TIO, 3 ore, oe, ee, ose, 08k aoo's aoe oocts _ooe'1g__oov'es__oos'ss_aoz'es PaRSOIY HOI ead umouunog ~ UOISIAG uOIBIAIT “Bjown Ee 2eN wojsiia ese ——AueBje9 uowwous — Aueduiog Joumopyeaig (s2eqop jo spuesnoyy uy) ‘SuswBes 4 wuawerRs auic94] uopnqinueD wrelaCMTEN Deon unsNo:RELEVAKYCOOTS AMO NeKerre. 7B Concurons owt ans YAR shoul ev ver 817.00 por yous ese of stare. ata gee PE. Dato Prat cntal atin apie see eat, elas The coc savings, slog with tho fein at atarge en erconnel Bonk Seen RHPA Prove eal tons fr wing te evan a Dok Service, rot Bot encng anes and naraive report ween the use of roll Beok Servic by VAR Assocation, 7 ements 1 ems idntiod into cost analy, dacan whether the em got eaount ae appropriate or inappropriate fr tho ana 2% anil olan oat tens, ay ich were omit’ be taal hago -MZ58 i the flowing: Diet mE ooo esse ces 3 1000 Mates ning (0% of dictate co) 200 Diet bie vo ecsseevesene nn fT 6 goon Matting vethad (508 of di! ne) seen fo) ‘Nal waning eet cre Yo nat ea ee on ea Sieh ke cosa i otek opt re bireaze the MZ units fom Dalton he eapacty Waza wed to pane i, hee pers would be ila. Should Waseo doce fo pees Tamaeg Dalen. he wit ot of MZ58 weal aces decneas este amen? aa ee le forent ut al fl caps fr 925000 pe moat, 1p Tein nag 2 Buti the 10 wats rom Dalton Supt, Wess pili £60 Production Planning, Anniston Copoeton manuttarce ‘nt ea hoe produ, wich ary mance ner wih@ —_©A2 SPECIAL ORDER Conder the following dei ofthe incre statement fhe Manteray ‘Pen Company (MPC) forth er eaded Deceaber 312010. Sie ss1900 Teweaofponea rent (Gos ag or peo ‘iso Tenulogen ansenreepes —_ 32n080 . Opeegience Eisouge MPCs fad manfcing cass yer 3.0 nln andi din wed dice: src wee ln St commision of) prot ler d seni come Z Par aoe ands? milln pins Neri endothe ni earls ty ug pee er he eyes arog eaihee Chena! Seen Ban rude was hepoinepel mote ‘in an eastern city dacing early 2011. o ee RESTS sa placiy h psifnejetl h Fi Ht ie cSt 0 fh 1,08 on es "Tho Pima ofr isto low: We'd ved paying sales commisins, twa have to incor sages petal heh FID claw rearing pecan) ‘sl bein a chain rescton of competitor price cating and oF casters wanting special {dais Tbleve in pricing st 0 lower han 8 prcest above ou fall eos of $9,500,000 = 0 a wns ~ 4.5 prune pls the extra SDA perp ler hes in comin 1. Using the conbton-margnteiqu, prepare an azaleas #3 ‘Use for lamar: without th speci ode, the fect of the special order (one ce ‘olan ove cols per oi, and ttle withthe spec eda 2. plat percentage wosld operating income insets or decrease if dhe xr ha tecaped! Doon agree wih the resent derision? Wy?