FATİH UNIVERSITY
FACULTY OF ECONOMIC AND
ADMINISTRATIVE SCIENCES
DEPARTMENT OF
MANAGEMENT
MAN 305 COST ACCOUNTING
FINAL EXAM
Instructor: Ali COSKUN
Duration: 90 Minutes January 7, 2005
Question 1.
Summer Company produces bikes. It has
two departments that process items: Assembly and Testing.
The Information for Assembly Department for September include:
Beginning work-in-process inventory 1,600
units
Units started 2,000
units
Units transferred to Testing 3,200 units
Conversion costs $ 216,000
Cost of direct materials
$ 132,000
Beginning work-in-process costs:
Materials $ 104,000
Conversion $ 32,080
Beginning work-in-process is completed 70% as to direct materials and 50% as to conversion
costs.
Ending work-in-process is completed 80% as to direct materials and 60% as to conversion
costs.
a. Prepare a production cost worksheet with supporting schedules using the first in first
out method (FIFO) of process costing.
b. Prepare a journal entry for September transfers
from Assembly to Testing Department
Question 2.
Salamon Inc. allocates overhead based upon machine hours.
Budgeted manufacturing overhead was $289,000 and budgeted machine
hours were 8,500. Actual manufacturing overhead was $287,600 and actual machine
hours were 8,400.
Ending balances before proration are as follows: Materials inventory $200,000
Finished goods inventory 90,000
The cost of goods sold 700,000
Work in process 10,000
a. Determine the budgeted
manufacturing overhead rate per machine
hour.
b. Compute the over/underallocated overhead.
c.Dispose the
under-overallocated amount using proration based on ending balances in Work in Process, Finished Goods and Cost
of Goods Sold.
d. Prepare the journal entry to dispose of the
under/overallocated manufacturing overhead.
Question 3.
Tamara's Battery Company
has two service department's
Personnel and Maintenance. The Maintenance Department's costs of $160,000 are allocated on the basis of standard hours used. The
Personnel Department's costs of $40,000 are allocated based on the number of employees.
Costs of Department A and B are $80,000 and $120,000, respectively.
Data on standard service hours and number
of employees are as follows:
Maintenance Personnel Production
Departments
Standard service Department
Department A B
Hours used 400 200 480 320
Number of Employees 15 20 60 225
Allocate service department costs to
production departments using reciprocal method.
Question 4.
Troy Company processes
50,000 gallons of direct materials to produce
two products, Product X and Product
Y. Product X sells for $1 per gallon,
and Product Y, the main product,
sells for $30 per gallon. The
following information is for August:
Beginning Ending
Production Sales Inventory Inventory
Product X: 5,375
5,000 0 375
Product Y: 10,000 9,000 0 1,000
The manufacturing costs
totaled $150,000.
a. How much is cost of the ending inventory under product
by-product method (method A)?
b. What is the
gross margin for Troy Company under product by-product
method (method A)?
Question 5.
Kaplan, Inc. produces two products,
Small and Large. Central costs are allocated
to the two
products in various ways. Advertising expense is $300,000 and it is allocated on the basis of sales. Total payroll processing costs are $96,000 and they are
allocated on the basis of number of employees. Total rent expense is $120,000 and it is allocated on the basis of square
footage. There were no beginning or ending inventory.
Relevant information for the current
month is presented below:
Small Large
Square footage 6,000 18,000
Number of employees 1,020
580
Number of units produced 5,000 1,500
Sales $400,000
$2,000,000
Direct materials cost
$100,000 $ 800,000
Direct labor cost $220,000 $
750,000
a. Calculate the
total cost of each product lines.
b. Calculate the
operating income for the current
month.
Question 6.
Golding Company uses
a predetermined overhead rate to allocate
overhead. Overhead is allocated on the basis of direct labor hours in department 1 and on the basis of machine
hours in department 2. At the beginning of the year, the
following estimates are provided:
Department One
Department Two
Direct Labor Hours
100,000 20,000
Machine Hours 10,000 30,000
Direct Labor Cost $ 750,000 $ 160,000
Overhead Cost $ 250,000
$ 162,000
Actual Costs reported
for all jobs
during the year are as follows:
Department One Department Two
Direct Labor Hours 98,000 21,000
Machine Hours 11,000 32,000
Direct Labor Cost $ 748,000
$ 168,000
Overhead Cost $ 247,500
$ 175,000
The accounting Records
of the company show the following
data for Job 60:
Department One Department Two
Direct Labor Hours
125 50
Machine Hours
10 205
Direct Material Cost $ 1,580
$ 2,650
Direct Labor Cost $
937 $ 400
a. Compute the predetermined overhead rate for each
department.
b. Compute the
total cost of Job 60.
c. If there are 50 units in Job 60, what is the unit cost?