FATİH UNIVERSITY
FACULTY OF
ECONOMIC AND ADMINISTRATIVE SCIENCES
DEPARTMENT OF
MANAGEMENT
MAN 305 COST
ACCOUNTING
FINAL EXAM
Instructor: ALI
COSKUN
Duration: 100 Minutes January 28, 2003
QUESTION 1. (20 points)
Context Company uses a normal costing system with a
single indirect manufacturing cost pool and allocates indirect manufacturing
costs based upon machine hours. Budgeted factory overhead was $2,664,000 and
actual factory overhead was $2,879,000. Budgeted machine hours were 185,000 and
actual machine hours were 190,000. Before disposition of under/overapplied
overhead, the cost of goods sold was $5,600,000 and ending inventories were as
follows:
WIP
inventory $1,800,000
Direct
materials inventory 600,000
Finished
goods inventory 2,600,000
Total
$5,000,000
Required:
a. Determine the budgeted
indirect manufacturing cost rate per machine hour.
b. Compute the
over/underapplied overhead.
c. Give the journal entry to
dispose of the variance using proratio
QUESTION
2. (20 points)
The
General Factory produces boots. It has two departments that process all the
items. During March, the beginning work-in-process in the tanning department
was 60 percent complete as to conversion and 100 percent complete as to direct
materials. The beginning inventory included $6,400 for conversion costs and
$13,300 for materials. Ending work-in-process inventory in the tanning
department was 40 percent complete as to conversion and 100 percent complete as
to direct materials.
Beginning
work-in-process in the finishing department was 40 percent complete as to
conversion and 40 percent complete as to direct materials. Beginning
inventories included $8,100 for transferred-in costs $3,000 for direct
materials and $6,000 for conversion costs. Ending inventory was 25 percent
complete as to conversion and 50 percent complete as to direct materials.
Additional
information about the two departments follows:
Tanning Finishing
Beginning work-in-process units 4,000
3,000
Units started this period 13,000 ?
Units transferred out in this period 12,000 13,000
Ending work-in-process units ? 2,000
Material costs added $37,700
$11,000
Conversion costs 17,400 27,750
Transferred-out cost ? ?
Required:
Prepare a production cost
worksheet using first in first out costing for the tanning department.
QUESTION
3. (20 points)
Big Tomato Canning Company
processes tomatoes into tomato juice, tomato sauce and tomato paste. During
July 2002, the joint costs of processing the tomatoes were $600,000. There was
no beginning or ending inventories for the summer. Production and sales value
information for July were as follows:
Sales Value
at
Product Cases Split off Point
Separable Costs Selling
Price
Tomato Sauce 200,000 $7 per
case $3.00 per case $25 per case
Tomato Juice 150,000 10 per case 6.00 per case
20 per case
Tomato Paste 250,000 8 per case
4.00 per case 10 per
case
Required:
a. Determine the amount
allocated to each product if the estimated net-realizable value method is used.
b. Compute the cost per case
for each product.
c. Compute the gross profit
from the sales of these products in July.
QUESTION 4. (20 points)
Tracky Company manufactures three models of pens,
Model A, B and C. Tracky Company uses activity based costing. Its costing
system has two direct cost categories and three indirect cost pools. Three
activities have been identified as cost drivers and the related indirect
manufacturing costs pooled together to arrive at the following information:
Number of unit Number of Number of
Number of
Product produced Shipments
Components direct labor hour
Model A 200,000 35
250 1,500
Model B 100,000 30 400 2,000
Model C 100,000 50 300 1,600
Activity Costs Cost
allocation base
Shipments $29,900 Number of
shipments
Assembly $45,600 Components
Inspection $15,300 Direct
labor hour
Total direct material costs are
$84,400, $120,000 and $138,800 for model A, B and C respectively. Direct labor
cost is $20 per direct labor hour.
Required:
Compute the unit manufacturing costs of each
product.
QUESTION 5. (20 points)
Tasuma Corporation uses a job-order costing system.
Summary of the transactions during 2002 as follows:
a. Materials purchased, $155,000.
b. Direct materials used, $130,500 and indirect material used, $22,500.
c. Depreciation on the factory building, $5,000;
maintenance expenses, $3,400; factory utilities expense, $2,000 and indirect
manufacturing labor, $4,250. Utilities expense was paid in 2002. Maintenance
and wages haven’t been paid yet.
d. Direct labor incurred, 2,000 labor hours at $15
per hour, wages will be paid in 2003.
e. Manufacturing overhead allocated 4,000 machine
hours at $9 per machine hour.
f. Costs of
orders completed, $200,000.
g. Costs of goods sold, $185,000.
Required:
a. Prepare journal entries to summarize transactions
in 2002.