 |
FACULTY OF ECONOMIC AND ADMINISTRATIVE SCIENCES
DEPARTMENT OF MANAGEMENT
MAN 305 COST ACCOUNTING
MIDTERM EXAM
(26/11/2002)
Hoper Company had the following account balances during 2001:
| Administration
salaries
....... Direct manufacturing labor ... ... Direct materials, December 31 .... Direct materials, January 1 . .... . Direct materials, Purchases . .... Factory utilities ......... Finished goods inventory, December 31 Finished goods inventory, January 1 .. Indirect manufacturing labor ...... Indirect materials ....... Marketing expenses ...... Miscellaneous factory overhead ... Revenues ............ Work-in-process, December 31 . Work-in-process, January 1 ... |
$
22,000
20,000 13,000 25,000 78,000 5,000 20,000 30,000 3,000 7,000 15,000 4,000 180,000 5,000 1,000 |
Required:
a. What is Hoper's cost of direct materials used during 2001?
b. What is Hoper's cost of goods manufactured during 2001?
c. What is Hoper's cost of goods sold during 2001?
d. What is Hoper's gross margin during 2001?
QUESTION
2.
Hiroki Company uses a normal costing system with a single manufacturing
overhead cost pool and machine hours as the cost allocation base. The
following data are available for the year ended December 31, 2001
| Budgeted
manufacturing overhead Budgeted machine hours Budgeted direct labor hours Actual manufacturing overhead Actual machine hours Actual direct labor hours |
$1,125,000 12,500 machine hours 1,875 labor hours $1,116,000 13,100 machine hours 1,750 labor hours |
Required:
a. Determine the budgeted manufacturing overhead rate.
b. What is the manufacturing overhead allocated?
c. Compute over-or under allocated manufacturing overhead in 2001.
d. What is the proper journal entry to write off the over-or under allocated
manufacturing overhead to cost of goods sold.
QUESTION
3.
Brighty Company uses a job-order costing system for manufacturing
parts of calculators. Summary of the transactions for the month July included:
a. Direct materials used, $2,500 and indirect material used, $500.
b. Direct labor incurred, $1,800, wages will be paid in August.
c. Factory utilities were $200, depreciation on the equipment was $500,
and repairs were $400. Utilities and repairs were paid in July.
d. Indirect manufacturing cost applied 300 machine hours at $5 per machine
hour.
e. Costs of orders completed, $6,000.
f. Costs of goods sold, $5,000.
Required:
Prepare journal entries to summarize July transactions.
QUESTION
4.
Singleton Company manufactures household items sold at trade shows.
The items, classified as either Pruduct A or Pruduct B, are manufactured
on a common assembly line. Singleton Company uses Activity based costing.
The following relationships between production costs and some of the indirect
manufacturing activities for July 2002, along with the production data
for the two product lines:
|
Activity
used in
|
||||
| Activity | Cost Driver | Allocation Rate | Product A | Product B |
| Material handling | Number of parts | $2.00 per part |
700
|
500
|
| Machining | Machine hours | $30.00 per hour |
200
|
100
|
| Assembly | Units started | $3.20 per unit |
600
|
700
|
| Inspection | Number tested | $4.00 per unit |
200
|
600
|
|
Direct costs: |
||||
|
Labor |
$24,000
|
$18,000
|
||
| Materials |
$7,880 |
$5,000 |
||
Required:
Determine the total production cost of each of the two product lines for
July and the cost per unit, assuming all units started were completed.
QUESTION
5.
Juliana
Company has two support departments: Information Systems and Human Resources.
The Information Systems Department's costs of $200,000 are allocated on
the basis of standard hours. The Human Resources Department's costs of
$400,000 are allocated based on the number of employees. Costs of Operating
Department Assembly and Testing are $700,000 and $150,000 respectively.
Data on standard service hours and number of employees are as follows:
|
Support Departments
|
Operating
Departments
|
|||
|
Information
Systems
|
Human
Resource
|
Assembly
|
Testing
|
|
| Standard Hours |
400
|
250
|
350
|
|
| Percentage |
40
%
|
25
%
|
35
%
|
|
| Number of Employees |
30
|
120
|
50
|
|
| Percentage |
15
%
|
60
%
|
25
%
|
|
Required:
What are the allocation of costs of Support Departments Information Systems
and Human Resources to Operating Departments Assembly and Testing using
the reciprical method?