Exam 6: Fundamentals of Product and Service Costing

Process costing systems do not separate and record direct material and direct labor costs for each individual unit of product.

The two-stage cost allocation process allocates costs to multiple cost pools and then to individual cost objects using different allocation bases.

Why is operations costing often called a "hybrid" system?

Buster Corporation, a manufacturing company, has provided data concerning its operations for September. The beginning balance in the raw materials account was $37,000 and the ending balance was $29,000. Raw materials purchases during the month totaled $57,000. Manufacturing overhead cost incurred during the month was $102,000, of which $2,000 consisted of raw materials classified as indirect materials. The direct materials cost for September was:

Individual product costs are relevant for managerial decision-making but irrelevant for preparing the financial statements.

The selection of an appropriate cost allocation base is more important for single-stage cost allocation systems than for two-stage cost allocation systems.

Fill in the missing items for the following inventories:

Arbor, Inc. has estimated overhead to be $300,000 and labor hours to be 30,000. Actual overhead turned out to be $310,000 when 30,500 labor hours were worked. The predetermined overhead rate would be:

The predetermined manufacturing overhead rate for 2020 was $4.00 per direct labor hour; employees were paid $5.00 per hour. If the estimated direct labor cost was $75,000, what was the estimated manufacturing overhead?

"Beginning Balance (BB) plus Transfers Out (TO) equals Ending Balance (EB) plus Transfers In (TI)".

Adolphus Instruments manufactures two models of calculators. The research model is the RES-1 and the student model is the AS-2. Both models are assembled in the same plant and require the same assembling operations. The difference is in the cost of the internal components. The following data are available for February. RES-1 AS-2 Total Number of units 20,000 80,000 100,000 Parts cost per unit \4 0 \5 0 Other costs: Direct labor \1 24,000 Indirect materials 35,000 Other overhead 141,000 Total \3 00,000 Adolphus uses operations costing and assigns conversion costs on the number of units assembled. Required: Compute the cost of the RES-1 and AS-2 models for February.

The predetermined manufacturing overhead rate for the year was $14.00 per direct labor hour; employees were paid $17.50 per hour. If the estimated direct labor cost was $315,000, what was the estimated manufacturing overhead?

Flynn and Morgan Refiners began business on July 1. The following operations data are available for July and the one product the company produces: Gallons Beginning inventory -0- Started in July 310,000 Ending work-in-process inventory (80\% complete) 30,000 Cost incurred in July were: Materials \ 250,000 Labor 52,000 Manufacturing overhead 154,000 All production at Flynn and Morgan is sold as it is produced (i.e., there are no finished goods inventories). Required: (a) Compute cost of goods sold for July. (b) What is the value of the work-in-process inventory on July 31?

The following information has been gathered for Catalyst Legal Services for its fiscal year ending December 31: Actual office overhead costs \ 1,275,500 Actual billable labor hours 44,600 Actual billable labor costs \ 3,960,000 Estimated office overhead costs \ 1,080,000 Estimated billable labor hours 48,000 Estrmated billable labor costs \ 4,320,000 - What is the predetermined office overhead rate per billable labor hour?

MegaRock produces quick setting concrete mix. Production of 200,000 tons was started in April, 190,000 tons were completed. Material costs were $3,152,000 for the month while conversion costs were $591,000. There was no beginning work-in-process; the ending work-in-process was 70% complete. -What is the cost of the product that was completed and transferred to finished goods?

Case (A) Case (B) Case (C) Beginning Balance (BB) \ 64,800 \ 59,840 ? Ending Balance (EB) 61,300 ? 13,800 Transferred In (TT) 189,100 79,530 65,200 Transferred Out (TO) ? 76,420 67,300 - For Case (C) above, what is the Beginning Balance (BB)?

Determine the missing values from the table below:

Savor Flavor Supplies applies manufacturing overhead to its products on the basis of 50% of direct material cost. If a job had $35,000 of manufacturing overhead applied to it during May, the direct materials assigned to the job was:

In computing its predetermined overhead rate, Stiles Company inadvertently left its indirect labor costs out of the computation. This oversight will cause:

The Titan Enterprises Company manufactures cleaning spray for public schools. During 2020, the company spent $600,000 on prime costs and $800,000 on conversion costs. Overhead is applied at a rate of 150% of direct labor costs. How much did the company allocate (apply) for manufacturing overhead during 2020?