Exam 6: Estimating the Costs of Products and Inventory

Answer the following questions using the information below: Queanbeyan Company incurred fixed manufacturing costs of $7200 during 2018.Other information for 2018 includes: The budgeted denominator level is 800 units. Units produced total 1000 units. Units sold total 950 units. Beginning inventory was zero. The fixed manufacturing cost rate is based on the budgeted denominator level.Manufacturing variances are closed to cost of goods sold. -Mt Panorama Company has the following information for the current year: Beginuing fixed manufacturing overhead in inventory \ 95000 Fixed manufacturing overhead in production 375000 Ending fixed manufacturing overhead in inventory 25000 Beginuing variable manufacturing overhead in inventory \ 10000 Variable manufacturing overhead in production 50000 Ending variable manufacturing overhead in inventory 15000 What is the difference between operating profits under absorption costing and variable costing?

Fixed manufacturing costs included in cost of goods available for sale + the production-volume variance will always = total fixed manufacturing costs under absorption costing.

The principal difference between process costing and job costing is that in job costing an averaging process is used to compute the unit costs of products or services.

When a normal costing system is used,clients using proportionately more lawyer time than paraprofessional time will:

Answer the following questions using the information below: Jindabyne Pillows produces and sells a decorative pillow for $75.00 per unit.In the first month of operation,2000 units were produced and 1750 units were sold.Actual fixed costs are the same as the amount budgeted for the month.Other information for the month includes: Variable manufacturing costs \ 20.00 per urit Variable marketing costs \ 3.00 per urit Fixed manufacturing costs \ 7.00 per unit Administrative expenses, all fixed \ 15.00 per unit Ending inventories: Direct materials -0- WIP -0- Finished goods 250 units -What is operating profit using variable costing?

Modern Electronics manufactures surround sound systems and applies manufacturing costs to production at a budgeted indirect-cost rate of $22 per direct-labour hour.The following data are obtained from the accounting records for August 20X9: Direct materials \ 350000 Direct labour (7000 hours @\ 15/ hour) \ 105000 Ind irect labour \ 15000 Plant lease \ 75000 Depreciation on plant and equipment \ 40000 Marketing expense \ 20000 Plant utilities \ 15000 Required a.What actual amount of manufacturing overhead cost was incurred during August 20X9? b.What amount of manufacturing overhead was allocated to all jobs during August 20X9? c.For August 20X9,was manufacturing overhead underallocated or overallocated? Explain. _____________________________________________________________________________________________ _____________________________________________________________________________________________

What source document is used to keep track of direct labour for a job? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Answer the following questions using the information below: Queanbeyan Company incurred fixed manufacturing costs of $7200 during 2018.Other information for 2018 includes: The budgeted denominator level is 800 units. Units produced total 1000 units. Units sold total 950 units. Beginning inventory was zero. The fixed manufacturing cost rate is based on the budgeted denominator level.Manufacturing variances are closed to cost of goods sold. -Managers can increase operating profit when absorption costing is used by producing more inventory.

Absorption costing 'absorbs' only variable manufacturing costs.

In some variations of normal costing,organisations use budgeted rates to assign direct costs as well as indirect costs to jobs.

Which of the following inventory costing methods shown below is required by GAAP (generally accepted accounting principles)for external financial reporting?

What is job costing information used for? Variant question

Booti Booti Bottling Works manufactures glass bottles.January and February operations were identical in every way except for the planned production. January had a production denominator of 35 000 units. February had a production denominator of 36 000 units. Fixed manufacturing costs totalled $126 000. Sales for both months totalled 45 000 units with variable manufacturing costs of $4 per unit.Selling and administrative costs were $0.40 per unit variable and $60 000 fixed.The selling price was $10 per unit. Required: Compute the operating profit for both months using absorption costing. _____________________________________________________________________________________________ _____________________________________________________________________________________________

At the end of the year,costs allocated using _______ costing will not,in general,equal actual costs incurred.

Actual costing is a costing method that allocates ________ indirect costs.

For each item below indicate the source documents that would most likely authorise the journal entry in a job-costing system. Required: a.direct materials purchased b.direct materials used c.direct manufacturing labour d.indirect manufacturing labour e.finished goods control f.cost of goods sold _____________________________________________________________________________________________ ____________________________________________________________________________________________

The budgeted direct-labour cost rate includes ________ in the calculation.

The Parson Valve Corporation was recently formed to produce a brass valve that forms an essential part of a compressor manufactured by a major corporation.The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process.September is Parson's first month of operations,and therefore,there was no beginning inventory.Direct materials cost for the month totalled $1 400 000;while conversion costs equalled $1 800 000.Accounting records indicate that 800 000 valves were started in September and 700 000 valves were completed. Ending inventory was 20% complete as to conversion costs. Required: a.What is the total manufacturing cost per valve for September? b.Allocate the total costs between the completed valves and the valves in ending inventory. _____________________________________________________________________________________________ _____________________________________________________________________________________________

Under absorption costing,managers can increase operating profit by holding more inventories at the end of the period.

In a costing system: