Answer the following questions using the information below: Sunny Company makes gas pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $15 per direct labour-hour.The following data are obtained from the accounting records for June 2018: \[\begin{array} { l r } \text { Direct materials } & \$ 280000 \\ \text { Direct labour (7000 hours @ } \$ 11 / \text { hour) } & \$ 77000 \\ \text { Ind irect labour } & \$ 20000 \\ \text { Plant facility rent } & \$ 60000 \\ \text { Deprecia tion on plant machinery and equipment } & \$ 30000 \\ \text { Sales commissions } & \$ 40000 \\ \text { Administrative expenses } & \$ 50000 \end{array}\] -What are three possible ways to dispose of underallocated or overallocated overhead costs at the end of a fiscal year? Briefly comment on the theoretical correctness or incorrectness of each method. _____________________________________________________________________________________________ _____________________________________________________________________________________________

One way to dispose of underallocated or

Answer the following questions using the information below: Jackson Cabinetry Pty Ltd manufactures standard sized modular cabinet units for kitchens and other applications within the home.Its costing system utilises two cost categories,direct materials and conversion costs.Each product must pass through the rough cut department and the finish department.Direct materials are added at the beginning of production.Conversion costs are allocated evenly throughout production. Data for Finish Department for March 2018 are: $\begin{array}{ll} \text { Work-in-process, be ginning inventory, } 25 \% \text { converted } & 1000 \text { units } \\ \text { Units started during February } & 1400 \text { units } \\ \text { Work in process, end ing inventory } & 300 \text { units } \end{array}$ $\text { Costs for Finish department for March } 2018 \text { are: }$ $\begin{array}{ll} \text { Work-in-process, be ginning inventory: } & \\ \text { Direct materials } & \$ 150000 \\ \text { Conversion costs } & \$ 100000 \\ \text { Direct materials costs added during February } & \$ 210000 \\ \text { Conversion costs added during February } & \$ 800000 \end{array}$ -What is the unit cost per equivalent unit of the beginning inventory in the finish department?

A) $400.00 B) $250.00 C) $550.00 D) $150.00 A) $400.00 B) $250.00 C) $550.00 D) $150.00

Answer the following questions using the information below: For 20X5,Irwin's Animal Supply Manufacturing uses machine-hours as the only overhead cost-allocation base.The accounting records contain the following information: \[\begin{array} { l c c } & \text { Estimated } & \text { Actual } \\ \text { Manufacturing overhead costs } & \$ 150000 & \$ 180000 \\ \text { Machine-hours } & 30000 & 35000 \end{array}\] -Using job costing,the 20X5 budgeted manufacturing overhead rate is:

A) $4.00 per machine-hour. B) $6.00 per machine-hour. C) $5.00 per machine-hour. D) $4.80 per machine-hour. A) $4.00 per machine-hour. B) $6.00 per machine-hour. C) $5.00 per machine-hour. D) $4.80 per machine-hour.

Indooroopilly Corporation applies overhead based upon machine-hours.Budgeted factory overhead was $266 400 and budgeted machine-hours were 18 500.Actual factory overhead was $287 920 and actual machine-hours were 19 050.Before disposition of under/overapplied overhead,the cost of goods sold was $560 000 and ending inventories were as follows: \[\begin{array} { l r } \text { Direct materials } & \$ 60000 \\ \text { WIP } & 190000 \\ \text { Finished goods } & \underline { 250000 } \\ \text { Total } & \underline { \$ 500000} \end{array}\] Required a.Determine the budgeted factory overhead rate per machine-hour. b.Compute the over/underapplied overhead. c.Prepare the journal entry to dispose of the variance using the write-off to cost of goods sold approach. d.Prepare the journal entry to dispose of the variance using the proration approach. _____________________________________________________________________________________________ ____________________________________________________________________________________________

a.$266 400/18 500 hrs.= $14.40 per hour

Exam 6: Estimating the Costs of Products and Inventory

Answer the following questions using the information below: Sunny Company makes gas pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $15 per direct labour-hour.The following data are obtained from the accounting records for June 2018: Direct materials \ 280000 Direct labour (7000 hours @ \ 11/ hour) \ 77000 Ind irect labour \ 20000 Plant facility rent \ 60000 Deprecia tion on plant machinery and equipment \ 30000 Sales commissions \ 40000 Administrative expenses \ 50000 -What are three possible ways to dispose of underallocated or overallocated overhead costs at the end of a fiscal year? Briefly comment on the theoretical correctness or incorrectness of each method. _ _

(Essay)

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Question 61

The spreading of underallocated or overallocated overhead among ending work-in-process,finished goods,and cost of goods sold is called:

(Multiple Choice)

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Question 62

Which of the following costing systems are used for the costing of like or similar units of products in mass production? Variant question

(Multiple Choice)

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Question 63

The following information pertains to Ball Company: Manufacturing costs \ 2400000 Units manufactured 40000 Beginning inventory 0 units 39 800 units are sold during the year for $100 per unit. Required: a.What is the average manufacturing cost per unit? b.What is the cost of ending finished goods inventory? c.What is the gross margin? _ _

(Essay)

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Question 64

Job costing may only be used by:

(Multiple Choice)

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Question 65

For externally reported inventory costs,the Work-in-Process Control account is increased (debited)by:

(Multiple Choice)

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Question 66

Answer the following questions using the information below: Jackson Cabinetry Pty Ltd manufactures standard sized modular cabinet units for kitchens and other applications within the home.Its costing system utilises two cost categories,direct materials and conversion costs.Each product must pass through the rough cut department and the finish department.Direct materials are added at the beginning of production.Conversion costs are allocated evenly throughout production. Data for Finish Department for March 2018 are: Work-in-process, be ginning inventory, 25\% converted 1000 units Units started during February 1400 units Work in process, end ing inventory 300 units $\text { Costs for Finish department for March } 2018 \text { are: }$ Work-in-process, be ginning inventory: Direct materials \ 150000 Conversion costs \ 100000 Direct materials costs added during February \ 210000 Conversion costs added during February \ 800000 -What is the unit cost per equivalent unit of the beginning inventory in the finish department?

(Multiple Choice)

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Question 67

When should process costing be used to assign costs to products?

(Multiple Choice)

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Question 68

The __________________ approach re-states all indirect costs using actual cost rates rather than budgeted cost rates.

(Multiple Choice)

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Question 69

Which of the following does NOT increase (are debited to)the Work-in-Process Control account? Variant question.

(Multiple Choice)

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Question 70

A disadvantage of the weighted-average method compared to the FIFO process-costing method is that:

(Multiple Choice)

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Question 71

What is the direct materials cost per equivalent unit during June?

(Multiple Choice)

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Question 72

Answer the following questions using the information below: For 20X5,Irwin's Animal Supply Manufacturing uses machine-hours as the only overhead cost-allocation base.The accounting records contain the following information: Estimated Actual Manufacturing overhead costs \ 150000 \ 180000 Machine-hours 30000 35000 -Using job costing,the 20X5 budgeted manufacturing overhead rate is:

(Multiple Choice)

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Question 73

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. -When variable costing is used,an income statement will show gross margin.

(True/False)

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Question 74

Answer the following questions using the information below: Wagga Wagga Textiles is a small textile manufacturer using machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs to the various jobs contracted during the year.The following estimates are provided for the coming year for the company and for the Tumut Brass Band band jacket job. Company Tumut Brass Band Job Direct materials \ 40000 \ 1000 Direct labour \ 10000 \ 200 Manufacturing overhead costs \ 30000 Machine-hours 100000 900 -What are the total manufacturing costs of this job?

(Multiple Choice)

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Question 75

In the computation of the cost per equivalent unit,the weighted-average method of process costing considers all the costs:

(Multiple Choice)

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Question 76

Indooroopilly Corporation applies overhead based upon machine-hours.Budgeted factory overhead was $266 400 and budgeted machine-hours were 18 500.Actual factory overhead was $287 920 and actual machine-hours were 19 050.Before disposition of under/overapplied overhead,the cost of goods sold was $560 000 and ending inventories were as follows: Direct materials \ 60000 WIP 190000 Finished goods Total Required a.Determine the budgeted factory overhead rate per machine-hour. b.Compute the over/underapplied overhead. c.Prepare the journal entry to dispose of the variance using the write-off to cost of goods sold approach. d.Prepare the journal entry to dispose of the variance using the proration approach. _

(Essay)

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Question 77

Does the costing system used by managers affect the reporting of financial results? _ _

(Essay)

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Question 78

Under both variable and absorption costing,all variable manufacturing costs are inventoriable costs.

(True/False)

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Question 79

The ending balance in Work-in-Process Control represents the total costs of all jobs that have not yet been completed.

(True/False)

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Question 80

The spreading of underallocated or overallocated overhead among ending work-in-process,finished goods,and cost of goods sold is called:

Which of the following costing systems are used for the costing of like or similar units of products in mass production? Variant question

Job costing may only be used by:

For externally reported inventory costs,the Work-in-Process Control account is increased (debited)by:

When should process costing be used to assign costs to products?

The __________________ approach re-states all indirect costs using actual cost rates rather than budgeted cost rates.

Which of the following does NOT increase (are debited to)the Work-in-Process Control account? Variant question.

A disadvantage of the weighted-average method compared to the FIFO process-costing method is that:

What is the direct materials cost per equivalent unit during June?

In the computation of the cost per equivalent unit,the weighted-average method of process costing considers all the costs:

Does the costing system used by managers affect the reporting of financial results? _ _

Under both variable and absorption costing,all variable manufacturing costs are inventoriable costs.

The ending balance in Work-in-Process Control represents the total costs of all jobs that have not yet been completed.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

Filters

Exam 6: Estimating the Costs of Products and Inventory

The spreading of underallocated or overallocated overhead among ending work-in-process,finished goods,and cost of goods sold is called:

Which of the following costing systems are used for the costing of like or similar units of products in mass production? Variant question

Job costing may only be used by:

For externally reported inventory costs,the Work-in-Process Control account is increased (debited)by:

When should process costing be used to assign costs to products?

The __________________ approach re-states all indirect costs using actual cost rates rather than budgeted cost rates.

Which of the following does NOT increase (are debited to)the Work-in-Process Control account? Variant question.

A disadvantage of the weighted-average method compared to the FIFO process-costing method is that:

What is the direct materials cost per equivalent unit during June?

In the computation of the cost per equivalent unit,the weighted-average method of process costing considers all the costs:

Does the costing system used by managers affect the reporting of financial results? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Under both variable and absorption costing,all variable manufacturing costs are inventoriable costs.

The ending balance in Work-in-Process Control represents the total costs of all jobs that have not yet been completed.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

Filters

Does the costing system used by managers affect the reporting of financial results? _ _