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. -Under variable costing,the fixed manufacturing costs expensed on the income statement (excluding adjustments for variances)total:

Hybrid-costing systems are developed to cost products that are produced in a standardised environment,but which are often customised to meet the needs of some of its customers.

When using a normal costing system,year-end accounting records will show that INDIRECT COSTS are:

While costs are measured for individual jobs in a job-costing system,they are measured for individual process stages in a process-costing system.

The first-in,first-out (FIFO)process-costing method assigns the cost of the previous accounting period's equivalent units in beginning work-in-process inventory to the first units completed and transferred out of the process.

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 cost of goods sold using variable costing?

Job costing:

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. -The main difference between variable costing and absorption costing is the way in which fixed manufacturing costs are accounted for.

Direct costs are allocated to the cost object using a cost-allocation method.

Absorption costing:

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 -Underallocated indirect costs occur when the allocated amount of indirect costs is greater than the amount incurred for that period.

The FIFO process-costing method merges the work and the costs of the beginning inventory with the work and the costs done during the current period.

________ costing is used by a business to price unique products for different jobs.

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 cost of goods sold per unit using variable costing?

What is product costing information used for by managers?

Tamworth Company prepared the following absorption-costing income statement for the year ended May 31,2018. Sales (16 000 units) \ 320000 Cost of goods sold 216000 Gross margin \ 104000 Selling and administrative expenses Operating profit Additional information follows: Selling and administrative expenses include $1.50 of variable cost per unit sold.There was no beginning inventory,and 17 500 units were produced.Variable manufacturing costs were $11 per unit.Actual fixed costs were equal to budgeted fixed costs. Required: Prepare a variable-costing income statement for the same period. _____________________________________________________________________________________________ _____________________________________________________________________________________________

What would be the appropriate journal entry if the following labour wages were incurred in a furniture manufacturing company? Assembly workers \ 30000 Janitors \ 20000 A) Wages Payable Control 50000 Work-in-Process Control 50000 B) Work-in-Process Control 50000 Wages Payable Control 50000 C) Work-in-Proc ess Control 30000 Manufacturing Overhead Control 20000 Wages Payable Control 50000 D) D) Manufacturing Overhead Control 50000 Wages Payable Control 50000

Cost of using what has been greatly reduced by the widespread adoption of computerised accounting systems? Variant question

What is the conversion cost per equivalent unit in June?

For normal costing,even though the budgeted indirect-cost rate is based on estimates,indirect costs are allocated to products based on actual levels of the cost-allocation base.