1) Jackmaster Equipment is an up-scale, higher-priced, specialty road construction equipment maker based in California. The management accountant for Jackmaster compiled information for various levels of output in units, the relevant range for this company is estimated from 0 – 9,000 units. Production above this output incurs additional variable cost per unit of $15,000, additional fixed selling costs of $2,000,000 and additional fixed manufacturing costs of $20,000,000. :
OUTPUT 3,000 5,000 8,000 10,000 Variable mfg. costs $182,000,000 Fixed mfg. costs 255,000,000 Variable sell. costs 56,000,000 Fixed sell. costs 12,000,000 Total costs Sales price per unit 160,000 160,000 160,000 160,000 Unit cost Profit per unit
Required: Rounding all calculations to the nearest dollar, complete the missing information with the correct figures
- Buttfuski is a specialty brownie company in Aspen, Colorado that produces and sells alternative style brownies with extremely high quality, taste, mindfulness and service. The owner would like to identify the various costs incurred during each year to plan and control the costs in the business. Buttfuski’s costs are the following (in thousands of dollars):
Required: (1.) What is the total amount of product costs? (2) What is the total amount of period costs?
3) Consider the following account balances in thousands for the Yankee Company for the year ended December 31, 2019:
Direct Materials Inventory, Beginning $ 58,000 Direct Material Inventory, Ending 32,000 Work in Process, Beginning 38,000 Work in Process, Ending 16,000 Finished Goods Inventory, Beginning 29,000 Finished Goods Inventory, Ending 12,000 Direct Materials, Purchased 99,000 Direct Labor 94,000 Indirect Labor 14,000 Plant insurance 29,000 Other insurance 18,000 Salaries – Nonproduction 65,000 Depreciation – plant 15,000 Depreciation – other 10,000 Repairs & Maintenance – plant 38,000 Marketing & Customer support 75,000 Plant rent 18,000 General & Admin 38,000
Required: Prepare a statement of cost of goods manufactured and an income statement for the year ended December 31, 2019, please note sales were $345,000,000
4) WWW Company listed the following data for 2019:
Budgeted factory overhead $2,095,900 Actual factory overhead 2,125,900 Budgeted direct labor hours 193,000 Budgeted machine hours 86,875 Actual machine hours 91,900 Actual direct labor hours 188,600
(a) Assuming WWW applied overhead based on direct labor hours; calculate the company's predetermined overhead rate for 2019 (b) Assuming WWW applied overhead based on machine hours; calculate the company's predetermined overhead rate for 2019 (c) If overhead is applied based on direct labor hours, calculate the overapplied/underapplied overhead.
(d) If overhead is applied based on machine hours, calculate the overapplied/underapplied overhead.
- The controller for Buffalo Wing Cooking Oil Co. established the following overhead cost pools and cost drivers:
Budgeted Estimated Cost Pool Overhead Cost Driver Cost Driver Level Machine setups $300,000 # of setups 230 setups Material handling 248,600 # of barrels 15,600 barrels Quality control 585,800 # of inspections 2,080 inspections Other overhead 445,800 # of machine hours 22,600 machine hours An order of 1,850 barrels of cooking oil used:
Machine setups 30 setups Material handling 1,990 barrels Quality inspections 300 inspections Machine hours 2,185 machine hours Required: (a) What is the overhead rate per machine hour if the number of machine hours is used as a single cost driver under traditional costing system? (Round your answer to 2 decimal places.) (b) Utilizing traditional costing, how much overhead is assigned to the order based on machine hours as a single cost driver? (c) Utilizing ABC, how much total overhead is assigned to the order? - Jerrica & Jerri, Attorneys at Law has the following budget for the year:
The firm uses direct labor as the cost driver to apply overhead to clients. During January, the firm worked for many clients; data for two of them follow:
Henderson account: Direct materials $4,500 Direct labor 29,000 Fisher account: Direct materials 5,560 Direct labor 69,600
Required: (1) Compute the Jerrica & Jerri budgeted overhead rate. Explain how this is used. (2) Compute the amount of overhead to be charged to the Henderson and Fisher accounts using the predetermined overhead rate calculated in requirement (1). (3) Compute the separate job cost for the Henderson and Fisher accounts.
Sample Solution