Echo Sports Company produces home basketball goal systems consisting of a stand
Question # 00251570
Posted By:
Updated on: 04/14/2016 10:24 AM Due on: 05/14/2016
There are three problems this week. Click the tabs at the bottom of the spreadsheet to go to problems 2 and 3.
Echo Sports Company produces home basketball goal systems consisting of a stand, backboard, rim, and net. The company has sufficient orders
and capacity to produce 800 goal systems per month. Manufacturing costs and other costs are shown below:
Administrative salary
Depreciation on office equipment
Depreciation on production equipment
Electric and other factory utilities
Factory supervisor salary
Fiberglass backboards purchased from another manufacturer
Insurance on factory building and contents
Maintenance costs on factory equipment
Nets and rims purchased from another manufacturer
Rent on factory building
Sales commissions
Steel pipe for stand fabrication
Supplies for administrative office
2,400.00
400.00
1,800.00
1,400.00
2,000.00
30,400.00
600.00
1,200.00
6,400.00
2,000.00
1,600.00
14,920.00
600.00
Wages for production workers
14,720.00
80,440.00
Enter each manufacturing cost in the appropriate column.
Leave blank if it does not fit in any column.
Administrative salary
Depreciation on office equipment
Depreciation on production equipment
Electric and other factory utilities
Factory supervisor salary
Fiberglass backboards purchased from another manufacturer
Insurance on factory building and contents
Maintenance costs on factory equipment
Nets and rims purchased from another manufacturer
Rent on factory building
Sales commissions
Steel pipe for stand fabrication
Supplies for administrative office
Wages for production workers
Totals
Compute the cost to produce 1 basketball goal system (cost per unit):
Direct materials
Direct labor
Overhead
Total manufacturing costs
Units of production
Cost per unit
Direct
Materials
Direct
Labor
-
$
800
-
What will the cost per unit be if we increase production by 100 units with a proportional cost
increase for direct materials and direct labor, but no increase in overhead cost?
Direct materials
Direct labor
Overhead
Total manufacturing costs
Units of production
900
Cost per unit
$
-
Manufacturing
Overhead
-
-
Job Costing
Elite Custom Cabinetry Company produces custom cabinet order to exact measure based off CAD drawings provided by kitchen remodeling firms:
As of June 1, there was one order in production (job 5-3) and two new jobs were started in June (jobs 6-1 and 6-2).
Job 5-3 had incurred costs as follows prior to the month of June: direct material $4,600; direct labor $6,550, overhead $3,400
There were no finished goods as orders ship out upon completion. Raw material inventory was $18,600 as of June 1.
The following events occurred during June:
1. Purchased additional raw materials of $20,000.
2. Incurred direct labor hours of 640 hours at a rate of $24.00 during the month of June.
3. Incurred total manufacturing overhead costs of $18,400 during the month of June.
4. Assigned Direct materials and direct labor hours to jobs as follows:
Actual
Materials
Hours
Job 5-3
2,300
112
Job 6-1
8,700
320
Job 6-2
5,420
208
Totals
16,420
640
5. The company uses direct labor hours to assign overhead to individual jobs, and the predetermined
overhead rate is $28.00 per hour, based on the budget of 600 labor hours per month.
6. Jobs 5-3 and 6-1 are completed and shipped in the month of June. Job 6-2 is in progress at month end.
A.
B.
C.
D.
Calculate the completed cost of jobs 5-3 and 6-1.
Calculate the cost of work in process (job 6-2).
Calculate over or under applied overhead for hours worked and rate per hour.
Calculate the actual overhead rate per hour.
Job 5-3
Work in Process
Additional materials
Additional direct labor
Additional overhead applied
Total cost of completed job
-
Job 6-1
Direct materials
Direct labor
Overhead applied
Total cost of completed job
-
Job 6-2
Direct materials
Direct labor
Overhead applied
Total cost of work in process
-
Total overhead incurred
Total overhead applied
Under applied overhead
Actual overhead rate:
Total actual overhead cost
Total hours direct labor
Cost per direct labor hour
Process Job Costing and Equivalent Units of Production
Bay Manufacturing produces paint. The company has two processes: mixing and packaging.
The ingredients for the paint are mixed in large batches and then transferred to the packaging
department, where one-gallon cans are filled, capped, labeled, and boxed.
There was no work in process on February 1. The materials are all brought to the packaging department up front
and charged to the job. Nothing is transferred to finished goods until the entire job is complete. The
materials costs include the packaging, material, and the cost transferred from the mixing department.
On February 2, 15,000 gallons (job 2-1) were transferred into the packaging department from the
mixing department and completed on February 19.
The costs incurred to complete job 2-1 in the packaging department are as follows:
Materials
56,250
Labor
11,250
Overhead (applied based on direct labor hours)
7,500
On February 20, another 20,000 gallons (job 2-2) were transferred into the packaging department.
Job 2-2 was 50% complete as to labor at the end of the month.
The costs incurred (unit cost unchanged from job 2-1) to complete job 2-2 in the packaging
department are as follows:
Materials
75,000
Labor
15,000
Overhead (applied based on direct labor hours)
10,000
INSTRUCTIONS:
1. Compute the physical units of production.
2. Compute the cost per unit to complete packaging for labor, materials, overhead, and total.
3. Compute equivalent units and cost of work in process as of the end of February.
4. Record journal entries for:
a. the movement of materials from materials inventory to each job
b. the allocation of payroll to each job
c. the application of overhead to each job
d. the movement of work in process to finished goods
Part 1:
Units to be accounted for:
Work in process
Started in production
Total units
Units accounted for:
Completed and transferred out
Work in process
Total units
Part 2:
Total costs to be incurred, job 2-1
Units
Cost per unit to be incurred
Part 3:
Work in process, February 28
Equivalent units
20,000 units transferred in
Costs incurred
Equivalent gallons
Cost per unit
Total cost in WIP February 28
Part 4:
Work in process, job 2-1
Work in process, job 2-2
Materials inventory
Units
35,000
35,000
15,000
20,000
35,000
Material
#DIV/0!
Material
20,000
100%
20,000
#DIV/0!
#DIV/0!
Debit
Labor
#DIV/0!
Labor
###
50%
10,000
#DIV/0!
#DIV/0!
Credit
56,250
#DIV/0!
#DIV/0!
Work in process, job 2-1
Work in process, job 2-2
Payroll Summary
11,250
#DIV/0!
Work in process, job 2-1
Work in process, job 2-2
Overhead
7,500
#DIV/0!
Finished goods inventory
Work in process, job 2-1
75,000
#DIV/0!
#DIV/0!
75,000
Overhead
Total
#DIV/0!
Overhead
20,000
50%
10,000
#DIV/0!
#DIV/0!
#DIV/0!
Total
#DIV/0!
Echo Sports Company produces home basketball goal systems consisting of a stand, backboard, rim, and net. The company has sufficient orders
and capacity to produce 800 goal systems per month. Manufacturing costs and other costs are shown below:
Administrative salary
Depreciation on office equipment
Depreciation on production equipment
Electric and other factory utilities
Factory supervisor salary
Fiberglass backboards purchased from another manufacturer
Insurance on factory building and contents
Maintenance costs on factory equipment
Nets and rims purchased from another manufacturer
Rent on factory building
Sales commissions
Steel pipe for stand fabrication
Supplies for administrative office
2,400.00
400.00
1,800.00
1,400.00
2,000.00
30,400.00
600.00
1,200.00
6,400.00
2,000.00
1,600.00
14,920.00
600.00
Wages for production workers
14,720.00
80,440.00
Enter each manufacturing cost in the appropriate column.
Leave blank if it does not fit in any column.
Administrative salary
Depreciation on office equipment
Depreciation on production equipment
Electric and other factory utilities
Factory supervisor salary
Fiberglass backboards purchased from another manufacturer
Insurance on factory building and contents
Maintenance costs on factory equipment
Nets and rims purchased from another manufacturer
Rent on factory building
Sales commissions
Steel pipe for stand fabrication
Supplies for administrative office
Wages for production workers
Totals
Compute the cost to produce 1 basketball goal system (cost per unit):
Direct materials
Direct labor
Overhead
Total manufacturing costs
Units of production
Cost per unit
Direct
Materials
Direct
Labor
-
$
800
-
What will the cost per unit be if we increase production by 100 units with a proportional cost
increase for direct materials and direct labor, but no increase in overhead cost?
Direct materials
Direct labor
Overhead
Total manufacturing costs
Units of production
900
Cost per unit
$
-
Manufacturing
Overhead
-
-
Job Costing
Elite Custom Cabinetry Company produces custom cabinet order to exact measure based off CAD drawings provided by kitchen remodeling firms:
As of June 1, there was one order in production (job 5-3) and two new jobs were started in June (jobs 6-1 and 6-2).
Job 5-3 had incurred costs as follows prior to the month of June: direct material $4,600; direct labor $6,550, overhead $3,400
There were no finished goods as orders ship out upon completion. Raw material inventory was $18,600 as of June 1.
The following events occurred during June:
1. Purchased additional raw materials of $20,000.
2. Incurred direct labor hours of 640 hours at a rate of $24.00 during the month of June.
3. Incurred total manufacturing overhead costs of $18,400 during the month of June.
4. Assigned Direct materials and direct labor hours to jobs as follows:
Actual
Materials
Hours
Job 5-3
2,300
112
Job 6-1
8,700
320
Job 6-2
5,420
208
Totals
16,420
640
5. The company uses direct labor hours to assign overhead to individual jobs, and the predetermined
overhead rate is $28.00 per hour, based on the budget of 600 labor hours per month.
6. Jobs 5-3 and 6-1 are completed and shipped in the month of June. Job 6-2 is in progress at month end.
A.
B.
C.
D.
Calculate the completed cost of jobs 5-3 and 6-1.
Calculate the cost of work in process (job 6-2).
Calculate over or under applied overhead for hours worked and rate per hour.
Calculate the actual overhead rate per hour.
Job 5-3
Work in Process
Additional materials
Additional direct labor
Additional overhead applied
Total cost of completed job
-
Job 6-1
Direct materials
Direct labor
Overhead applied
Total cost of completed job
-
Job 6-2
Direct materials
Direct labor
Overhead applied
Total cost of work in process
-
Total overhead incurred
Total overhead applied
Under applied overhead
Actual overhead rate:
Total actual overhead cost
Total hours direct labor
Cost per direct labor hour
Process Job Costing and Equivalent Units of Production
Bay Manufacturing produces paint. The company has two processes: mixing and packaging.
The ingredients for the paint are mixed in large batches and then transferred to the packaging
department, where one-gallon cans are filled, capped, labeled, and boxed.
There was no work in process on February 1. The materials are all brought to the packaging department up front
and charged to the job. Nothing is transferred to finished goods until the entire job is complete. The
materials costs include the packaging, material, and the cost transferred from the mixing department.
On February 2, 15,000 gallons (job 2-1) were transferred into the packaging department from the
mixing department and completed on February 19.
The costs incurred to complete job 2-1 in the packaging department are as follows:
Materials
56,250
Labor
11,250
Overhead (applied based on direct labor hours)
7,500
On February 20, another 20,000 gallons (job 2-2) were transferred into the packaging department.
Job 2-2 was 50% complete as to labor at the end of the month.
The costs incurred (unit cost unchanged from job 2-1) to complete job 2-2 in the packaging
department are as follows:
Materials
75,000
Labor
15,000
Overhead (applied based on direct labor hours)
10,000
INSTRUCTIONS:
1. Compute the physical units of production.
2. Compute the cost per unit to complete packaging for labor, materials, overhead, and total.
3. Compute equivalent units and cost of work in process as of the end of February.
4. Record journal entries for:
a. the movement of materials from materials inventory to each job
b. the allocation of payroll to each job
c. the application of overhead to each job
d. the movement of work in process to finished goods
Part 1:
Units to be accounted for:
Work in process
Started in production
Total units
Units accounted for:
Completed and transferred out
Work in process
Total units
Part 2:
Total costs to be incurred, job 2-1
Units
Cost per unit to be incurred
Part 3:
Work in process, February 28
Equivalent units
20,000 units transferred in
Costs incurred
Equivalent gallons
Cost per unit
Total cost in WIP February 28
Part 4:
Work in process, job 2-1
Work in process, job 2-2
Materials inventory
Units
35,000
35,000
15,000
20,000
35,000
Material
#DIV/0!
Material
20,000
100%
20,000
#DIV/0!
#DIV/0!
Debit
Labor
#DIV/0!
Labor
###
50%
10,000
#DIV/0!
#DIV/0!
Credit
56,250
#DIV/0!
#DIV/0!
Work in process, job 2-1
Work in process, job 2-2
Payroll Summary
11,250
#DIV/0!
Work in process, job 2-1
Work in process, job 2-2
Overhead
7,500
#DIV/0!
Finished goods inventory
Work in process, job 2-1
75,000
#DIV/0!
#DIV/0!
75,000
Overhead
Total
#DIV/0!
Overhead
20,000
50%
10,000
#DIV/0!
#DIV/0!
#DIV/0!
Total
#DIV/0!
-
Rating:
/5
Solution: Echo Sports Company produces home basketball goal systems consisting of a stand