R2D2 Test Systems manufactures automated testing equipment

Question 1:

Which would be more appropriate in each of the following situations – job-order costing or process costing?

Question 2:

R2D2 Test Systems manufactures automated testing equipment. The company uses a job-order costing system and applies overhead on the basis of machine hours (MH). At the beginning of the year, estimated manufacturing overhead was $1,960,000, and the estimated machine hours were 98,000. Data regarding several jobs at R2D2 are presented below.

By the end of the first month (January), all jobs but RX-115 were completed, and all completed jobs had been delivered to customers except for SL-205.

Required:

1) What was the balance in Finished Goods inventory at the end of January?

Question 3:

Takada Technology, Inc., has a job-order costing system. The company uses predetermined overhead rates in applying manufacturing overhead cost to individual jobs. The predetermined overhead rate in Department A is based on machine hours, and the rate in Department B is based on direct materials cost. At the beginning of the most recent year, the company's management made the following estimates for the year:

Job 243 entered into production on April 1 and was completed on May 12. The company's cost records show the following information about the job:

At the end of the year, the records of Takada showed the following actual cost and operating data for all jobs worked on during the year:

Required:

1. Compute the predetermined overhead rates for Department A and Department B.
2. Compute the total overhead cost applied to Job 243.
3. Compute the amount of underapplied or overapplied overhead in each department at the end of the current year.

Question 4:

Small Lake Fisheries, Inc. processes miscellaneous fish for various distributors. Two departments involved – Cleaning and Packing. Data relating to kilograms of fish processed in the Cleaning department during May are given below:

A total of 240,000 kilograms of fish were started into processing during May. All materials are added at the beginning of processing in the Cleaning Department.

Required:

1. Compute the equivalent units for May for the Cleaning Department, assuming that the company uses the weighted-average method of accounting for units.

Question 5:

Grand Bend Company produces a high-quality insulation material that passes through two production processes. Data for November for the first process follow:

Required:

1. Assume that the company uses the weighted-average method of accounting for units and costs. Determine the equivalent unit for November for the first process.
2. Compute the costs per equivalent unit for November for the first process.
3. Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process in November.