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managerial accounting 8th
Managerial Accounting Creating Value In A Dynamic Business Environment Mass Market Paperback Jan 01 2013 Hilton Platt 10th Edition David Platt Ronald W Hilton - Solutions
What are transferred-in costs?
Show how to prepare a journal entry to enter directmaterial costs into the Work-in-Process Inventory account for the first department in a sequential production process. Show how to prepare the journal entry recording the transfer of goods from the first to the second department in the sequence.
List and briefly describe the purpose of each of the four process-costing steps.
Define the term equivalent unit and explain how the concept is used in process costing.
What are the purposes of a product-costing system?
List three nonmanufacturing businesses in which process costing could be used. For example, a public accounting firm could use process costing to accumulate the costs of processing clients' tax returns.
List five types of manufacturing in which process costing would be an appropriate product-costing system.What is the key characteristic of these products that makes process costing a good choice?
Explain the primary differences between job-order and process costing.
Describe how an operation costing system accumulates and assigns the costs of direct-material and conversion activity in a batch manufacturing process.
Prepare a departmental production report under weighted-average process costing.
Analyze the total production costs for a department under the weighted-average method of process costing.
Compute the cost per equivalent unit under the weighted-average method of process costing.
Prepare a table of equivalent units under weighted-average process costing.
Prepare journal entries to record the flow of costs in a process-costing system with sequential production departments.
List and explain the similarities and important differences between job-order and process costing.
Liliana Richmond started KidCo, Inc. in Albuquerque, New Mexico to produce affordable children’s furnishings. The company uses a job-order costing system. KidCo’s work-in-process inventory at the end of November consisted of the following jobs .KidCo applies manufacturing overhead on the basis
ColorTech Corporation manufactures two different color printers for the business market. Cost estimates for the two models for the current year are as follows (bottom of next page):The firm’s management expects to operate at a level of 21,000 direct-labor hours in each production department
Refer to the preceding problem regarding Bandway Company. Complete the job-cost record for Job number T79, which appears at the top of the next page. (Assume that all of the labor hours for job T79 occurred during the week of 10/8 through 10/12.)
Bandway Company manufactures brass musical instruments for use by high school students. The company uses a normal-costing system, in which manufacturing overhead is applied on the basis of directlabor hours. The company’s budget for the current year included the following predictions.Required:1.
Conundrum, Inc. manufactures puzzles. Due to a fire in the administrative offices, the accounting records for September of the current year were partially destroyed. You have been able to piece together the following information from the ledger.Required: Calculate the following amounts. Then
Rochester Heating Systems, Inc. calculates its predetermined overhead rate on a quarterly basis. The following estimates were made for the current year.Estimated Manufacturing Overhead Estimated Direct-Labor Hours Quarterly Predetermined Overhead Rate(per direct-labor hour)First quarter
Tiana Shar, the controller for Caesar Glassware Company, is in the process of analyzing the overhead costs for the month of November. She has gathered the following data for the month.The firm’s job-order costing system uses direct-labor hours (measured at practical capacity) as the cost driver
Biloxi Billiards Company uses normal costing, and manufacturing overhead is applied to work in process on the basis of machine hours. On January 1 of the current year there were no balances in work-in-process or finished-goods inventories. The following estimates were included in the current
Marvelous Marshmallow Company’s cost of goods sold for January was $690,000. January 31 workin-process inventory was 90 percent of January 1 work-in-process inventory. Manufacturing overhead applied was 50 percent of direct-labor cost. Other information pertaining to the company’s inventories
Joey Dulwich has recently been hired as a cost management specialist by Offset Press Company, a privately held company that produces a line of offset printing presses and lithograph machines. During his first few months on the job, Dulwich discovered that Offset has been underapplying factory
Seaway, Inc. manufactures outboard motors and an assortment of other marine equipment. The company uses a job-order costing system. Normal costing is used, and manufacturing overhead is applied on the basis of machine hours. Estimated manufacturing overhead for the year is $1,520,200, and
Refer to the schedule of cost of goods manufactured prepared for Superior Metals Corporation in the preceding problem.Required:1. How much of the manufacturing costs incurred during 20x4 remained associated with work-in-process inventory on December 31, 20x4?2. Suppose the company had increased its
The following data refer to Superior Metals Corporation for the year 20x4.Required:1. Prepare Superior Metals’ schedule of cost of goods manufactured for 20x4.2. Prepare the company’s schedule of cost of goods sold for 20x4. The company closes overapplied or underapplied overhead into Cost of
Golden State Enterprises provides consulting services throughout California and uses a job-order costing system to accumulate the cost of client projects. Traceable costs are charged directly to individual clients; in contrast, other costs incurred by Golden State, but not identifiable with
Juarez, Inc. uses a job-order costing system for its products, which pass from the Machining Department, to the Assembly Department, to finished-goods inventory. The Machining Department is heavily automated; in contrast, the Assembly Department performs a number of manual-assembly activities.The
Southwestern Fashions, Inc. which uses a job-order costing system, had two jobs in process at the start of the year: job no. 101 ($168,000) and job no. 102 ($107,000). The following information is available:a. The company applies manufacturing overhead on the basis of machine hours (based on
Dessert Delite Company produces frozen microwavable desserts. The following accounts appeared in the ledger as of December 31.Additional information:a. Accounts payable is used only for direct-material purchases.b. Underapplied overhead of $3,500 for the year has not yet been closed into cost of
The following data refer to Mister Munchie, Inc. for the year 20x4.Required:1. Prepare Mister Munchie’s schedule of cost of goods manufactured for 20x4.2. Prepare the company’s schedule of cost of goods sold for 20x4. The company closes overapplied or underapplied overhead into Cost of Goods
Birmingham Bowling Ball Company (BBBC) uses a job-order costing system to accumulate manufacturing costs. The company’s work-in-process on December 31, 20x3, consisted of one job (no. 3088), which was carried on the year-end balance sheet at $78,400. There was no finished-goods inventory on this
Vermont Clock Works manufactures fine, handcrafted clocks. The firm uses a job-order costing system, and manufacturing overhead is applied on the basis of direct-labor hours. Estimated manufacturing overhead for the year is $260,000. The firm employs 10 master clockmakers, who constitute the
Dewitt Educational Products started and finished job number RM67 during June. The job required$5,100 of direct material and 40 hours of direct labor at $18 per hour. The predetermined overhead rate is $6 per direct-labor hour.Required: Prepare journal entries to record the incurrence of production
Cherry Hill Glass Company employs a normal-costing system. The following information pertains to the year just ended.• Total manufacturing costs were $1,250,000.• Cost of goods manufactured was $1,212,500.• Applied manufacturing overhead was 30 percent of total manufacturing costs.•
Shawn Toy Company incurred the following costs to produce job number TB78, which consisted of 1,000 teddy bears that can walk, talk, and play cards.Direct material:8/11/x0 Requisition number 201: 500 yards of fabric at $.90 per yard 8/12/x0 Requisition number 208: 600 cubic feet of stuffing at $.40
Rexford Company manufactures finger splints for kids who get tendonitis from playing video games.The firm had the following inventories at the beginning and end of the month of January.January 1 January 31 Finished goods ................................................. $162,500 $152,100 Work in
For each of the following companies, indicate whether job-order or process costing is more appropriate.1. Manufacturer of household cleaning solutions.2. Manufacturer of custom hot tubs and spas.3. Architectural firm.
Explain how a Texas Instruments engineer might use bar code technology to record the time she spends on various activities.
Describe how a large retailer such as Lowes could use EDI.
Briefly describe two ways of closing out overapplied or underapplied overhead at the end of an accounting period.
What is the cause of overapplied or underapplied overhead?
Why are some manufacturing firms switching from direct-labor hours to machine hours or throughput time as the basis for overhead application?
Give an example of how a hospital, such as the Mayo Clinic , might use job-order costing concepts.
Describe the flow of costs through a product-costing system. What special accounts are involved, and how are they used?
What is meant by the term cost driver? What is a volume-based cost driver?
Describe how job-order costing concepts are used in professional service firms, such as law practices and consulting firms.
Define each of the following terms, and explain the relationship among them: ( a ) overhead cost distribution, ( b ) service department cost allocation, and( c ) overhead application.
Describe the process of two-stage cost allocation in the development of departmental overhead rates.
Describe some costs and benefits of using multiple overhead rates instead of a plantwide overhead rate.
When a single, volume-based cost driver (or activity base) is used to apply manufacturing overhead, what is the managerial accountant’s primary objective in selecting the cost driver?
Explain the difference between actual and normal costing.
Describe an important cost-benefit issue involving accuracy versus timeliness in accounting for overhead.
Describe one advantage and one disadvantage of prorating overapplied or underapplied overhead.
Explain the benefits of using a predetermined overhead rate instead of an actual overhead rate.
Why is manufacturing overhead applied to products when product costs are used in making pricing decisions?
What are the purposes of the following documents:( a ) material requisition form, ( b ) labor time record, and( c ) job-cost record.
How is the concept of product costing applied in service industry firms?
Explain the difference between job-order and process costing.
List and explain four purposes of product costing.
Describe the process of project costing used in service industry firms and nonprofit organizations.
Describe the two-stage allocation process used to assign manufacturing overhead costs to production jobs.
Prepare journal entries to record the costs of direct material, direct labor, and manufacturing overhead in a job-order costing system.
Compute a predetermined overhead rate and explain its use in job-order costing for job-shop and batch-production environments.
Distinguish between job-order costing and process costing.
Diagram and explain the flow of costs through the manufacturing accounts used in product costing.
Discuss the role of product and service costing in manufacturing and nonmanufacturing firms.
The controller for Oneida Vineyards, Inc. has predicted the following costs at various levels of wine output.Wine Output (.75 Liter Bottles)10,000 Bottles 15,000 Bottles 20,000 Bottles Variable production costs ................................................... $ 44,400 $ 66,600 $ 88,800 Fixed
Piedmont Industries currently manufactures 40,000 units of part JR63 each month for use in production of several of its products. The facilities now used to produce part JR63 have a fixed monthly cost of $165,000 and a capacity to produce 74,000 units per month. If the company were to buy part JR63
Toledo Toy Company incurred the following costs during 20x4. The company sold all of its products manufactured during the year.During 20x4, the company operated at about half of its capacity, due to a slowdown in the economy. Prospects for 20x5 are slightly better. Jared Lowes, the marketing
The Department of Natural Resources is responsible for maintaining the state’s parks and forest lands, stocking the lakes and rivers with fish, and generally overseeing the protection of the environment.Several costs incurred by the agency are listed below. For each cost, indicate which of the
Refer to Exhibit 2–3 , and answer the following questions.Required:1. List the major differences between the income statements shown for Caterpillar, Walmart, and Southwest Airlines .2. Explain how cost-accounting data were used to prepare these income statements.3. On the income statement for
On May 10, after the close of business, Fresno Furniture Company had a devastating fire that destroyed the company’s work-in-process and finished-goods inventories. Fortunately, all raw materials escaped damage because materials owned by the firm were stored in another warehouse. The following
Scranton Refrigeration Corporation began operations at the beginning of the current year. One of the company’s products, a compressor, sells for $370 per unit. Information related to the current year’s activities follows.Required:1. Determine the cost of the December 31 finished-goods
Determine the missing amounts in each of the following independent cases. Sales Beginning inventory, raw material Ending inventory, raw material Purchases of raw material Direct material used. Direct labor Manufacturing overhead Total manufacturing costs. Beginning inventory, work in process Ending
LaJolla Airways operates commuter flights in California. Due to a political convention held in San Diego, the airline added several extra flights during a two-week period. Additional cabin crews were hired on a temporary basis. However, rather than hiring additional flight attendants, the airline
For each of the following costs, indicate whether the amount is a direct or indirect cost of the equipment maintenance department. Also indicate whether each cost is at least partially controllable by the department supervisor.1. Cost of electricity used in the maintenance department.2.
Indicate for each of the following costs whether it is a product cost or a period cost.1. Cost of grapes purchased by a winery.2. Depreciation on pizza ovens in a pizza restaurant.3. Cost of plant manager’s salary in a computer production facility.4. Wages of security personnel in a department
Kaleidoscope Cutlery manufactures kitchen knives. One of the employees, whose job is to cut out wooden knife handles, worked 49 hours during a week in January. The employee earns $14 per hour for a 40-hour week. For additional hours the employee is paid an overtime rate of $19 per hour. The
List the costs that would likely be included in each of the following marginal-cost calculations.1. The marginal cost of adding a flight from Syracuse to Miami.2. The marginal cost of keeping a travel agency open one additional hour on Saturdays.3. The marginal cost of manufacturing one additional
Global Communications, Inc. manufactures communications satellites used in TV signal transmission.The firm currently purchases one component for its satellites from a European firm. A Global Communications engineering team has found a way to use the company’s own component, part number A200,
Suppose you paid $75 for a ticket to see your university’s football team compete in a bowl game. Someone offered to buy your ticket for $100, but you decided to go to the game.Required:1. What did it really cost you to see the game?2. What type of cost is this?
The state Department of Education owns a computer system, which its employees use for word processing and keeping track of education statistics. The governor’s office recently began using this computer also. As a result of the increased usage, the demands on the computer soon exceeded its
A hotel pays the phone company $200 per month plus $.15 for each call made. During January 7,000 calls were made. In February 8,000 calls were made.Required:1. Calculate the hotel’s phone bills for January and February.2. Calculate the cost per phone call in January and in February.3. Separate
Thomas Cleverly purchased a vacant lot outside of London for £17,200, because he heard that a shopping mall was going to be built on the other side of the road. He figured that he could make a bundle by putting in a fast-food outlet on the site. As it turned out, the rumor was false. A sanitary
Find The Boeing Company ’s website on the Internet, www.boeing.com .Required: Read on the company’s website about how Boeing operates and serves its customers. Then briefly explain what type of manufacturing process would be best for Boeing.
A loom operator in a Carolina Textiles factory earns $17 per hour. The employee earns $22 for overtime hours. The operator worked 43 hours during the first week of May, instead of the usual 40 hours.Required:1. Compute the loom operator’s compensation for the week.2. Calculate the employee’s
An employee of Olentangy Foundry, Inc. worked a normal 40-hour shift, but four hours were idle due to a small fire in the plant. The employee earns $16 per hour.Required:1. Calculate the employee’s total compensation for the week.2. How much of this compensation is a direct-labor cost? How much
For each case below, find the missing amount. Beginning inventory of finished goods Cost of goods manufactured during period Ending inventory of finished goods Cost of goods sold Case I ? $104,750 Case II $ 18,000 142,500 24,500 12,000 101,250 ? Case III $ 3,500 ? 10,500 152,000
Consider the following costs that were incurred during the current year:1. Advertising costs of Nike.2. Straight-line depreciation on factory machinery of Airbus Industrie.3. Wages of assembly-line personnel of Amana.4. Delivery costs on customer shipments of Ben & Jerry’s ice cream.5. Newsprint
Indicate whether each of the following costs is a direct cost or an indirect cost of the restaurant in a hotel.a. Cost of food served.b. Chef’s salary and fringe benefits.c. Part of the cost of maintaining the grounds around the hotel, which is allocated to the restaurant.d. Part of the cost of
Two years ago the manager of a large department store purchased new bar code scanners costing $39,000.
Think about the process of registering for classes at your college or university. What additional information w ould you like to have before you register? How would it help you? What sort of information might create i nformation overload for you?
Distinguish between marginal and average costs.
Define the terms sunk cost and differential cost.
Distinguish between out-of-pocket costs and opportunity costs.
Which of the following costs are likely to be controllable by the chief of nursing in a hospital?a. Cost of medication administered.b. Cost of overtime paid to nurses due to scheduling errors.c. Cost of depreciation of hospital beds.
List three costs that are likely to be controllable by a city’s airport manager. List three costs that are likely to be uncontrollable by the manager.
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