Sonor Instruments Co. uses three operations in sequence to make two models of its depth finders for
Question:
Sonor Instruments Co. uses three operations in sequence to make two models of its depth finders for sport fishing. Consider the following:
1. Operation 2 was highly automated. Product costs depended on a budgeted application rate for conversion costs based on machinehours. The budgeted costs for 2011 were $220,000 direct labour and $580,000 factory overhead. Budgeted machine-hours were 20,000. Each depth finder required six minutes of time in Operation 2. Compute the costs of processing 1,000 depth finders in Operation 2.
2. Compute the total manufacturing costs of 1,000 depth finders and the cost per standard depth finder and per deluxe depth finder.
3. Suppose that at the end of the year, 500 standard depth finders were in process through Operation 1 only and 600 deluxe depth finders were in process through Operation 2 only. Compute the cost of the ending work-in-process inventory. Assume that no direct materials are applied in Operation 2, but that $10,000 of the $100,000 direct materials cost of the deluxe depth finders are applied to each 1,000 depth finders processed in Operation 3.
Step by Step Answer:
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu