Using a spreadsheet and based on the information provided in the next section, complete the following requirements:
1. Determine the predetermined overhead rate.

2. Determine the total number of frames to account for.

3. Prepare an equivalent unit's schedule.                        Equivalent Units

	Whole Units (Actual)	Direct Materials Wood	Direct Materials Glass	Conversion Costs
Beginning
Start/Completed
Completed/Transferred Out
Ending

 

 

4. Determine the total cost for the wood and the unit amount for the wood for one frame. 

Transcribed Image Text:

Manufacturing Process Information Mr. Frank, the CEO of Frank's Frames, Inc. has begun a small manufacturing process that will manufacture picture frames and then sell the frames to merchandising companies. The manufacturing process starts with the construction of the wood molding, inspected and then glass will be installed as a final step in the process. Once the frames are completed they are then transferred to finished goods. This is a process cost system and the company elects to use the FIFO method of accounting for product costs. Direct material-wood is added 100% at the beginning of the process. Direct material glass is added 100% as the last step in the manufacturing process. At the beginning of the accounting period, Mr. Frank estimates that production will be 80,000 frames during the year. Estimated factory overhead is $40,000. This information is to be used to determine the application rate for the manufacturing overhead. Estimated and actual direct labor costs totaled $29,100. Actual factory overhead costs totaled $36,000. The following information is available concerning direct materials. Direct Materials-Wood O board feet 240,000 board feet @ $1.60 a foot Beginning inventory Purchase of wood The company starts 75,000 frames. Each frame contains three board feet of wood molding. Direct Material-Glass Beginning inventory Purchases of glass Used 72,000 panes this period. O panes of glass 240,000 panes of glass @ $.25 per pane The Work-in-Process account has the following information: Ending work in process inventory is 100% complete as to wood molding 25% complete as to conversion costs 0% complete as to glass panes The Finished Goods account has the following Information: The finished goods inventory at January 1, 2018 had a balance of 20,000 frames at a cost of $140,000 and on December 31, 2018 had an ending balance of 10,000 frames. The selling price of the frame is $10.00. Selling and Administrative Costs totaled $100,0003; tax rate is 30%. Manufacturing Process Information Mr. Frank, the CEO of Frank's Frames, Inc. has begun a small manufacturing process that will manufacture picture frames and then sell the frames to merchandising companies. The manufacturing process starts with the construction of the wood molding, inspected and then glass will be installed as a final step in the process. Once the frames are completed they are then transferred to finished goods. This is a process cost system and the company elects to use the FIFO method of accounting for product costs. Direct material-wood is added 100% at the beginning of the process. Direct material glass is added 100% as the last step in the manufacturing process. At the beginning of the accounting period, Mr. Frank estimates that production will be 80,000 frames during the year. Estimated factory overhead is $40,000. This information is to be used to determine the application rate for the manufacturing overhead. Estimated and actual direct labor costs totaled $29,100. Actual factory overhead costs totaled $36,000. The following information is available concerning direct materials. Direct Materials-Wood O board feet 240,000 board feet @ $1.60 a foot Beginning inventory Purchase of wood The company starts 75,000 frames. Each frame contains three board feet of wood molding. Direct Material-Glass Beginning inventory Purchases of glass Used 72,000 panes this period. O panes of glass 240,000 panes of glass @ $.25 per pane The Work-in-Process account has the following information: Ending work in process inventory is 100% complete as to wood molding 25% complete as to conversion costs 0% complete as to glass panes The Finished Goods account has the following Information: The finished goods inventory at January 1, 2018 had a balance of 20,000 frames at a cost of $140,000 and on December 31, 2018 had an ending balance of 10,000 frames. The selling price of the frame is $10.00. Selling and Administrative Costs totaled $100,0003; tax rate is 30%.

Answer rating: 100% (QA)

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