Exam 17: Job Order and Process Costing

Felton Quality Productions Company has provided the following information for the year 2012: Actual manufacturing overhead costs incurred \ 89,770 Manufacturing overhead costs allocated to production \ 95,200 Actual direct materials cost \ 224,000 Actual direct labor cost \ 93,750 Actual direct labor hours 18,500 direct labor hours Actual machine hours 56,000 machine hours Based on the above information, what was Felton's allocation rate? (Hint: for this type of problem, the "trial and error" method may be used.)

Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail business. They have 4 professionals on staff, plus an office with 6 clerical staff. Total compensation, including benefits, for the professional staff runs about $576,000 per year, and they normally have about 8,000 billable hours per year. Professional staff keep detailed time sheets distributed by client number. Office and administrative costs total $754,000 a year. -Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail business. They have 4 professionals on staff, plus an office with 6 clerical staff. Total compensation, including benefits, for the professional staff runs about $576,000 per year, and they normally have about 8,000 billable hours per year. Professional staff keep detailed time sheets distributed by client number. Office and administrative costs total $754,000 a year. Bilkins allocates professional time and administrative costs to clients monthly, using allocation rates based on billable hours. During July, Bilkins' professionals spent 36 hours on their client, Soupy Sales. Bilkins adds a 25% markup on their costs to calculate amount billed to the customer. How much did Bilkins bill their customer Soupy Sales for the month of July?

Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800. In June, Fogelin signed a contract for a Russian ballet performance. They negotiated a price of $6,400 for their services. When the job was complete, Fogelin's records showed that they had logged 36.5 billable hours. - What was the amount of gross profit that Fogelin made on the job?

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters were completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below. Refining Department, beginning balance at January 1, 2012 Quantity: 2,000 units (partially processed) Cost: \ 15,600 of costs transferred in \ 1,900 of materials cost \ 4,500 of conversion cost \ 22,000 total account balance Costs added during January Cost of units transferred in: \ 222,400 Direct materials cost \ 45,000 Conversion cost \ 93,750 $\text { Refining Department, ending balance at January } 31,2012$ Quantity: 5,000 units (partially processed) \% completion for materials cost: 90\% \% completion for conversion cost: 75\% - Please perform a process costing analysis and answer the following question: For the Refining Department in the month of January, what was cost per equivalent unit with respect to direct materials costs? (Please round to nearest cent.)

At the beginning of 2012, Conway Manufacturing Company had the following account balances: During the year, the following transactions took place: Direct materials placed in production: \ 80,000 Direct labor incurred: \ 190,000 Manufacturing overhead incurred \ 300,000 Manufacturing overhead allocated to production: \ 295,000 Jobs completed with cost of : \ 500,000 - After these transactions have been recorded, the preliminary balance in the Finished goods account is a:

Jorst Manufacturing Company began business on January 1, 2012. During its first year of operation, Jorst worked on 5 industrial jobs, and reported the following information at year-end: Job 1 Job 2 Job 3 Job 4 Job 5 Direct Materials 1,00 7,500 4,000 3,500 1,500 Direct Labor 12,00 20,000 13,000 12,000 800 Allocated Mfg. Overhead 1,500 6,000 2,500 7,500 200 Job completed: Jun 30 Sep 1 Oct 15 Nov 1 Not completed Job sold: Jul 10 Sep 12 Not sold Not sold N/A Revenues: 25,000 39,000 N/A N/A N/A - Jorst's allocation of overhead costs left a debit balance of $1,200 in the Manufacturing overhead account which was adjusted to zero at year-end. What was the final balance in Cost of goods sold?

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the production process, and conversion costs are applied evenly through the process. At the end of the month, LDR calculated equivalent units. The ending inventory in the Mixing Department was 60% complete with respect to conversion costs. -With respect to conversion costs, how many equivalent units were calculated for the product that was completed, and how many equivalent units were calculated for the ending balance?

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the production process, and conversion costs are applied evenly through the process. At the end of January, the equivalent unit data for the Mixing Department were as follows: EQUIVALENT UNITS Equivalent Units Units to account for Transferred In Direct Mt1s Cost Conversion Cost Completed 32,000 0 32,000 32,000 End bal WIP 8,000 0 8,000 4,800 40,000 0 40,000 36,800 - During January, the Mixing Department incurred $48,000 in direct materials costs and $211,600 in conversion costs. At the end of the month, the ending inventory in the Mixing Department was 60% complete with respect to conversion costs. First, calculate the equivalent units, then calculate the cost per equivalent unit, and then calculate the total cost of the product that was completed and transferred out during January. The total cost of product transferred out was:

At the end of the year, Deltona Company has a preliminary debit balance in the Manufacturing overhead account of $3,950. Please provide the year-end adjusting entry needed to clear the balance to zero.

Davie Company used estimated direct labor hours of 180,000 and estimated manufacturing overhead costs of $990,000 in establishing its 2012 predetermined manufacturing overhead rate. Actual results showed: Actual manufacturing overhead \ 950,000 Allocated manufacturing overhead \ 962,500 What was the number of direct labor hours worked during 2009?

In a manufacturing operation, depreciation of the plant and plant equipment should be debited to Depreciation expense.

In a process costing system, equivalent units must be calculated separately for materials and conversion costs.

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the production process, and conversion costs are applied evenly through the process. At the end of January, the equivalent unit data for the Mixing Department were as follows: EQUIVALENT UNITS Equivalent Units Units to account for Transferred In Direct Mt1s Cost Conversion Cost Completed 32,000 0 32,000 32,000 End bal WIP 8,000 0 8,000 4,800 40,000 0 40,000 36,800 -LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the production process, and conversion costs are applied evenly through the process. During January, the Mixing Department incurred $48,000 in direct materials costs and $211,600 in conversion costs. At the end of the month, the ending inventory in the Mixing Department was 60% complete with respect to conversion costs. First, calculate the equivalent units, then calculate the cost per equivalent unit, and then calculate the total cost of the product that was remaining in ending inventory at January 31. The total cost of product in ending inventory was:

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the production process, and conversion costs are applied evenly through the process. At the end of January, the equivalent unit data for the Mixing Department were as follows: EQUIVALENT UNITS Equivalent Units Units to account for Transferred In Direct Mt1s Cost Conversion Cost Completed 32,000 0 32,000 32,000 End bal WIP 8,000 0 8,000 4,800 40,000 0 40,000 36,800 - In addition to the above, the costs per equivalent unit were $1.20 for direct materials and $5.75 for conversion costs. Using this data, please calculate the full cost of the ending balance in the Mixing Department.

Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800. In June, Fogelin signed a contract for a Russian ballet performance. They estimated it would require 34 hours of specialist time. What is the total cost estimate for this contract?

On January 1, 2012, Matthew Company's work in process inventory account had a balance of $30,000. During 2012, $58,000 of direct materials was placed into production. Manufacturing wages incurred amounted to $84,000, of which $66,000 were for direct labor. Manufacturing overhead is allocated on the basis of 120% of direct labor cost. Actual manufacturing overhead was $90,000. Jobs costing $220,400 were completed during 2009. What is the December 31, 2012 balance in work in process inventory?

The entry to record the purchase of materials on account using a job order costing system would include a:

Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800. A new client is contracting with Fogelin to promote a ballet tour in the U.S. Fogelin estimates that the job will require 40 billable hours of specialist time. If Fogelin wishes to make a 25% gross profit on the job, what price should Fogelin quote to the client?

Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail business. They have 4 professionals on staff, plus an office with 6 clerical staff. Total compensation, including benefits, for the professional staff runs about $576,000 per year, and they normally have about 8,000 billable hours per year. Professional staff keep detailed time sheets distributed by client number. Office and administrative costs total $754,000 a year. What is the cost allocation rate that Bilkins will use for office and administrative costs?

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters were completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below. Refining Department, beginning balance at January 1, 2012 Quantity: 2,000 units (partially processed) Cost: \ 15,600 of costs transferred in \ 1,900 of materials cost \ 4,500 of conversion cost \ 22,000 total account balance Costs added during January Cost of units transferred in: \ 222,400 Direct materials cost \ 45,000 Conversion cost \ 93,750 $\text { Refining Department, ending balance at January } 31,2012$ Quantity: 5,000 units (partially processed) \% completion for materials cost: 90\% \% completion for conversion cost: 75\% - Please perform a process costing analysis and answer the following question: For the Refining Department in the month of January, what was the total number of equivalent units with respect to direct materials costs?