Acc 206

Topics: Variable cost, Costs, Cost Pages: 6 (1101 words) Published: June 11, 2013
ACC 206 Week 3 Assignment: Chapter 4 and 5 Problems

Please complete the following 7 exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button.

Chapter 4 Exercise 7
7. Overhead application: Working backward
The Towson Manufacturing Corporation applies overhead on the basis of machine hours. The following divisional information is presented for your review: |Division A |Division B | |Actual machine hours |22,500 |? | |Estimated machine hours |20,000 |? | |Overhead application rate |$4.50 |$5.00 | |Actual overhead |$110,000 |? | |Estimated overhead |? |$90,000 | |Applied overhead |? |$86,000 | |Over- (under-) applied overhead

Division A:
Estimated Overhead = Estimated Machine Hours * Overhead Application Rate Estimated Overhead = 20,000 * $4.50
Estimated Overhead

$90,000.00

Applied Overhead = Actual Machine Hours * Overhead Application Rate Applied Overhead = 22,500 * $4.50
Applied Overhead

$101,250.00

Under Applied Overhead = Applied Overhead - Actual Overhead
Under Applied Overhead = $101,250 - $110,000

Under Applied Overhead
-$8,750.00 |? |$6,500 | |Find the unknowns for each of the divisions.

Chapter 4 Problem 2
2. Computations using a job order system
General Corporation employs a job order cost system. On May 1 the following balances were extracted from the general ledger;

Work in process $ 35,200
Finished goods 86,900
Cost of goods sold 128,700

Work in Process consisted of two jobs, no. 101 ($20,400) and no. 103 ($14,800). During May, direct materials requisitioned from the storeroom amounted to $96,500, and direct labor incurred totaled $114,500. These figures are subdivided as follows:

Direct Materials

Direct Labor

Job No.

Amount

Job No.

Amount

101

$5,000

101

$7,800

115

19,500

103

20,800

116

36,200

115

42,000

Other

35,800

116

18,000

$96,500

Other

25,900

$114,500

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |Job no. 115 was the only job in process at the end of the month. Job no. 101 and three "other" jobs were sold during May at a profit of 20% of cost. The "other" jobs contained material and labor charges of $21,000 and $17,400, respectively.

General applies overhead daily at the rate of 150% of direct labor cost as labor summaries are posted to job orders. The firm's fiscal year ends on May 31.

Instructions:
Compute the total overhead applied to production during May. 114,500*.20= $22,900 Compute the cost of the ending work in process inventory. 128,700-86,900=$41,800 Compute the cost of jobs completed during May. 114,500+96,500=$211,000 Compute the cost of goods sold for the year ended May 31. 128,700+96,500=$225,200

Chapter 5 Exercise 1
1. High-low method
The following cost data pertain to 20X6 operations of Heritage Products: |Quarter 1 |Quarter 2 |Quarter 3 |Quarter 4 | |Shipping costs |$58,200 |$58,620 |$60,125 |$59,400 | |Orders shipped |120 |140 |175 |150 | |1st quarter58,200/120=v-cost $485.00 shipping cost 485.00/120= $4.04*570=2,302.00 ship cost 20X7 2nd quarter58,620/140=v- cost $418.72ship cost 418.72/140= $2.99*570= $1,704.30 ship cost 20X7 3rd quarter 60,125/175=v-cost $343.57ship cost 343.57/175= $1.96*570= $1117.20 ship cost 20X7 4th quarter59400/150= v=cost $396ship cost 396/150= $2.64*570= $1504.80 ship cost 20X7 The company uses the high-low method to analyze costs. Determine the variable cost per order shipped.

Determine the fixed shipping costs per quarter.
If present cost behavior patterns continue,...
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