Accounting
Cost Accounting -- MIDTERM 1
1) Pointed Pencil company incurs the following costs in its manufacture of pencils. Classify each one of them according to one of the value chain functions:
Functions:
A) Research and Development
B) Design of products, services, and processes.
C) Production
D) Marketing
E) Distribution
F) Customer Service
G) Strategy and Administration
____ 1) Cost of wood used in manufacture of pencils.
____ 2) Cost of wood used in packing cartons to ship pencils.
____ 3) Cost of wood used in display at national trade show.
____ 4) Depreciation of the wood used in the manufacturing plant.
____ 5) Salary of the scientists attempting to find another source of writing material.
____ 6) Cost of customer order forms.
____ 7) Depreciation of delivery trucks.
2) Elm Table Company manufactures tables. The company uses a budgeted indirect-cost rate for its manufacturing operations, and in 19X9 allocated the following amounts to the work-in process inventory, finished-goods inventory, and cost-of-goods-sold categories, respectively: $25,000; $75,000; $900,000. The actual overhead incurred was $1,100,000.
Ending balances in the relevant accounts were:
Work-in-process $ 100,000
Finished Goods 750,000
Cost of Goods Sold 24,150,000
Requirements:
A) Prepare a journal entry to write-off the difference between allocated and actual overhead directly to cost of goods sold. Be sure your journal entry closes the related overhead accounts.
B) Prepare a journal entry that prorates the write-off of the difference between allocated and actual overhead using ending account balances.
C) Prepare a journal entry that prorates the write-off of the difference between allocated and actual overhead using overhead amounts allocated during the year to the respective accounts as the rate basis.
The following information will be used for #3 and #4.
Perfect Writer produces and sells boxes of pens for $10.00 per box. Direct materials are $4 per box,
1) Pointed Pencil company incurs the following costs in its manufacture of pencils. Classify each one of them according to one of the value chain functions:
Functions:
A) Research and Development
B) Design of products, services, and processes.
C) Production
D) Marketing
E) Distribution
F) Customer Service
G) Strategy and Administration
____ 1) Cost of wood used in manufacture of pencils.
____ 2) Cost of wood used in packing cartons to ship pencils.
____ 3) Cost of wood used in display at national trade show.
____ 4) Depreciation of the wood used in the manufacturing plant.
____ 5) Salary of the scientists attempting to find another source of writing material.
____ 6) Cost of customer order forms.
____ 7) Depreciation of delivery trucks.
2) Elm Table Company manufactures tables. The company uses a budgeted indirect-cost rate for its manufacturing operations, and in 19X9 allocated the following amounts to the work-in process inventory, finished-goods inventory, and cost-of-goods-sold categories, respectively: $25,000; $75,000; $900,000. The actual overhead incurred was $1,100,000.
Ending balances in the relevant accounts were:
Work-in-process $ 100,000
Finished Goods 750,000
Cost of Goods Sold 24,150,000
Requirements:
A) Prepare a journal entry to write-off the difference between allocated and actual overhead directly to cost of goods sold. Be sure your journal entry closes the related overhead accounts.
B) Prepare a journal entry that prorates the write-off of the difference between allocated and actual overhead using ending account balances.
C) Prepare a journal entry that prorates the write-off of the difference between allocated and actual overhead using overhead amounts allocated during the year to the respective accounts as the rate basis.
The following information will be used for #3 and #4.
Perfect Writer produces and sells boxes of pens for $10.00 per box. Direct materials are $4 per box,