Log in
HomeStudy Guides420,000CA160,000

ACCT 323 Study Guide - Quiz Guide: Finished Good, Income Statement, Sunk Costs

143 views2 pages
School
University of Calgary
Department
Accounting
Course
ACCT 323
Professor
Anita Lakra

For unlimited access to Study Guides, a Grade+ subscription is required.

Document Summary

Chapter 2 - cost terms, concepts and classifications. Manufacturing costs - divided into direct materials, direct labour and manufacturing overhead. Direct materials: materials that become an integral part of the finished product and can be conveniently traced to it. Note - raw materials are any materials used in the final product; a finished product can be raw material for another product; raw materials can be both direct or indirect materials. Direct labour: factory labour costs that can be conveniently traced to individual units of product. Manufacturing overhead - all costs associated with manufacturing, except direct materials and direct labour. Indirect materials: small items of materials used in a finished product; cost of tracing exceeds benefits. Indirect labour: labour costs of janitors, supervisors, materials handlers and other factor workers that cannot be conveniently traced to individual units of product. Prime cost = direct materials + direct labour. Conversion cost = direct labour + manufacturing overhead.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers

Related Documents

ACCT 323
Final Exam
Study Guide
ACCT 323 Study Guide - Quiz Guide: Fixed Cost, Variable Cost, Cost Driver
copperkangaroo711

Related Questions

Case 3-49

Avid Assemblers uses normal job-order costing to assign costs toproducts. The company assembles and packages 25 different productsaccording to customer specifications. Products are worked on inbatches of 20 to 40 units. Each batch is given a job number. OnOctober 1, the company had the following balances:

Raw materials $9,800
Work in process 65,847
Finished goods 30,640


Work in process consisted of the following jobs:

Job 22 Job 24 Job 25
Direct materials $6,200 $5,190 $4,800
Direct labour 10,500 9,210 9,500
Applied overhead 7,350 6,447 6,650
Total $24,050 $20,847 $20,950
Number of units 20 40 30


Finished goods consisted of Job 23, with the following costs:

Job 23
Direct materials $8,200
Direct labour 13,200
Applied overhead 9,240
Total $30,640
Number of units 50


Shown below are the direct cost data related to jobs started inOctober:

Job 26 Job 27 Job 28 Total
Direct materials $5,180 $5,600 $4,200 $14,980
Direct labour 11,200 9,340 5,910 26,450
Number of units 20 30 20


Other information:

1. Direct materials and direct labour added tobeginning work in process in October were as follows:
Job 22 Job 24 Job 25 Total
Direct materials $1,150 $610 $1,500 $3,260
Direct labour 3,000 4,500 5,500 $13,000
2. Overhead is applied at a predetermined rate basedon the direct labour cost.
3. Actual expenses for October were as follows:
Supervisory salaries $6,000 Supplies (factory) $2,100
Factory rent 5,000 Selling expenses 8,500
Depreciation (machines) 5,000 Property tax and insurance 2,250
Indirect labour 4,000 CPP, EI, and other benefits* 4,200

* 80% of employer contributions and benefits relate to factorypersonnel.
4. Purchases of direct materials (raw materials)during October amounted to $28,500. Indirect materials (supplies)are handled in a separate account.
5. Only Job Nos. 27 and 28 are still in process atclosing on October 31. Finished goods consisted only of Job No. 25at month end.

6.

Avid writes off any under- and over-applied overhead to Cost ofGoods Sold in the month in which it is incurred.

Requirements:

a.Calculate Predetermined overhead rate

b.Calculate Unit cost of job 24 in October

c.Calulate the Oct 31 Balances for the following account:

Raw Materials, Work in Process, Finished Goods

d.What is the cost of goods manufactured?

e. Determine the under- or over- paid in October

Prepare the journal entry to dispose of this amount.

Problem 25-1A Partially correct answer. Your answer is partially correct. Try again. Costello Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials—3 pound plastic at $6.83 per pound $ 20.49 Direct labor—1.50 hours at $12.00 per hour 18.00 Variable manufacturing overhead 9.00 Fixed manufacturing overhead 9.00 Total standard cost per unit $56.49 The predetermined manufacturing overhead rate is $12 per direct labor hour ($18.00 ÷ 1.50). It was computed from a master manufacturing overhead budget based on normal production of 8,250 direct labor hours (5,500 units) for the month. The master budget showed total variable costs of $49,500 ($6.00 per hour) and total fixed overhead costs of $49,500 ($6.00 per hour). Actual costs for October in producing 3,400 units were as follows. Direct materials (10,310 pounds) $ 71,551 Direct labor (4,950 hours) 60,489 Variable overhead 43,144 Fixed overhead 19,916 Total manufacturing costs $195,100 The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored. (a) Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)

Total materials variance

Materials price variance

Materials quantity variance

Total labor variance

Labor price variance

Labor quantity variance

(b) Compute the total overhead variance.

Total overhead variance

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below.

Direct materials—1 pound plastic at $6 per pound $ 6.00
Direct labor—2.00 hours at $11.15 per hour 22.30
Variable manufacturing overhead 14.00
Fixed manufacturing overhead 18.00
Total standard cost per unit $60.30


The predetermined manufacturing overhead rate is $16 per direct labor hour ($32.00 ÷ 2.00). It was computed from a master manufacturing overhead budget based on normal production of 12,000 direct labor hours (6,000 units) for the month. The master budget showed total variable costs of $84,000 ($7.00 per hour) and total fixed overhead costs of $108,000 ($9.00 per hour). Actual costs for October in producing 4,100 units were as follows.

Direct materials (4,250 pounds) $ 26,350
Direct labor (8,070 hours) 92,402
Variable overhead 99,710
Fixed overhead 33,590
Total manufacturing costs $252,052


The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.

(a)

Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)

(b)

Compute the total overhead variance.