The donaldson company uses a job order costing system

Chapters 1-6 FiveStarLaw- Can you help me with this? Needed by 11/25/13 Principles of Accounting II 1.

Maintenance costs at a Tierce Corporation factory are listed below:

Machine - Hours Maintenance Cost

January 4,198 $ 60,787

February 4,161 $ 60,545

March 4,114 $ 59,859

April 4,156 $ 55,785

May 4,177 $ 60,650

June 4,135 $ 59,670

July 4,190 $ 60,726

August 4,169 $ 60,546

September 4,068 $ 59,352

Management believes that maintenance cost is a mixed cost that depends on machine-hours. Using the high-low method to estimate the variable and fixed components of this cost, these estimates would be closest to:

$6.54 per machine-hour; $33,332 per month

$13.42 per machine-hour; $55,785 per month

$11.04 per machine-hour; $14,441 per month

$11.04 per machine-hour; $15,876 per month

2.

Sperberg Corporation's operating leverage is 4.8. If the company's sales increase by 13.75%, its net operating income should increase by about:

13.75%

4.80%

57.05%

66.00%

3.

The following partially completed T-accounts summarize transactions for Fabatz Company during the year:

Raw Materials

Beg Bal 1,650 8,800

8,800

Work in Process

Beg Bal 2,800 22,100 7,650 8,200 4,800

Finished Goods

Beg Bal 6,400 23,300 22,100

Manufacturing Overhead

1,150 4,800 2,500 1,700

Wages and Salaries Payable

13,700 Beg Bal 1,250 13,700

Cost of Goods Sold

23,300

The manufacturing overhead was:

$550 underapplied

$1,700 overapplied

$550 overapplied

$1,700 underapplied

4.

Candice Corporation has decided to introduce a new product. The product can be manufactured using either a capital-intensive or labor-intensive method. The manufacturing method will not affect the quality or sales of the product. The estimated manufacturing costs of the two methods are as follows:

Capital- Labor-Intensive

Intensive Variable manufacturing cost per unit $ 14.00 $ 17.60 Fixed manufacturing cost per year $ 2,524,000 $ 1,382,400

The company's market research department has recommended an introductory selling price of $30 per unit for the new product. The annual fixed selling and administrative expenses of the new product are $500,000. The variable selling and administrative expenses are $2 per unit regardless of how the new product is manufactured.

Required: a. Calculate the break-even point in units if Candice Corporation uses the (Do not round intermediate

calculations.):

Break-even point

in units

Capital-intensive manufacturing method

Labor-intensive manufacturing method

b. Determine the unit sales volume at which the net operating income is the same for the two manufacturing methods. (Do not round intermediate calculations. Round your answer to the nearest whole number.)

Sales volume

c. Assuming sales of 310,000 units, what is the degree of operating leverage if the company uses the: (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Degree of operating

leverage

Capital-intensive manufacturing method

Labor-intensive manufacturing method

d. What is your recommendation to management concerning which manufacturing method should be used, if the sales volume is in excess of the one calculated under Requirement (b)?

Labor-intensive manufacturing method

Capital-intensive manufacturing method

5.

Ermoin Inc. uses the FIFO method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Work in process, beginning: Units in process 1,300 Percent complete with respect to materials 80 %

Percent complete with respect to conversion 20 % Costs in the beginning inventory: Materials cost $ 3,040 Conversion cost $ 5,165 Units started into production during the month 16,800 Units completed and transferred out 16,800 Costs added to production during the month: Materials cost $ 113,960 Conversion cost $ 507,900 Work in process, ending: Units in process 1,300 Percent complete with respect to materials 40 % Percent complete with respect to conversion 30 %

Required:

Using the FIFO method:

a. Determine the equivalent units of production for materials and conversion costs.

Materials Conversion

Equivalent units of production

b. Determine the cost per equivalent unit for materials and conversion costs. (Round your answers to

2 decimal places.)

Materials Conversion

Cost per equivalent unit $ $

c. Determine the cost of ending work in process inventory. (Round your intermediate calculations to

2 decimal places and final answer to the nearest dollar amount.)

Cost of ending work in process inventory $

d. Determine the cost of units transferred out of the department during the month. (Round your

intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)

Cost of units transferred out $