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 $

6.

Erkkila Inc. reports that at an activity level of 8,100 machine-hours in a month, its total variable inspection cost is $231,579 and its total fixed inspection cost is $196,830. What would be the total variable inspection cost at an activity level of 8,300 machine-hours in a month?

Assume that this level of activity is within the relevant range. (Do not round your intermediate calculations. Round your final answer to nearest whole dollar.)

$231,579

$201,690

$428,409

$237,297

7.

Mannarelli Corporation uses the FIFO method in its process costing system. Operating data for the Casting Department for the month of September appear below:

Units

Percent Complete with Respect to

Conversion

Beginning work in process inventory 30,000 20%

Transferred in from the prior department during September 121,000

Ending work in process inventory 40,000 90%

According to the company's records, the conversion cost in beginning work in process inventory was $17,260 at the beginning of September. Additional conversion costs of $542,568 were incurred in the department during the month. The cost per equivalent unit for conversion costs for September is closest to (Round off to three decimal places.):

$4.484

$3.707

$3.654

$3.848

8.

Budget data for the Bidwell Company are as follows:

Sales (130,000 units) $1,300,000

Expenses: Fixed Variable

Raw materials $ 390,000

Direct labor 260,000

Overhead $ 130,000 195,000

Selling and administrative 143,000 65,000

Total expenses $ 273,000 $ 910,000 1,183,000

Net operating income $ 117,000

The number of units Bidwell would have to sell to earn a net operating income of $195,000 is:

130,000 units

91,000 units

156,000 units

195,000 units

9.

Wilson Company has a process costing system. The Assembly Department had the following costs for May:

Materials Labor & Overhead

Work in process inventory, May 1 $ 64,000 $ 51,000

Costs added during May $ 238,000 $ 119,000

Assume that Wilson uses the weighted-average method and that for May the company computed 17,000 equivalent units for labor and overhead. The cost per equivalent unit for labor and overhead for the month would have been:

$10.00

$21.00

$7.00

$3.00

10.

DeAnne Company produces a single product. The company's variable costing income statement

for August appears below:

DeAnne Company Income statement

For the month ended August 31

Sales ($19 per unit) $798,000

Variable expenses:

Variable cost of goods sold 378,000

Variable selling expense 84,000

Total variable expenses 462,000

Contribution margin 336,000

Fixed expenses:

Fixed manufacturing 111,000

Fixed selling and administrative 37,000

Total fixed expenses 148,000

Net operating income $188,000

The company produced 37,000 units in August and the beginning inventory consisted of 10,000

units. Variable production costs per unit and total fixed costs have remained constant over the

past several months. The value of the company's inventory on August 31 under the absorption costing method is (Do

not round your intermediate calculations.):

$45,000

$60,000

$74,405

$70,000

11.

Carr Company produces a single product. During the past year, Carr manufactured 43,000 units

and sold 29,000 units. Production costs for the year were as follows:

Fixed manufacturing overhead $ 430,000

Variable manufacturing overhead $ 548,250

Direct labor $ 361,200

Direct materials $ 464,400

Sales totaled $2,233,000, variable selling expenses totaled $438,600, and fixed selling and

administrative expenses totaled $188,000. There were no units in beginning inventory. Assume

that direct labor is a variable cost. Under absorption costing, the ending inventory for the year would be valued at (Do not round

your intermediate calculations.):

$678,059

$788,509

$587,300

$753,997

12.

Hickory Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: (The total estimated overhead cost may not agree with the sum of allocated overhead costs to each product.)

Activity Cost Pool Activity Measure

Estimated Overhead

Cost Expected Activity

Machining Machine-hours $ 213,400 11,000 MHs

Machine setups Number of setups $ 61,600 140 setups

Production design Number of products $ 78,000 2 products General factory Direct labor-hours $ 244,000 10,000 DLHs

Activity Measure Product Y Product Z

Machining 6,400 4,600

Number of setups 60 80

Number of products 1 1 Direct labor-hours 7,400 2,600

Required: What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.)

Machining activity cost pool $ per MH

13.

Tsuchiya Corporation manufactures a variety of products. Last year, the company's variable

costing net operating income was $78,500. Fixed manufacturing overhead costs deferred in

inventory under absorption costing amounted to $48,000. What was the absorption costing net

operating income last year?

$48,000

$126,500

$30,500

$78,500

14.

Smith Company sells a single product at a selling price of $30 per unit. Variable expenses are $12 per unit and fixed expenses are $62,100. Smith's break-even point is:

10,350 units

3,450 units

2,070 units

5,175 units

15.

On April 1, Stelter Corporation had $38,000 of raw materials on hand. During the month, the company purchased an additional $64,000 of raw materials. During April, $74,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $7,400. Prepare journal entries to record these events. Use those journal entries to answer the following question: