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Accounting 7th Edition Charles T. Horngren, Walter T. Harrison - Solutions

Refer to M3-5 for information regarding Incontro Company. Using the FIFO method, calculate Incontro’s cost per equivalent unit for materials and conversion during December.Data from M3-5Incontro Company manufactures file cabinets. The following cost information is available for the month of
The Cutting department of Malcom’s Textiles has the following information about production and costs for the month of July.Beginning work in process, 4,600 units that are 100 percent complete as to materials and 35 percent complete as to conversion costs.7,500 units transferred out.Ending work in
The Cutting department of Malcom’s Textiles has the following information about production and costs for the month of July.Beginning work in process, 4,600 units that are 100 percent complete as to materials and 35 percent complete as to conversion costs.7,500 units transferred out.Ending work in
During its first month of operation, Dutton Company purchased \($45,000\) of materials on account and requisitioned \($32,000\) of materials. The company also applied \($50,000\) of conversion process during the month. Prepare Dutton’s journal entries to record these events.
For Mi Tierra's Driving School, straight-line depreciation on the cars is:a. Variable costb. Fixed costc. Mixed costd. None of the above
Assume Telluride Railway is considering hiring a reservations agency to handle passenger reservations. The agency would charge a flat fee of \(\$ 10,000\) per month, plus \(\$ 1\) per passenger reservation. What is the total reservation cost if 100,000 passengers take the trip next month?a. \(\$
If Telluride Railway's fixed costs total \(\$ 50,000\) per month, the variable cost per passenger is \(\$ 10\), and tickets sell for \(\$ 60\), what is the breakeven point in units?a. 1,000 passengersb. 833 passengersc. 714 passengersd. 100 passengers
Suppose Telluride Railway's total revenues are \(\$ 3\) million, its variable costs are \(\$ 1.8\) million, and its fixed costs are \(\mathrm{S} 0.6\) million. Compute the breakeven point in dollars.a. \(\$ 1.2\) millionb. \(\$ 1.5\) millionc. \(\$ 2.0\) milliond. 52.5 million
If Telluride Railway's fixed costs total \(\$ 50,000\) per month, the variable cost per passenger is \(\$ 36\), and tickets sell for \(\$ 60\), how much revenue must the Railway have to earn \(\$ 100,000\) in operating income per month?a. \(\$ 60,000\)b. \(\$ 150,000\)c. \(\$ 250,000\)d. \(\$
On a CVP graph, the total cost line intersects the vertical (dollars) axis at:a. The level of the fixed costsb. The level of the variable costsc. The breakeven pointd. The origin
If a company increases its selling price per unit for Product \(A\), then the new breakeven point willa. Increaseb. Decreasec. Remain the same
If a company increases its fixed costs for Product \(B\), then the contribution margin per unit willa. Increaseb. Decreasec. Remain the same
Telluride Railway had the following revenue over the past 5 years:To predict revenues for 2008 , Telluride uses the average for the past 5 years. The company's breakeven revenue is \(\$ 800,000\) per year. What is Telluride's margin of safety?a. \(\$ 0\)b. \(\$ 50,000\)c. \(\$ 100,000\)d. \(\$
Telluride Railway sells half of its tickets for the regular price of \(\$ 60\). The other half go to senior citizens and children for the discounted price of \(\$ 40\). Variable cost per passenger is \(\$ 10\) for both groups, and fixed costs total \(\$ 50,000\) per month. What is Telluride's
Lamonda Corp. uses a job order cost system. On April 1, the accounts had the following balance.The following transactions occurred during April.(a) Purchased materials on account, \($233,670.\)(b) Requisitioned materials, \($112,300,\) of which \($16,900\) was for general factory use.(c) Recorded
Tyler Tooling Company uses a job order costing system with overhead applied to products on the basis of machine hours. For the upcoming year, the company estimated its total manufacturing overhead cost at \($250,000\) and total machine hours at 62,500. During the first month of operations, the
Christopher’s Custom Cabinet Company uses a job order costing system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2009 follow:The following transactions occurred during January:(a) Purchased materials on account for \($26,000.\)(b) Issued
The following information was obtained from the records of Appleton Corporation during 2009.• Manufacturing Overhead was applied at a rate of 80 percent of direct labor dollars.• Beginning value of inventory follows:• Beginning Work in Process Inventory, \($10,000.\)• Beginning Finished
Dobson Manufacturing Company uses a job order costing system with manufacturing overhead applied to products on the basis of direct labor dollars. At the beginning of the most recent period, the company estimated its total direct labor cost to be \($50,000\) and its total manufacturing over¬ head
Sampson Company uses a job order cost system with overhead applied to products based on direct labor hours. Based on previous history, the company estimated its total overhead for the coming year (2009) to be \($240,000\) and its total direct labor hours to be 6,000.On January 1, 2010, the general
What is the difference between a sequential process and a parallel processing approach to manufacturing? Give an example of each.
What is the difference between conversion cost and manufacturing overhead? Why would a company use a conversion cost account instead of a manufacturing overhead account?
Indicate whether each of the following statements is true or false. 1. Job order costing accumulates the costs of each process.2. Companies that manufacture cell phones use process costing.3. After the product moves through the final stage of the manufacturing process, its cost moves to finished
LG manufactures cell phones. The conversion costs to produce cell phones for November are added evenly throughout the process in the assembly department. For each of the following separate assumptions, calculate the equivalent units of conversion costs in the ending work in process inventory for
FritoLay makes potato chips. At the end of the month, the ending work in process included 6,000 units in the Mixing Department. All materials are added at the beginning of the mixing process. What are the equivalent units of direct materials cost in ending work in process for the Mixing
The Mixing Department of Healthy Foods had 40,000 units to account for in October. Of the 40,000 units, 30,000 units were completed and transferred to the next department, and 10,000 units were \(30 \%\) complete. All of the materials are added at the beginning of the process. Conversion costs are
Refer to S20-8. The Mixing Department of Healthy Foods has 40,000 equivalent units of materials and 33,000 equivalent units of conversion costs for October. The direct materials costs are \(\$ 30,000\) and the conversion costs are \(\$ 16,500\). Compute the cost per equivalent unit for direct
Refer to S20-8 and S20-9. Healthy Foods' costs per equivalent unit are \(\$ 0.75\) for direct materials and \(\$ 0.50\) for conversion costs. Calculate the cost of (1) the 30,000 units completed and transferred out and (2) the 10,000 units, \(30 \%\) complete, in the ending work in process
The Baking Department at Rainbow Bakery had no loaves in beginning inventory, started 15,000 loaves of bread, and completed 10,000 loaves during January.Requirements 1. What are the total loaves to account for? 2. How many loaves are in ending Baking Department work in process inventory on January
The Baking Department at Rainbow Baker had a beginning work in process inventory of 6,000 cakes, completed 10,000 cakes, and had 5,000 cakes in ending work in process inventory in February:Requirements 1. How many cakes were started in February? 2. What are the total cakes to account for?3. What
Calculate the missing items for each of the following flows of physical units. Dept. Dept. Dept. Units to account for: A 33 Z17 Beginning work in process 100 (3) 50 Started in production during month 250 105 (7) Total physical units to account for 350 170 (6) Units accounted for: Completed and
Pule produces kitchen cabinets in a two-stage process of milling and assembling. Direct materials are added in the Milling Department. Direct labor and overhead are incurred in both departments. The company's general ledger includes the following accounts:Outline the flow of costs through the
Record the following process costing transactions in the general journal: a. Requisition of direct materials by the Milling Department, \(\$ 4,000\).b. Assignment of conversion costs to the Assembling Department:c. Cost of goods completed and transferred out of Milling and into Assembling, \(\$
Paint My. World prepares and packages paint products. Paint My World has two departments: (1) Blending (2) Packaging. Direct materials are added at the beginning of the blending process (dyes) and at the end of the packaging process (cans). Conversion costs are added evenly throughout each
The following information was taken from the ledger of Riley Co. Ending inventory is 60%60% complete as to direct materials but 30%30% complete as to conversion work.Requirements 1. Compute the equivalent units for direct materials and conversion costs.2. Compute the cost per equivalent unit. 3.
The Assembly Department of Audio Manufacturers began June with no work in process inventory. During the month, production that cost \(\$ 41,200\) (direct materials, \(\$ 9,100\), and conversion costs, \(\$ 32,100\) ) was started on 23,000 units. The Assembly Department completed and transferred to
Anderson Winery in Napa Valley, California, has two departments: Fermenting and Packaging. Direct materials are added at the beginning of the fermenting process (grapes) and at the end of the packaging process (bottles). Conversion costs are added evenly throughout each process. Data from the month
Clear Spring Company produces premium bottled water. In the second department, the Bottling Department, conversion costs are incurred evenly throughout the bottling process, but packaging materials are not added until the end of the process. Costs in beginning work in process inventory include
Hall's Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets.
The Great Southern Furniture Company produces dining tables in a three-stage process: cutting, assembly, and staining. Direct materials (lumber) are added at the beginning of the cutting process, and conversion costs are incurred evenly throughout the process. September 2009 activity in the Cutting
Jolly: Giant produces canned Italian green beans. The green beans more through three departments: (1) Mixing, (2) Retort (sterilization), (3) Packing. In the Mixing Department, green beans are added at the beginning of the process, the mixture is partly cooked, then chopped red peppers are
Chrome Accessories manufactures chrome bumpers for classic cars in a two-stage process that includes molding and plating. The direct materials (chrome) are added at the end of the plating process. Conversion costs are incurred evenly throughout the process. Chrome Accessories uses weighted-average
Goldman Company uses three departments to produce handles for kitchen cabinets. Forming the handles requires mixing the raw materials, molding, and drying.Goldman's Drying Department requires no direct materials. Conversion costs are incurred evenly throughout the drying process. Other information
Stone Creek Furniture Factory (SCFF), a custom furniture manufacturer, uses job order costing to track the cost of each customer order. On March 1. SCFF had two jobs in process with the following costs:Source documents revealed the following during March:The company applies overhead to products at
Refer to the information in E2-1 for Stone Creek Furniture Factory.Required:Prepare journal entries to record the materials requisitions, labor costs, and applied overhead.Data from E2-1Stone Creek Furniture Factory (SCFF), a custom furniture manufacturer, uses job order costing to track the cost
A weekly time ticket for Jim Bolton follows:Required:1. Determine how much of the $1,000 that Jim earned during this week would be charged to Job 271, Job 272, and Job 273.2. Explain how the time spent doing maintenance work would be treated. Direct Labor Time Ticket Ticket Number: Dates: Monday
Refer to the information presented in E2-3 for Jim Bolton.Required:Prepare a journal entry to record Jim’s wages or assuming they have not yet been paid.Data from E2-3A weekly time ticket for Jim Bolton follows: Direct Labor Time Ticket Ticket Number: Dates: Monday 8/12-Friday 8/16, 2010 TT338
Spokesman Bike Company manufactures custom racing bicycles. The company uses a job order cost system to determine the cost of each hike. Estimated costs and expenses for the coming year follow:Required:1. Determine the predetermined overhead rate per direct labor hour if the average direct labor
Mulligan Manufacturing Company uses a job order cost system with overhead applied to products at a rate of 200 percent of direct labor cost. Selected manufacturing data follow:Required:Treating each case independently, find the missing amounts for letters a-1. You should do them in the order
Cayman Custom Manufacturing Company applies manufacturing overhead on the basis of machine hours. At the beginning of the year, the company estimated its total overhead cost to be \($300,000\) and machine hours to be 15,000. Actual manufacturing overhead and machine hours were \($340,000\) and
Refer to the information presented in E2-7 for Cayman Company.Required:1. Prepare the journal entries to record actual and applied manufacturing overhead.2. Prepare the journal entry to transfer the overhead balance to Cost of Goods Sold.Data from E2-7Cayman Custom Manufacturing Company applies
Refer to the information presented in E2-9 for Delamunte Industries.Required:Prepare the journal entries to record the cost of jobs completed.Data from E2-9Following is partial information for Delamunte Industries for the month of August:Jobs finished during August are summarized here: Balance,
Aquazona Pool Company is a custom pool builder. It recently completed a pool for the Drayna family (Job 1324) as summarized on the following incomplete job cost sheet.The company applies overhead to jobs at a rate of $10 per direct labor hour.Required:1. Calculate how much overhead would be applied
The flow of costs through a company’s cost accounting system is summarized in the following T-accounts:Required:Describe the transactions represented by letters (a)-(i). When more than one debit appears in a single transaction, explain why the costs are recorded in multiple accounts. Raw
Roy’s Appliance Repair Shop uses a job order costing system to track the cost of each repair. Roy’s applies its “garage or shop” overhead at a rate of \($25\) per direct labor hour spent on each repair. Roy’s uses the following accounts to track the cost of all repairs:The following
Which of these companies would use process costing?a. Saatchi \& Saatchi advertising firmb. Accenture management consultantsc. Pace Foods, producer of Pace picante sauced. Amazon.com
Which of the following statements describes Puzzle Me's process costing system? (p. 1000 )a. Direct materials and direct labor are traced to each specific order.b. Costs flow through a sequence of Work in Process Inventory accounts and then into Finished Goods Inventory from the final Work in
Compute the equivalent units of sugar used.a. 8,000b. 8,700c. 9,200d. 10,000 Suppose Chupa Chups, a candy manufacturer, uses a mixing process that adds sugar at the beginning and flavorings \(75 \%\) of the way through the mixing process. Conversion costs are incurred evenly throughout the mixing
How many equivalent units of flavorings did Chupa Chups use?a. 8,000b. 8,700c. 9,200d. 10,000 Suppose Chupa Chups, a candy manufacturer, uses a mixing process that adds sugar at the beginning and flavorings \(75 \%\) of the way through the mixing process. Conversion costs are incurred evenly
What are the equivalent units of conversion costs?a. 8,000b. 8,700c. 9,200d. 10,000 Suppose Chupa Chups, a candy manufacturer, uses a mixing process that adds sugar at the beginning and flavorings \(75 \%\) of the way through the mixing process. Conversion costs are incurred evenly throughout the
If the cost per equivalent unit is \(\$ 0.50\) for sugar, \(\$ 1.00\) for flavorings, and \(\$ 0.40\) for conversion costs, what is the cost assigned to the Mixing Department's ending work in process inventory?a. \(\$ 1,480\)b. \(\$ 1,800\)c. \(\$ 2,520\)d. \(\$ 3,800\)Suppose Chupa Chups, a candy
Suppose Chupa Chup's second process, Shaping, starts out with 3,000 lollipops in its beginning work in process inventory. During the month 8,000 units came to Shaping from .Mixing. At the end of the period Shaping has 1,500 lollipops \(70 \%\) through the process. Compute the number of equivalent
The cost of the Shaping Department's beginning work in process inventory included S20 of transferred-in cost. Transferred-in costs of Shaping added \$200. Use the equivalent units for transferred-in costs that you computed for question 7 to determine Shaping's cost per equivalent unit for
A production cost report showsa. Costs to account forb. Cost of units completedc. Cost of ending work in process inventoryd. All the above
Willard Company applies manufacturing overhead costs to products as a percentage of direct labor dollars. Estimated and actual values of manufacturing overhead and direct labor costs are summarized here:1. Compute the predetermined overhead rate.2. Interpret this rate and explain how it will be
Refer to M2-3 for Willard Company.1. Determine how much overhead to apply to production.2. Explain whether applied overhead was based on actual values, estimated values, or both.Data from M2-3Willard Company applies manufacturing overhead costs to products as a percentage of direct labor dollars.
Refer to M2-3 for Willard Company.1. Compute over- or underapplied overhead.2. Explain how you would handle the oven or underapplied overhead at the end of the accounting period. Which accounts will be affected? Will the accounts be increased or decreased?Data from M2-3Willard Company applies
Kelly Company’s raw materials inventory transactions for the most recent month are summarized here.1. How much of the raw materials cost would he added to the Work in Process Inventory account during the period?2. How much of the raw materials costs would be added to the Manufacturing Overhead
Kelly Company’s payroll costs for the most recent month are summarized here:1. Calculate how much of the labor costs would be added to the following accounts: Work in Process Inventory Manufacturing Overhead Selling and Administrative Expenses 2. Explain why some labor costs are recorded as work
Refer to M2-9.1. Prepare the journal entry to record Kelly Company’s payroll costs.2. The company applies manufacturing overhead to products at a predetermined rate of \($50\) per direct labor hour. Prepare the journal entry to apply manufacturing overhead to production.Data from M2-9.Kelly
Refer to M2-10 for Kelly Company. Its actual manufacturing costs for the most recent period are summarized here:1. Post the preceding information to Kelly Company’s Manufacturing Overhead T-account.2. Compute over- or underapplied manufacturing overhead.Data from M2-10Refer to M2-9.1. Prepare the
Refer to M2-11 for Kelly Company.1. Prepare the journal entry to close the Manufacturing Overhead account balance to Cost of Goods Sold.2. Explain whether the entry in requirement 1 will increase or decrease Cost of Goods Sold and why.Data from M2-11Refer to M2-10 for Kelly Company. Its actual
The following information is available for Carefree Industries:Compute total current manufacturing costs. Beginning work in process inventory Ending work in process inventory Cost of goods manufactured $ 75,000 90,000 300,000
The following information is available for Carefree Industries.Compute the cost of goods sold. Cost of goods manufactured Beginning finished goods inventory Ending finished goods inventory $300,000 140,000 120,000
The following information is available for Carefree Industries.Manufacturing overhead is applied to production at 150 percent of direct labor cost. Determine the amount of direct materials used in production. Direct labor $100,000 Total current manufacturing costs 370,000
A manufacturer of plywood A manufacturer of wakeboards A manufacturer of luxury yachts A professional services firm A landscape contractor For a manufacturer that uses job order costing, show the order of the cost flow through the following accounts, starting with the purchase of materials in the
Seattle Crystal reports the following labor-related transactions at its plant m Seattle, Washington.Record the journal entries for the incurrence and assignment of these wages. Plant janitor's wages 600 Furnace operator's wages....... 900 Glass blowers' wages. 75,000
Teak Outdoor Furniture manufactures wood patio furniture. The company reports the following costs for June 2008. What is the balance in the Manufacturing Overhead account? Wood.............. $230,000 Nails, glue, and stain. 21,000 Depreciation on saws.. 5,000 Indirect manufacturing labor.. 40,000
Job 303 includes direct materials cost of \($500\) and direct labor costs of \($400.\) If the manufacturing overhead allocation rate is 70% of direct labor cost, what is the total cost assigned to Job 303?
Boston Enterprises produces LCD touch screen products. The company reports the following information at December 31, 2008. Boston began operations on January 30, 2008.1. What is the cost of direct materials used? The cost of indirect materials used?2. What is the cost of direct labor? The cost of
The T-account showing the manufacturing overhead activity for Brian Corp. for 2007 is as follows:1. What is the actual manufacturing overhead? Allocated manufacturing overhead? 2. What is the predetermined manufacturing overhead rate as a percentage of direct labor cost, if actual direct labor
Refer to S19-10. Make the journal entry to close out Brian Corp.'s Manufacturing Overhead account.Exercise S19-10Sautter Advertising pays Thomas Tibbs $110,000 per year. Tibbs works 2,000 hours per year.1. What is the hourly cost to Sautter Advertising of employing Tibbs? 2. What direct labor cost
Sautter Advertising pays Thomas Tibbs $110,000 per year. Tibbs works 2,000 hours per year.1. What is the hourly cost to Sautter Advertising of employing Tibbs? 2. What direct labor cost would be traced to client 507 if Tibbs works 14 hours to prepare client 507's magazine ad?
Refer to S19-12. Assume that Sautter's advertising agents are expected to work a total of 12,000 direct labor hours in 2009. Sautter's estimated total indirect costs are $240,000.1. What is Sautter's indirect cost allocation rate?2. What indirect costs will be allocated to client 507 if Tibbs works
Complete the following statements with the term job order costing or process costing,a. ___________ is used by companies that produce small quantities of manya. different products.b. Georgia-Pacific pulverizes wood into pulp to manufacture cardboard.The company uses a ___________ system.c. To
Thrifty Trailers' job cost records yielded the following information:Requirements Using the dates above to identify the status of each job, compute Thrifty's cost of(a) Work in Process Inventory at March 31,(b) Finished Goods Inventory at March 31, (c) Cost of Goods Sold for March. Job Date No.
Record the following transactions in Sloan's Seats' general journal,a. Incurred and paid Web site expenses, \($3,500\) .b. Incurred and paid manufacturing wages, \($15,000\) .c. Purchased materials on account, \($14,000\) .d. Used in production: direct materials, \($6,000;\) indirect materials,
Describe the lettered transactions in the following manufacturing accounts: Finished Goods Inventory (a) Materials Inventory (b) Work in Process Inventory (b) (8) (g) (d) (f) Manufacturing Wages (c) (d) Manufacturing Overhead (b) (d) (e) (f) (i) (h) Cost of Goods Sold (h) (i)
September production generated the following activity in Rohr Chassis Company's Work in Process Inventory account:Completed production, not yet recorded, consists of Jobs 142 and 143, with total costs of $40,000 and $38,000, respectively.Requirements 1. Compute the cost of work in process at
Selected cost data for Classic Poster Co. are as follows:Requirements 1. Compute the predetermined manufacturing overhead rate per direct labor dollar,2. Prepare the journal entry to allocate overhead cost for the year. 3. Use a T-account to determine the amount of underallocated or overallocated
Alba Foundry uses a predetermined manufacturing overhead rate to allocate overhead to individual jobs, based on the machine hours required.At the beginning of 2009, the company expected to incur the following:At the end of 2009, the company had actually incurred:Requirements 1. Compute AJba's
The manufacturing records for Kool Kayaks at the end of the 2008 fiscal year show the following information about manufacturing overhead:Requirements 1. How many machine hours did Kool Kayaks use in 2008? 2. Was manufacturing overhead over- or underallocated for the year? By how much?3. Record the
Hartley Manufacturing makes carrying cases for portable electronic devices. Its job order costing records yield the following information:Requirements 1. Using the dates above to identify the status of each job, compute Hartley's account balances at November 30 for Work in Process Inventory,
Steinborn Construction, Inc., is a home builder in New Mexico.Steinborn uses a job order costing system in which each house is a job. Because it constructs houses, the company uses accounts titled Construction Wages and Construction Overhead. The following events occurred during August:a. Purchased
Bluebird Design, Inc., is a Web site design and consulting firm. The firm uses a job order costing system, in which each client is a different job.Bluebird Design traces direct labor, licensing costs, and travel costs directly to each job. It allocates indirect costs to jobs based on a
EnginePro, Inc., reconditions engines. Its job order costing records yield the following information. EnginePro uses a perpetual inventory system.Requirements 1. Using the dates above to identify the status of each job, compute EnginePro's account balances at March 31 for Work in Process
Vacation Homes manufactures prefabricated chalets in Utah. The company uses a job order costing system in which each chalet is a job. The following events occurred during May.a. Purchased materials on account, $405,000.b. Incurred manufacturing wages of $l 12,000. Requisitioned direct materials and
Alamo Co. manufactures tires for all-terrain vehicles. Alamo uses job order costing and has a perpetual inventory system.On June 22, 2008, Alamo received an order for 100 TX tires from ATV Corporation at a price of \($55\) each. The job, assigned number 300, was promised for July 10. After
Regal Company produces hospital uniforms. The company allocates manufacturing overhead based on the machine hours each job uses.Regal reports the following cost data for 2009:Requirements 1. Compute the predetermined manufacturing overhead rate.2. Post actual and allocated manufacturing overhead
Simms Advertising is an Internet advertising agency. The firm uses a job order costing system in which each client is a different job. Simms Advertising traces direct labor, software licensing costs, and travel costs directly to each job. The company allocates indirect costs to jobs based on a

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