1.

Ganges Incorporated uses a job-order costing system and a predetermined overhead rate based on machine hours as the production process is heavily relied on sophisticated machinery.

At the beginning of the year, the company estimated manufacturing overhead for the year would be $852,000 and machine hours would be 60,000 hours. The following information pertains to October of the current year:

	Job A10	Job A11	Job A12
Work in Process, Oct. 1	$12,000	$16,000	$21,000
October production activity:
Direct Materials used	$10,800	$7,200	$8,300
Direct labour used	$3,200	$4,800	$5,700
Machine hours	1,390	1,620	1,750
Direct Labour hours	250	170	180

Required (round answers to 2 decimal points):

1. Calculate the predetermined overhead rate (POHR).
2. Complete a brief job-order cost sheets for the 3 jobs for the month of October. (Hint: this requires applying overhead using the rate calculated in part 1 above).
3. At the end of the October Jobs A10 and Job A11 were completed, and Job A11 was sold and delivered to a customer - show the ending balances of the Work in Process and Finished Goods inventory accounts (assume no beginning Finished Goods inventory).
4. If actual manufacturing overhead costs are $65,000, what is the amount of overhead variance? Is it Over or Under applied overhead for October?

2.

National Ski Equipment, a manufacturing firm, has supplied the following information from its accounting records for the month of October 2021:

Finished goods inventory Oct. 1 $12,250

Work in process inventory Oct. 1 14,200

Raw materials inventory Oct. 1 13,500

Finished goods inventory Oct. 30 13,750

Work in process inventory Oct. 30 12,750

Raw materials inventory Oct. 30 15,100

Factory supplies used 10,000

Depreciation of factory equipment 17,000

Depreciation of office building 23,000

Salary of factory manager 36,000

Factory janitorial cost 8,000

Marketing and promotion costs 14,500

Other materials used 11,250

Direct labor cost (5,000 hours used) 32,000

Purchase of raw materials 60,000

. Required: A. Prepare a statement of cost of goods manufactured. B. Prepare a statement of cost of goods sold.

3.

National Plastics Company manufactures two Toys. Information about the two toys is as follows:

	Product Gamma	Product Theta
Selling price per unit	$40	$60
Variable manufacturing costs per unit	16	22
Variable selling costs per unit	8	12

The company expects annual fixed manufacturing costs to be $156,800 and fixed selling costs to be $71,200. The firms normal annual total sales are 24,000 units of those 16,800 have been Product Gamma and the remainder are Product Theta.

Required (round to 2 decimal places):

1. Determine the break-even point in units for the companys Products (i.e., show number of units for each product: Gamma and Theta).

2. Determine the level of sales (in dollars) necessary to generate operating income of $63,165.

4.

Mercury Inc. produces budget mobile phones at a factory in Mumbai, India. Output is measured in number of units. Materials are added at the beginning of the process in all departments. Mercury uses the weighted average method. During October, the company had the following production data in the processing department:

Work-in-Process Inventory, October 1 9,000 Units (40 percent complete) Direct materials: $48,000 Conversion Cost: $56,000 During October, 130,000 units were completed and transferred to packaging department. The following costs were incurred by the processing department during October: Direct materials: $280,000 Conversion Cost: 451,000

On October 31, 15,000 units that were 60 percent complete remained in the processing department. Required: A. Determine equivalent units of production for October for the processing department for Materials and Conversion cost. B. Determine Octobers total costs to account for in the processing department. C. Determine total cost per equivalent unit of production in the processing department for Materials and Conversion Cost. D. Determine the cost of goods transferred to the packaging department. E. Determine the cost of Octobers ending Work-in-Process Inventory for the processing department.

5.

Ontario Iron Fabricators makes metal pipes for building. The companys accountant likes to estimate overhead costs for the year 2022. To help him understand how costs behave in the companys manufacturing process he wants to separate fixed from variable costs. Data for the past six months are as follows:

Month	Overhead Cost	Machine Hours
January	$115,220	485
February	104,880	420
March	107,320	426
April	120,570	520
May	124,380	640
June	117,908	562

Required (round to 2 decimal places):

1. Using the high low method, calculate the fixed cost component of overhead and the variable rate per machine hour.
2. What would be the cost formula that can be used to calculate total overhead cost?
3. Assume that 700 hours of machine hours are likely to be used in the month, what would be the total overhead cost based on the above calculations.