Question
1. The Lakeside Company uses a weighted-average process costing system. The following data are available: Beginning inventory -0- Units started in production 21,000 Units finished
1. The Lakeside Company uses a weighted-average process costing system. The following data are available:
Beginning inventory | -0- | ||
Units started in production | 21,000 | ||
Units finished during the period | 16,500 | ||
Units in process at the end of the period (complete as to materials, complete as to labor and overhead) | 4,500 | ||
Cost of materials used | $ | 41,000 | |
Labor and overhead costs | $ | 43,710 | |
Unit cost of material is:
a$2.48.
b$2.30.
c$2.08.
d.$1.95.
2. Chang Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, Plain and Fancy, about which it has provided the following data:
Plain | Fancy | ||||||
Direct materials per unit | $ | 24.90 | $ | 59.70 | |||
Direct labor per unit | $ | 5.40 | $ | 27.00 | |||
Direct labor-hours per unit | 0.20 | 1.00 | |||||
Annual production | 55,000 | 35,000 | |||||
The company's estimated total manufacturing overhead for the year is $1,255,800 and the company's estimated total direct labor-hours for the year is 46,000.
The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:
Activities and Activity Measures | Estimated Overhead Cost | |||
Supporting direct labor (DLHs) | $ | 598,000 | ||
Setting up machines (setups) | 271,400 | |||
Parts administration (part types) | 386,400 | |||
Total | $ | 1,255,800 | ||
|
Expected Activity | |||||
Plain | Fancy | Total | |||
DLHs | 11,000 | 35,000 | 46,000 | ||
Setups | 1,734 | 980 | 2,714 | ||
Part types | 640 | 280 | 920 | ||
The manufacturing overhead that would be applied to a unit of Plain under the company's traditional costing system is closest to:
a$5.46.
b.$2.60.
c.$13.47.
d.$18.93.
3. Upton Company produces two main products and a by-product out of a joint process. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. Upton has employed the physical-volume method to allocate joint production costs to the two main products. The net realizable value of the by-product is used to reduce the joint production costs before the joint costs are allocated to the main products. Data regarding Upton's operations for the current month are presented in the chart below. During the month, Upton incurred joint production costs of $4,213,200. The main products are not marketable at the split-off point and, thus, have to be processed further.
First Main Product | Second Main Product | By-Product | |||||||
Monthly output in pounds | 114,000 | 180,000 | 78,000 | ||||||
Selling Price per pound | $ | 40 | $ | 14 | $ | 2 | |||
Separable process costs | $ | 684,000 | $ | 792,000 | |||||
The amount of joint production cost that Upton would allocate to the Second Main Product by using the physical quantities method to allocate joint production costs would be:
a.$2,184,000.
b.$2,244,000.
c. $2,484,000.
d. $2,579,510.
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