Question
4. As of the end of June, Business Solutions job cost sheets show the following total costs accumulated on three furniture jobs. Job 602 Job
4. As of the end of June, Business Solutions job cost sheets show the following total costs accumulated on three furniture jobs.
| Job 602 | Job 603 | Job 604 |
Direct materials | $1,500 | $3,300 | $2,700 |
Direct labor | 800 | 1,420 | 2,100 |
Overhead | 400 | 720 | 1,050 |
- Job 602 was started in production in May, and these costs were assigned to it in May: $600 for direct materials, $180 for direct labor, $90 of overhead.
- Jobs 603 and 604 were started in June.
- Jobs 602 and 603are finished in June, and job 604 is expected to be finished in July.
- Overhead cost is applied with a predetermined rate based on direct labor costs.
- No raw materials are used indirectly in June.
a) What is the cost of raw materials used in June for each of the three jobs and in total?
b) How much total direct labor cost is incurred in June?
c) What predetermined overhead rate is used in June?
d) How much cost is transferred to Finished Goods Inventory in June?
5. Explain the following trends in process operations:
a) Process design. (Minimum 40 words)
b) Just-in-Time Production. (Minimum 40 words)
c) Customer orientation. (Minimum 40 words)
d) Yield. (Minimum 40 words)
6. The computer workstation furniture manufacturing that Santana Rey started for Business Solutions is progressing well. Santana uses a job order costing system to account for the product costs of this product line. Santana is wondering whether the process costing might be a better method for her to keep track of and monitor her production costs.
a) What are the features that distinguish job order costing from process costing? (Minimum 75 words)
b) Should Santana continue to use job order costing or switch to process costing for her workstation furniture manufacturing? Explain. (Minimum 40 words)
7. Both Apple and Google sell electronic devices, and each of these companies has a different product mix. Assume the following data are available for both companies.
| Apple | |
Average selling price per unit sold | $550 per unit | $470 per unit |
Average variable cost per unit sold | $250 per unit | $270 per unit |
Total fixed costs ($ millions) | $36,000 | $10,000 |
a) Compute each companys break-even point in unit sales.
b) If unit sales were to decline, which company would experience the larger decline in operation profit. Explain your answer. (Minimum 45 words)
8. Both Samsung and Apple sell smartphones. Assume the following data are available for a popular smartphone model of each company.
| Samsung | Apple |
Selling price per unit | $720 | $650 |
Variable cost per unit | $288 | $221 |
a) Compute the contribution margin ratio for each model.
b) Based on the contribution margin ratio, which companys smartphone sales contribute more to covering fixed costs? Explain your answer. (Minimum 45 words)
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