Management Accounting

Assignment I

$1.$ B Corporation uses a job$-$order costing system with a single plantwide predetermined overhead rate based on machine$-$hours. The company based its predetermined overhead rate for the current year on the following data:

Total machine$-$hours $40,000$

Total fixed manufacturing overhead cost $$156,000$

Variable manufacturing overhead per machine$-$hour $$2\mathrm{.}20$

Recently Job M$242$ was completed with the following characteristics:

Number of units in the job $200$

Total machine$-$hours $60$

Direct materials $$725$

Direct labor cost $$1,680$

Required:

A$.$ Calculate the total job cost for Job M$242.$

B$.$ Calculate the unit product cost for Job M$242.$

$2.$ Anders Inc. uses the weighted$-$average 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 $800$

Percent complete with respect to materials $70\%$ Percent complete with respect to conversion $10\%$ Costs in the beginning inventory:

Materials cost $ $1,736$

Conversion cost $ $2,288$

Units started into production during the month $18,000$

Units completed and transferred out $18,400$

Costs added to production during the month:

Materials cost $ $59,908$

Conversion cost $ $520,696$

Work in process, ending:

Units in process $400$

Percent complete with respect to materials $60\%$ Percent complete with respect to conversion $30\%$

$1$

Required:

A$.$ Determine the equivalent units of production.

B$.$ Determine the costs per equivalent unit.

C$.$ Determine the cost of ending work in process inventory.

D$.$ Determine the cost of the units transferred to the next department.

$3.$ NH Company manufactures and sells two products: Product C and Product M$.$ Data concerning the expected production of each product and the expected total direct labor$-$hours $($DLHs$)$ required to produce that output appear below:

Direct Labor

Expected Production

Hours Per Unit

Total Direct Labor$-$Hours

Product C $6005\mathrm{.}03,000$ Product M $8007\mathrm{.}05,600$ Total direct labor$-$hours $8,600$

The direct labor rate is $$22$ per DLH$.$ The direct materials cost per unit is $$124$ for Product C and $$144$ for Product M$.$

The company has an activity$-$based costing system with the following activity cost pools, activity measures, and expected activity:

Activity Cost Pools

Activity Measures

Estimated Overhead

Cost Expected Activity

Product C

Product

M Total

Labor$-$related DLHs $ $304,9563,0005,6008,600$ Machine setups Setups $46,011400300700$ Order size MHs $549,9274,4004,3008,700$ $ $900,894$

Required:

In all computations involving dollars in the following requirements, round off your answer to the nearest whole cent.

A$.$ Compute the activity rates under the activity$-$based costing system.

B$.$ Determine how much overhead would be assigned to each product under the activity$-$based costing system.

C$.$ Determine the unit product cost of each product under the activity$-$based costing method.