Managerial Accounting:Assignment

Question No:1)

Boston Company has the following balances as of the year ended December 31, 2015.

Direct Materials Inventory$15,000 Dr.

WIP Inventory34,500 Dr.

Finished Goods Inventory49,500 Dr.

Cost of Goods Sold74,500 Dr.

Additional information is as follows:

Cost of direct materials purchased during 2015$41,000

Cost of direct materials requisitioned in 201547,000

Cost of goods completed during 2015102,000

Factory overhead applied (120% of direct labour)48,000

Underapplied factory overhead4,000

Required to solve the below:

a.Compute beginning direct materials inventory.

b.Compute beginning WIP inventory.

c.Compute beginning finished goods inventory.

d.Compute actual factory overhead incurred.

Question No 2)

GBC Printing has contracts to complete weekly supplements required by forty-six customers. For the year 2016, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 10 million pages.

For 2016 GBC Printing decided to evaluate the use of additional cost pools. After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inspections are the primary manufacturing overhead cost drivers. The following information was gathered during the analysis:

Cost pool Manufacturing overhead costs Activity level

Design changes $60,000 200 design changes

Setups 320,000 4,000 setups

Inspections 40000 16,000 inspections

Total manufacturing overhead costs $420,000

During 2016, two customers, Rock & Roll and Kingston Inc, are expected to use the following printing services:

Activity Rock & RollInc. KingstonInc

Pages 60,000 76,000

Design changes 10 2

Setups 20 10

Inspections 30 38

Requirements to solve:

A) If manufacturing overhead costs are considered one large cost pool and are assigned based on 10 million pages of production capacity, what is the cost driver rate?

B) Using pages printed as the only overhead cost driver, what is the manufacturing overhead cost estimate for Kingston Inc. during 2016?

C) Assuming activity-cost pools are used, what are the activity-cost driver rates for design changes, setups, and inspections cost pools?

D) Using activity-based costing to allocate overhead costs, what is the total manufacturing overhead cost estimate for Kingston Inc. during 2016?