PROBLEM 1. Using the data presented below, determine the figures that should be inserted in the blank spaces. points Show your calculations for the full credits. If you fill in just the blanks, you get only 1/3 points. (20 Beginning Units Equivalent units in Units started transferred to units of process 700 nished goods 3, 200 Ending units in process 2, 300 600 - 1/3 completed production 400 1 , 200 0 - 1/2 completed 2, 450 4, 500 5 , 100 5, 500 1, 000 2, 200 8, 200 1/2 completed 8, 800 2, 400 500 4/5 completed a. b. C. d. e .2. The Outdoor Manufacturing Company produces sporting equipment. The company maintains a single raw materials inventory account for both direct and indirect materials. The following information came from the factory ledger accounts for December: (10 points) Raw Materials, December 1 $ 45, 500 Work in Process, December 1 125, 000 Finished Goods, December 1 175, 000 Raw materials purchases (during December) 623, 000 Direct labor 435, 000 Repairs and maintenance 37 , 200 Indirect materials 16, 700 Utilities 63, 200 Indirect labor 38, 200 Supervisors' salaries 18, 300 Raw Materials, December 31 43, 600 Work in Process, December 31 135, 000 Finished Goods, December 31 150, 000 Compute the cost of direct materials used during the month of December.3. The controller has asked you to examine different distribution methods for applying factory overhead to the various production orders that are processed during a year. The following information was taken from the annual budget: Direct labor hours 84, 000 Machine hours 120, 000 Manufacturing costs: Direct labor $525, 000 Direct materials 180, 000 Indirect labor 75, 000 Electric power 48, 000 Payroll taxes 12, 600 Machine maintenance and repair 9 , 200 Factory supplies 16, 000 Factory heat and light 14, 000 Depreciation, taxes, and insurance: Factory buildings 135, 000 Machinery 320, 200 $1, 335, 000 Actual results for the year follow: Direct labor hours 85, 000 Machine hours 110, 000 Manufacturing costs: Direct labor $ 540 , 000 Direct material 200, 000 Factory overhead 625, 000 $1, 365, 000 a. Determine the following factory overhead application rates under each of the following methods. Show your calculations. (30 points) (1) Direct labor cost Direct labor hours (3 ) Machine hours b. Determine the under- or overapplied factory overhead under each of the following methods: (10 points) (1) Direct labor cost (2) Direct labor hours (3 ) Machine hours W4. Kater Company manufactures shelving units. The company receives pre-cut wood, drills holes in the wood so that movable shelves may be installed, then assembles and paint the units. Classify each of the following items of factory overhead as either xed or variable cost. (10 points) Janitorial service (an outside service, not company employees): (Fixed, Variable) Supervisor of the Drilling Department: (Fixed, Variable) Oil used to lubricate drill press machines: (Fixed, Variable) Propane for forklift trucks used to move the material from the Drilling Department to the Assembly Department: (Fixed, Variable) Natural gas used to heat the plant: (Fixed, Variable) Security guard: (Fixed, Variable) Drill bits used in the drilling department: (Fixed, Variable) Insurance on factory building: (Fixed, Variable) Electricity to power drill press machines: (Fixed, Variable) Rent of factory building: (Fixed, Variable) PF'P'?' cur-worm 5. (20 Points) Tacy Company's Schedule of Earnings and Payroll taxes for the period ended March 28 - 31 to be paid April 5 follow: Total Gross payroll Wages FICA SUTA FUTA taxes Non-factory: Sales $ 7, 500 600 $ 240 $ 60 $ 900 Administrative 4, 000 320 112 28 460 11 , 500 920 352 88 1, 360 Factory: Direct labor 52, 000 4, 160 2, 080 520 6, 760 Overtime premium 4, 500 360 180 45 585 Indirect labor 10, 000 800 400 100 1, 300 66, 500 5 , 320 2, 660 665 8, 645 $78, 000 $6, 240 $3, 012 $753 $10, 005 Prepare the journal entries to: (a) Record the payroll. (b) Distribute the payroll. (c) Record employer's payroll taxes. 5
