Question 1:

Which would be more appropriate in each of the following situations ? job-order costing or process costing?

Situation	Job Order or Process Costing
1) A golf course designer
2) A textbook publisher
3) A business consultant
4) An oil refinery
5) A soft-drink bottler
6) A film studio
7) A firm that supervises bridge construction projects
8) A manufacturer of fine custom jewelry
9) A paint factory
10) A factory making frozen orange juice concentrate

Question 2:

R2D2 Test Systems manufactures automated testing equipment. The company uses a job-order costing system and applies overhead on the basis of machine hours (MH). At the beginning of the year, estimated manufacturing overhead was $1,960,000, and the estimated machine hours were 98,000. Data regarding several jobs at R2D2 are presented below.

Job Number	Beginning Balance	Direct Materials	Direct Labour	Machine Hours
XJ-107	$118,600	$4,000	$8,400	150
ST-211	121,450	2,500	12,160	300
XD-108	21,800	86,400	36,650	3,100
SL-205	34,350	71,800	32,175	2,700
RX-115	0	18,990	21,845	1,400

By the end of the first month (January), all jobs but RX-115 were completed, and all completed jobs had been delivered to customers except for SL-205. Required:

1) What was the balance in Finished Goods inventory at the end of January?

Question 3:

Takada Technology, Inc., has a job-order costing system. The company uses predetermined overhead rates in applying manufacturing overhead cost to individual jobs. The predetermined overhead rate in Department A is based on machine hours, and the rate in Department B is based on direct materials cost. At the beginning of the most recent year, the company's management made the following estimates for the year:

	Department A	Department B
Machine-hours	70,000	19,000
Direct labour-hours	30,000	60,000
Direct materials cost	$195,000	$282,000
Direct labour cost	$260,000	$520,000
Manufacturing overhead cost	$420,000	$705,000

Job 243 entered into production on April 1 and was completed on May 12. The company's cost records show the following information about the job:

	Department A	Department B
Machine-hours	250	60
Direct labour-hours	70	120
Direct materials cost	$840	$1,100
Direct labour cost	$610	$880

At the end of the year, the records of Takada showed the following actual cost and operating data for all jobs worked on during the year:

	Department A	Department B
Machine-hours	61,000	20,000
Direct labour-hours	28,000	66,000
Direct materials cost	$156,000	$284,000
Manufacturing overhead cost	$385,000	$705,000

Required:

Compute the predetermined overhead rates for Department A and Department B.

Compute the total overhead cost applied to Job 243.

Compute the amount of underapplied or overapplied overhead in each department at the end of the current year.

Question 4:

Small Lake Fisheries, Inc. processes miscellaneous fish for various distributors. Two departments involved ? Cleaning and Packing. Data relating to kilograms of fish processed in the Cleaning department during May are given below:

	Kilograms of Fish	Percentage Completed
WIP, May 1	15,000	55%
WIP, May 31	10,000	90%

A total of 240,000 kilograms of fish were started into processing during May. All materials are added at the beginning of processing in the Cleaning Department.

Required:

Compute the equivalent units for May for the Cleaning Department, assuming that the company uses the weighted-average method of accounting for units.

Question 5:

Grand Bend Company produces a high-quality insulation material that passes through two production processes. Data for November for the first process follow:

	Units	Completion with Respect to Materials	Completion with Respect to Conversion
WIP, November 1	80,000	50%	25%
WIP, November 30	60,000	45%	20%

	Totals
Materials cost in WIP inventory, June 1	$76,600
Conversion cost in WIP inventory, June 1	34,900
Units started into production	300,000
Units transferred to the next process	320,000
Materials costs added during June	410,000
Conversion cost added during June	234,500

Required:

Assume that the company uses the weighted-average method of accounting for units and costs. Determine the equivalent unit for November for the first process.

Compute the costs per equivalent unit for November for the first process.

Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process in November.

Question 1: Which would be more appropriate in each of the following situations - joborder costing or process costing? Situation Job Order or Process Costing 1) A golf course designer 2) A textbook publisher 3) A business consultant 4) An oil refinery 5) A softdrink bottler 6) A film studio 7) A firm that supervises bridge construction projects 8) A manufacturer of fine custom jewelry 9) A paint factory 10) A factory making frozen orange juice concentrate Question 2: R2D2 Test Systems manufactures automated testing equipment. The company uses a joborder costing system and applies overhead on the basis of machine hours (MH). At the beginning of the year, estimated manufacturing overhead was $1,960,000, and the estimated machine hours were 98,000. Data regarding several jobs at R2D2 are presented below. Job Number Beginning Balance Direct Materials Direct Labour Machine Hours XJ107 $118,600 $4,000 $8,400 150 ST211 121,450 2,500 12,160 300 XD108 21,800 86,400 36,650 3,100 SL205 34,350 71,800 32,175 2,700 RX115 0 18,990 21,845 1,400 By the end of the first month (January), all jobs but RX115 were completed, and all completed jobs had been delivered to customers except for SL205. Required: 1) What was the balance in Finished Goods inventory at the end of January? Question 3: Takada Technology, Inc., has a joborder costing system. The company uses predetermined overhead rates in applying manufacturing overhead cost to individual jobs. The predetermined overhead rate in Department A is based on machine hours, and the rate in Department B is based on direct materials cost. At the beginning of the most recent year, the company's management made the following estimates for the year: Department A Department B Machinehours 70,000 19,000 Direct labourhours 30,000 60,000 Direct materials cost $195,000 $282,000 Direct labour cost $260,000 $520,000 Manufacturing overhead cost $420,000 $705,000 Job 243 entered into production on April 1 and was completed on May 12. The company's cost records show the following information about the job: Department A Department B 250 60 70 120 Direct materials cost $840 $1,100 Direct labour cost $610 $880 Machinehours Direct labourhours At the end of the year, the records of Takada showed the following actual cost and operating data for all jobs worked on during the year: Department A Department B Machinehours 61,000 20,000 Direct labourhours 28,000 66,000 Direct materials cost $156,000 $284,000 Manufacturing overhead cost $385,000 $705,000 Required: 1. Compute the predetermined overhead rates for Department A and Department B. 2. Compute the total overhead cost applied to Job 243. 3. Compute the amount of underapplied or overapplied overhead in each department at the end of the current year. Question 4: Small Lake Fisheries, Inc. processes miscellaneous fish for various distributors. Two departments involved - Cleaning and Packing. Data relating to kilograms of fish processed in the Cleaning department during May are given below: Kilograms of Fish Percentage Completed WIP, May 1 15,000 55% WIP, May 31 10,000 90% A total of 240,000 kilograms of fish were started into processing during May. All materials are added at the beginning of processing in the Cleaning Department. Required: 1. Compute the equivalent units for May for the Cleaning Department, assuming that the company uses the weightedaverage method of accounting for units. Question 5: Grand Bend Company produces a highquality insulation material that passes through two production processes. Data for November for the first process follow: Units Completion with Respect to Materials Completion with Respect to Conversion WIP, November 1 80,000 50% 25% WIP, November 30 60,000 45% 20% Materials cost in WIP inventory, June 1 Conversion cost in WIP inventory, June 1 Totals $76,600 34,900 Units started into production 300,000 Units transferred to the next process 320,000 Materials costs added during June 410,000 Conversion cost added during June 234,500 Required: 1. 2. 3. Assume that the company uses the weightedaverage method of accounting for units and costs. Determine the equivalent unit for November for the first process. Compute the costs per equivalent unit for November for the first process. Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process in November