Question 1(Total: 36 marks)

The following costs are attributed to the Gandalf and Company:

Purchase of raw materials (all direct)

$291,100

Direct labour cost

141,800

Manufacturing overhead costs

198,100

Change in inventories:

Decrease in raw materials

$9,100

Decrease in work in process

4,100

Decrease in finished goods

13,200

Gandalf and Company used a 120% predetermined overhead rate based on direct labour cost.

Required:

1.Calculate the cost of goods manufactured.

1.What was the cost of goods sold before adjusting for any under or over applied overhead?

2.By how much was manufacturing overhead cost under or over applied?

3.Prepare a summary journal entry to close any under or over applied manufacturing overhead cost to cost of goods sold. Is such an entry appropriate in this situation? Why or why not?

Question 2(Total: 20 marks)

The weighted-average method is used by the Cardiff and Company. Below you will find information provided by the Heating department for the month of March:

Costs for March:

Materials

Conversion

Work in process, March 1

$19,200

$23,100

Added during the month

$89,000

$99,000

Units

Conversion percentage complete

Work in process, March 1

10,000

50%

Units started

28,000

Completed and transferred out

19,900

Work in process, March 31

5,000

30%

Required:

Cardiff and Company using the weighted-average method, all materials at the first process:

1.The equivalent units (EUs) of production for materials.

2.The cost per equivalent unit for conversion.

3.The total cost assigned to units transferred out of the Heating Department during March.

4.The cost assigned to work-in-process inventory as of March 31.

Question 3(Total: 30 marks)

Paddle Place manufactures paddles and tables. In December, the two production departments had budgeted allocation bases of 3,100 machine-hours in Paddle and 6,900 direct manufacturing labor-hours in Table. The budgeted manufacturing overheads for the month were $51,200 and $56,900, respectively. For Project X, the actual costs incurred in the two departments were as follows:

Paddle

Table

Direct materials purchased on account

$80,000

$177,500

Direct materials used

21,200

12,200

Direct manufacturing labor

41,900

53,500

Indirect manufacturing labor

8,900

9,000

Indirect materials used

5,100

4,750

Lease on equipment

14,100

3,750

Utilities

990

1,250

Project X incurred 900 machine-hours in Paddle and 200 manufacturing labor-hours in Table. The company uses a budgeted overhead rate for applying overhead to production.

Required:

1.Determine the budgeted manufacturing overhead rate for each department.

2.Prepare the journal entries for Paddle department.

3.What is the total cost of Project X?

Question 4(Total: 14 marks)

Identify the following situations as "job-order costing" or "process costing"?

Situation

Job Order or Process Costing

An oil refinery

A soft-drink bottler

A film studio

A manufacturer of fine custom jewelry

A textbook publisher

A paint factory

A golf course designer

Question 3 Paddle Place manufactures paddles and tables. In December, the two production departments had budgeted allocation bases of 3,100 machine-hours in Paddle and 6,900 direct manufacturing labor-hours in Table. The budgeted manufacturing overheads for the month were $51,200 and $56,900, respectively. For Project X, the actual costs incurred in the two departments were as follows: Paddle Table Direct materials purchased on account $80.000 $177,500 Direct materials used 21,200 12,200 Direct manufacturing labor 41,900 53,500 Indirect manufacturing labor 8,900 9,000 Indirect materials used 5,100 4,750 Lease on equipment 14,100 3,750 Utilities 990 1,250 Project X incurred 900 machine-hours in Paddle and 200 manufacturing labor-hours in Table. The company uses a budgeted overhead rate for applying overhead to production. Required: 1. Determine the budgeted manufacturing overhead rate for each department. 2. Prepare the journal entries for Paddle department. 3. What is the total cost of Project X