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ACC569 Week_2_solutions

# ACC569 Week_2_solutions - 3.57(50 min Material Inventory...

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3.57 (50 min) Job costs in a service company Material Inventory Balance 6/1 (given) 920 16 Indirect Materials Purchases (given) 116 314 Requisition Balance 6/30 706 Work-in-Process Inventory (a) Balance 6/1 576 504 Job P-20 (c) (b) Job P-20 170 850 Job P-43 (e) (d) Job P-43 608 (f) New Job P-45 556 Balance 6/30 556 Finished-Goods Inventory Balance 6/1 (\$392 + \$158) 550 (c) Job P-20 504 550 Sold (e) Job P-43 850 Balance 6/30 1,354 a. Direct Material + Direct Labor + Applied Overhead = \$174 + \$32 + \$64 + \$84 + [150% + (\$64 + \$84)] = \$576 . b. To complete Job P-20: \$68 Direct Labor + (\$68 x 150%) Applied Overhead = \$170 . c. Transfer to Finished Goods: Job P-20 Beginning Inventory Cost + Current Cost = \$174 + \$64 + 150%(\$64) + \$170 = \$504 . d. To complete Job P-43: \$108 Material + \$200 Direct Labor + (150% x \$200) Applied Overhead = \$108 + \$200 + \$300 = \$608 . e. Transfer of Job P-43: Beginning Inventory Cost + Current Cost = [\$32 + \$84 + 150%(\$84)] + [\$108 + \$200 + 150%(\$200)] = \$850 . f. New Job Cost = Current Charges to WIP less Current Charges for Jobs P-20 and P-43: = Current Material + Direct Labor + Overhead – Job P-20 Current Cost – Job P-43 Current Cost = \$314 + \$408 + \$150%(\$408) – \$170(b)* – \$608(d)* = \$556 . *These letters refer to solution parts (b) and (d) above.

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4.49 (60 min) Computing product profitability a. Answer is in the last column labeled “Rate per Unit of Measure.” (A) (B) (=A/B) Rate per Activity Activity Unit of Activity/Resource Cost Volume Unit of Mea Measure 1. Unit Level 1.1 Materials for Product A \$60,000 1,000,000 units \$0.06 1.2 Direct labor for Product A \$20,000 2,000 direct labor \$10.00 1.3 Materials for Product B \$80,000 800,000 units \$0.10 1.4 Direct labor for Product B \$30,000 2,000 direct labor \$15.00 2. Batch-Level 2.1 Setup and quality control
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ACC569 Week_2_solutions - 3.57(50 min Material Inventory...

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