HWCh.3 - Exercise31(10minutes a b c d e f g h i j k l...

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Exercise 3-1  (10 minutes) a. Job-order costing b. Job-order costing c. Process costing d. Job-order costing e. Process costing* f. Process costing* g. Job-order costing h. Job-order costing i. Job-order costing j. Job-order costing k. Process costing l. Process costing *Some of the listed companies might use either a process costing or  a job-order costing system, depending on the nature of their  operations and how homogeneous the final product is. For  example, a plywood manufacturer might use job-order costing if it  has a number of different plywood products that are constructed of  different woods or come in markedly different sizes. Problem 3-16  (45 minutes) 1. The actual manufacturing overhead costs incurred were as  follows: Reference (a) Indirect materials ....................................... $  38,000 (b) Indirect labor ............................................. 27,000 (c) Factory heat, power, and water ................. 42,000 (d) Factory insurance ...................................... 9,000 (f) Factory depreciation ..................................       51,000     Total manufacturing overhead incurred ..... $167,000 In contrast, $170,000 in manufacturing overhead cost was applied  to jobs: $153,000 = $4.25 per MH; 40,000 MHs × $4.25 per MH= $170,000. 36,000 MHs
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Therefore, the overhead was overapplied by $3,000. Manufacturing overhead incurred ........... $167,000 Manufacturing overhead applied (40,000 MHs  ×  $4.25 per MH) .............   170,000     Overhead overapplied ............................ $        3,000     2. The cost of goods sold for the year (before adjustment for  underapplied or overapplied overhead) is $475,000—the total cost  to manufacture the goods that were sold according to their job cost  sheets. The adjusted cost of goods sold is computed as follows: Unadjusted cost of goods sold ....................... $475,000 Deduct: Overapplied overhead ...................... 3,000 Cost of goods sold ......................................... $472,000 The selling and administrative expenses for the year were: Reference (b) Sales commissions ................................... $  36,000 (b) Administrative salaries .............................. 80,000 (d) Insurance .................................................. 1,000 (e) Advertising ................................................ 50,000 (f) Depreciation ..............................................           9,000     Total selling and administrative expense. . $176,000 Ravsten Company Income Statement For the Year Ended December 31 Sales ....................................................... $700,000 Cost of goods sold ..................................   472,000     Gross margin .......................................... 228,000 Selling and administrative expense .........   176,000     Net operating income .............................. $      52,000    
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Problem 3-17  (30 minutes) 1. To determine the cost of goods sold using the direct method, we  must determine the unit product costs for the two jobs from which  units were sold. We can then determine the unadjusted cost of  goods sold as follows: Job A256 Job A258 Total Beginning balance .......................
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