Managerial Accounting E-1,2,3,5,6,7

# Managerial Accounting E-1,2,3,5,6,7 - Question 1...

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Question # 1 Apollo Enterprises recorded the following activity in work-in-process inventory for September: Direct Labor \$15,000 Direct Materials 10,000 Factory supervisor's salary, September 3,000 Indirect materials 7,000 Factory utilities 500 1,000 units were started and completed during the month. Solution: WIP Material 10,000 Finished goods 40,000 Direct labour 15,000 FOH 15,000 40,000 40,000 Per unit cost = 40,000 \$40 1,000 Question # 2 2. (Unit Costing Using Actual and Normal Costing) Danes Boots Co. manufactures cowboy boots. Information related to a recent production period is as foll Estimated manufacturing overhead, 2004 \$240,000 Estimated machine hours, 2004 \$12,000 Direct Labor cost, September \$8,000 Direct Materials cost, September \$5,000 Supervisor's salary, September \$3,000 Factory rent, September \$1,800 Factory utilities, September \$800 Indirect materials cost, September \$2,000 Machine hours worked, September 400 During September, 500 pairs of boots were produced. Solution Using actual costing, what is the unit cost of one pair of boots produced during September? Answer Direct Labor cost, 8,000

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Direct Materials cost, 5,000 Supervisor's salary, 3,000 Factory rent, 1,800 Factory utilities, 800 Indirect materials cost 2,000 Actual Cost \$20,600 Per unit cost = Total Cost Units 20,600 500 \$41.2 Using normal costing, with machine hours as th3e activity base, what is the unit cost of one pair of boots Answer Estimated manufacturing overhead, 240,000 Estimated machine hours, 12,000 Applied overhead rate 240,000 12,000 \$20.0 Direct Labor cost, 8,000 Direct Materials cost, 5,000 Applied overhead (20 X 400) 8,000 Normal Cost 21,000 Per unit cost = Total Cost Units 21,000 500 \$42.0 If normal costing is used, was manufacturing overhead over - or under applied during September? By ho Answer If normal costing is used, was manufacturing overhead over applied during September by Actual 7,600 Applied 8,000 (over applied) (400) What might have caused the amount of overhead applied to be different from the actual amount?
Answer Why would managers at Danes Boots Co. choose to use normal costing rather than actual costing? Answer Question # 4 beginning work-in-process on October 1 was 40,000 gallons. 20,000 gallons were started into production in department B during October.

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Managerial Accounting E-1,2,3,5,6,7 - Question 1...

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