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# E2-4 Manufacturing cost data for Copa Company, which uses a job order cost system, are presented below.

E2-4 Manufacturing cost data for Copa Company, which uses a job order cost system, are presented below.
Case A               Case B              Case C
Direct materials used \$ (a) \$ 83,000 \$ 63,150
Direct labor 50,000 100,000 (h)
Manufacturing overhead applied 42,500 (d) (i)
Total manufacturing costs 165,650 (e) 250,000
Work in process 1/1/05 (b) 15,500 18,000
Total cost of work in process 201,500 (f) (j)
Work in process 12/31/05 (c) 11,800 (k)
Cost of goods manufactured 192,300 (g) 262,000
Instructions
Indicate the missing amount for each letter. Assume that in all cases manufacturing overhead is applied on the basis of direct labor cost and the rate is the same.
a. _________
b. _________
c. _________
d. _________
e. _________
f. _________
g. _________
h. _________
i. _________
j. _________
k. _________
3. E2-10  Tomlin Company begins operations on April 1. Information from job cost sheets shows the following.
Manufacturing Costs Assigned
Job Number April May June Month Completed
10 \$5,200 \$4,400 May
11 6,100 3,900 \$3,000 June
12 1,200 April
13 4,700 4,500 June
14 3,900 3,600 Not complete
Job 12 was completed in April. Job 10 was completed in May. Jobs 11 and 13 were completed in June. Each job was sold for 50% above its cost in the month following completion.
Instructions
1. What is the balance in Work in Process Inventory at the end of each month?
2. What is the balance in Finished Goods Inventory at the end of each month?
3. What is the gross profit for May, June, and July?
1. ___________
2. ___________
3. ___________
a. __________May?
b. __________June?
c. __________ July?
4. E3-4 The Cutting Department of Behan Manufacturing has the following production and cost data for July.
Production Costs
1. Transferred out 9,000 units. Beginning work in process \$  -0-
2. Started 1,000 units that are 40% complete as to conversion costs and 100% complete as to materials at July 31. Materials 45,000
Labor 14,940
Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process.
Instructions
1. Determine the equivalent units of production for (1) materials and (2) conversion costs.
2. Compute unit costs and prepare a cost reconciliation schedule.
1. ___________
a. __________  Materials
b. __________  Conversion
2. _________________Unit Costs?
____________________ Cost Reconciliation Schedule
5. 4-12. Lim Clothing Company manufactures its own designed and labeled sports attire and sells its products through catalog sales and retail outlets. While Lim has for years used activity-based costing in its manufacturing activities, it has always used traditional costing in assigning its selling costs to its product lines. Selling costs have traditionally been assigned to Lim's product lines at a rate of 70% of direct material costs. Its direct material costs for the month of March for Lim's "high intensity" line of attire are \$400,000. The company has decided to extend activity-based costing to its selling costs. Data relating to the "high intensity" line of products for the month of March are as follows.
Activity Cost Pools             Cost    Drivers            Overhead Rate          Number of Cost Drivers Used per Activity
Sales commissions    Dollar sales            \$0.05 per dollar sales \$930,000
Advertising-Newspaper    Column inches              \$10 per column inch 2,000
Catalogs Catalogs mailed           \$2.50 per catalog 60,000
Cost of catalog sales Catalog orders            \$1 per catalog order 9,000
Credit and collection Dollar sales            \$0.03 per dollar sales \$930,000
Instructions
1. Compute the selling costs to be assigned to the "high-intensity" line of attire for the month of March: (1) using the traditional product costing system (direct material cost is the cost driver), and (2) using activity-based costing.
2. By what amount does the traditional product costing system undercost or overcost the "high-intensity" product line?
3. Classify each of the activities as value-added or non-value-added.
1. _________________ Selling Costs
b. ______________ Activity-base costing
2. __________________Under cost and Overcost
c. ________________Catalogs
d. ________________ Credit and Collection
6.E5-6 In the month of June, Angela's Beauty Salon gave 3,500 haircuts, shampoos, and permanents at an average price of \$30. During the month, fixed costs were \$16,800 and variable costs were 80% of sales.
Instructions
1. Determine the contribution margin in dollars, per unit, and as a ratio.
2. Using the contribution margin technique, compute the break-even point in dollars and in units.
1. ______________Contribution Margin
a. ________________Dollars
b. ________________ Per Unit
c. ________________ Ratio
2. Break-even
a. _______________ Dollars
b. _______________ Units
7. E6-3. Stahl Inc. has been manufacturing its own shades for its table lamps. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 70% of direct labor cost. The direct materials and direct labor cost per unit to make the lamp shades are \$5 and \$6, respectively. Normal production is 30,000 table lamps per year.
A supplier offers to make the lamp shades at a price of \$15.50 per unit. If Stahl Inc. accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the \$45,000 of fixed manufacturing overhead currently being charged to the lamp shades will have to be absorbed by other products.
Instructions
1. Prepare the incremental analysis for the decision to make or buy the lamp shades.
2. Should Stahl Inc. buy the lamp shades?
3. Would your answer be different in (b) if the productive capacity released by not making the lamp shades could be used to produce income of \$35,000?
1. ___________________ Incremental Analysis for the decision to make or buy
2. ___________________ Make or buy the lamp shades?
3. ___________________ Consider the \$35,000 item
8. E8-8.
Padong Remanufacturing rebuilds spot welders for manufacturers. The following budgeted cost data for 2006 is available for Padong.
Technicians' wages and benefits \$228,000 -
Parts manager's salary and benefits - \$42,500
Office employee's salary and benefits 38,000 9,000
Other overhead 15,200 24,000
Total budgeted costs \$281,200 \$75,500
The company desires a \$35 profit margin per hour of labor and a 25% profit margin on parts. It has budgeted for 7,600 hours of repair time in the coming year, and estimates that the total invoice cost of parts and materials in 2006 will be \$400,000.
Instructions
1. Compute the rate charged per hour of labor.
2. Compute the material loading percentage. (Round to three decimal places.)
3. Lindy Corporation has requested an estimate to rebuild its spot welder. Padong estimates that it would require 40 hours of labor and \$2,500 of parts. Compute the total estimated bill.
1._________________  Rate per hour
3. _________________ Compute bill
9. E9-1
Vosser Electronics Inc. produces and sells two models of pocket calculators, XQ-103 and XQ-104. The calculators sell for \$12 and \$25, respectively. Because of the intense competition Vosser faces, management budgets sales semiannually. Its projections for the first 2 quarters of 2005 are as follows.
Unit Sales
Product             Quarter 1            Quarter 2
XQ-103                 30,000                25,000
XQ-104                 12,000                13,000
No changes in selling prices are anticipated.
Instructions
Prepare a sales budget for the 2 quarters ending June 30, 2005. List the products and show for each quarter and for the 6 months, units, selling price, and total sales by product and in total.
Sales Budget
10. E11-5
Kopecky Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product.
Direct materials (8 pounds at \$2.50 per pound) \$20
Direct labor (3 hours at \$12.00 per hour) \$36
During the month of April, the company manufactures 240 units and incurs the following actual costs.
Direct materials purchased and used (1,900 pounds) \$4,940
Direct labor (700 hours) \$8,120
Instructions
Compute the total, price, and quantity variances for materials and labor.
1. Materials  _______________
a. Total Materials Variance_______________
b. Materials Price Variance_______________
c. Material quantity variance_____________
2. Labor _______________
a. Labor Total Variance ________________
b. Labor Price Variance  ________________
c. Labor Quantity Variance ___________

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