Thursday, 17 April 2014

Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity based costing system contains the following six activity cost pools and activity rates:

Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity based costing system contains the following six activity cost pools and activity rates:  
  Activity Cost Pool         Activity Rates
  Labor related $ 7.40  per direct labor-hour
  Machine related $ 3.41  per machine-hour
  Machine setups $ 41.00  per setup
  Production orders $ 195.00  per order
  Shipments $ 106.00  per shipment
  General factory $ 3.81  per direct labor-hour


Cost and activity data have been supplied for the following products:
 
  K425 M67
  Direct materials cost per unit $ 5.72   $ 39.99  
  Direct labor cost per unit $ 3.72   $ 6.54  
  Number of units produced per year   3,900     40  


  Total Expected Activity
   K425    M67
  Direct labor-hours 890     30  
  Machine-hours 3,400     35  
  Machine setups 8     1  
  Production orders 6     1  
  Shipments 10     1  


Required:
Compute the unit product cost of each product listed above. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
 
  K425 M67
  Unit product cost $   $  
 

Explanation:
The overhead costs assigned to each product would be computed as follows:
 
  K425 M67
  Expected
Activity
Amount Expected
Activity
Amount
  Labor related, at $7.40 per direct labor-hour 890      $ 6,586   30   $  222  
  Machine related, at $3.41 per machine-hour 3,400        11,594   35     119  
  Machine setups, at $41.00 per setup 8        328   1     41  
  Production orders, at $195.00 per order 6        1,170   1     195  
  Shipments, at $106.00 per shipment 10        1,060   1     106  
  General factory, at $3.81 per direct labor hour 890        3,391   30     114  
   
 
  Total overhead cost assigned (a)   $ 24,129     $ 798  
   

 

  # of units produced     3,900       40  
   

 

  Overhead cost per unit   $ 6.19     $ 19.94  
   

 



The product costs combine direct materials, direct labor, and overhead costs as follows:
 
  K425   M67
  Direct materials $ 5.72     $ 39.99  
  Direct labor   3.72       6.54  
  Manufacturing overhead (see above)   6.19       19.94  
 
 
  Unit product cost $ 15.63     $ 66.47  
 

 

Thursday, 10 April 2014

Jurvin Enterprises recorded the following transactions for the just completed month. The company had no beginning inventories.



Brief Exercise 2-7 Prepare T-Accounts [LO7, LO8]
[The following information applies to the questions displayed below.]

Jurvin Enterprises recorded the following transactions for the just completed month. The company had no beginning inventories.

a.
$75,100 in raw materials were purchased for cash.
b.
$72,500 in raw materials were requisitioned for use in production. Of this amount, $65,300 was for direct materials and the remainder was for indirect materials.
c.
Total labor wages of $152,400 were incurred and paid. Of this amount, $134,300 was for direct labor and the remainder was for indirect labor.
d.
Additional manufacturing overhead costs of $125,600 were incurred and paid.
e.
Manufacturing overhead costs of $138,300 were applied to jobs using the company's predetermined overhead rate.
f.
All of the jobs in progress at the end of the month were completed and shipped to customers.
g.
Any underapplied or overapplied overhead for the period was closed out to Cost of Goods Sold.
Brief Exercise 2-7 Requirement 1
Requirement 1:
Post the above transactions to T-accounts. (Record the transactions in the given order. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Cash






  (a)
  


  (c)




  (d)






Raw Materials




  (a)

  (b)
  


  Balance
  













Work in Process




  (b)
  


  (c)
  


  (e)
  
  (f)
  


  Balance
  

  











Finished Goods




  (f)

  (f)
  


  Balance
  













Manufacturing Overhead




  (b)
  
  (e)
  
  (c)
  
  (g)
  
  (d)
  




  Balance
  

  











Cost of Goods Sold




  (f)
  


  (g)
  




  Balance
    












Brief Exercise 2-7 Requirement 2
Requirement 2:
Determine the cost of goods sold for the period. (Omit the "$" sign in your response.)

  Cost of goods sold
$