Solutions to Exercises Ex. 17–1 a. Process costing or activity-based costing b. Cost of finished goods manufactured c. Equivalent units d. None (this statement describes underapplied overhead) e. Job order costing or activity-based costing f. Activity-based costing Ex. 17–2 a. (1) Materials Inventory XXX Accounts Payable XXX To record the purchase of direct materials. (2) Work in Process Inventory XXX Materials Inventory
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the predetermined overhead allocation rate for every activity‚ and allocate indirect costs to the cost object. I will use the production of a shirt to explain the process of ABC. Manufacturing a shirt requires three activities: setup‚ production‚ and shipping/packaging. In the setup stage‚ the machines are weaved with the proper thread‚ and oiled down‚ which allows the shirts to then be manufactured. After production‚ the shirts are packaged and shipped out. The estimated overhead cost for setup in
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Assignment Print View 10/4/12 9:51 PM Score: 48 out of 60 points (80%) 9. award: 2 out of 2.00 points MC Qu. 60 Which of the following best describes the re... Which of the following best describes the relationship between revenue and retained earnings? Revenue increases net income‚ which in turn increases retained earnings. Revenue represents a cash receipt; retained earnings is an element of stockholders’ equity. Revenue represents the price of goods sold or services rendered;
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steps for your roommate. 6. There are two inventory control accounts in a job order system. Identify the control accounts and their subsidiary ledgers. 7. What source documents are used in accumulating direct labor costs? 8. “Entries to Manufacturing Overhead normally are only made daily.” Do you agree? Explain. 9. Tony Andres is confused about the source documents used in assigning materials and labor costs. Identify the documents and give the entry for each document. 10. What is the purpose
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of a manufacturing company outsourcing would be Dell buying some of its computer components from another manufacturer in order to save on production costs. Alternatively‚ businesses may decide to outsource book-keeping duties to independent accounting firms‚ as it may be cheaper than retaining an in-house accountant. Outsourcing in Manufacturing According to an article by Kenneth Hamlett‚ when the term outsourcing in regard to a manufacturing company
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Cost of wood used in display at national trade show. ____ 4) Depreciation of the wood used in the manufacturing plant. ____ 5) Salary of the scientists attempting to find another source of writing material. ____ 6) Cost of customer order forms. ____ 7) Depreciation of delivery trucks. 2) Elm Table Company manufactures tables. The company uses a budgeted indirect-cost rate for its manufacturing operations‚ and in 19X9 allocated the following amounts to the work-in process inventory‚ finished-goods
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Problem 1 The Commonwealth Company uses a job-order cost system and applies manufacturing overhead cost to jobs using a predetermined overhead rate basedon the cost of materials used in production. At the beginning of the year‚ the following estimates were made as a basis for computing the predetermined overhead rate: manufacturing overhead cost‚$186‚000; direct materials cost‚$155‚000. The following transactions took place during the year (all purchases and services were acquired on account): a
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valves. Over the year‚ the company has extended their product range to pumps and flow controllers. The main learning outcome from analyzing the case study is manufacturing overhead cost allocation. Exhibit 2 in the case study shows pumps has a highest manufacturing overhead cost compare to valves and flow controller. The common overhead cost drivers in the production are machine hours‚ production runs and hours of engineering work. The key issue in this case study is the gross margin on pump sales
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form of unprocessed coffee beans. However‚ the company’s predominately automated roasting‚ blending‚ and packing processes require a substantial amount of manufacturing overhead. Some of IBI’s coffees are very popular and sell in large volumes‚ while a few of the newer blends sell in very low volumes. IBI prices its coffees at manufacturing cost plus a markup of 25% with some adjustments made to keep the company prices competitive. IBI has just completed a year of operations and the controller
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Exercises. Completion Statements 1. The variable overhead flexible-budget variance subdivides into which two variances? Spending Variance and efficiency Variance. 2. To compute the budgeted variable overhead cost rate for a manufacturing company divide budgeted variable overhead costs by the budgeted quantity of the Cost allocation base. 3. To compute the budgeted fixed overhead cost rate for a manufacturing company‚ divide budgeted fixed overhead costs by the Budgeted total quantity of cost-allocation
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