Multiple Choice:

1D Supporting Solutions:
2B 29) Direct materials consumed 45,000.00
3C Direct labor 30,000.00
4D Direct expenses 10,000.00
5D Total 85,000.00
6A
7B 30) Sales 500,000.00
8B COGS (350,000.00)
9C Gross Margin 150,000.00
10 A Operating expense (30,000.00)
11 A Operating Income 120,000.00
12 C
13 D 31) Total Product Cost 30,000.00
14 B Units produced 24,000.00
15 D Cost per unit 1.25
16 A
17 D Units Sold 22,000.00
18 B Cost per unit 1.25
19 C COGS 27,500.00
20 B
21 C 32) Direct materials 100,000.00
22 B Direct labor 90,000.00
23 C Total 190,000.00
24 C
25 B 34) Total costs of 20,000 75,000.00
26 D 20,000 parcels 20,000.00
27 D Cost per unit 3.75
28 C 12,000 parcels 12,000.00
29 A Total costs 45,000.00
30 B
31 B 35) Direct materials and direct labor
32 B Other variable manufacturing costs
33 C Depreciation of factory building and manufacturing equipment
34 B Other fixed manufacturing overhead
35 D Total
36 B
37 A 36) Materials used 95,000.00
38 A Direct labor 80,000.00
39 C Factoru overhead 120,000.00
40 C Total costs 295,000.00
Decreasw in WIP 19,000.00
Increase in FG (26,000.00)
Cost of Goods sold 288,000.00

37) Total Manufacturing Costs 219,000.00

Less: Direct materials Used (94,000.00)
 Conversion cost 125,000.00

38) Total Manufacturing costs 219,000.00

Decrease in WIP 21,000.00
Total goods manufactured 240,000.00
Increase in FG (45,000.00)
COGS 195,000.00

Sales 325,000.00
COGS 195,000.00
Gross Margin 130,000.00

39)
Total operating costs and expense 560,000.00
Multiply by 0.75
Manufacturing OH 420,000.00

40)

Raw materials purchases 72,000.00

Add: Raw materials, oct1 58,600.00
Total raw materials to be used 130,600.00
Raw Materials, Oct 31 (60,200.00)
Direct materials Used 70,400.00
Direct labor 40,000.00
Factory overhead 64,000.00
Total Manufacturing costs 174,400.00
WIP, oct 1 46,000.00
Total 220,400.00
WIP, oct 31 (62,000.00)
Cost of goods manufactured 158,400.00
FG, Oct 1 87,300.00
COGAS 245,700.00
FG, Oct 31 (90,700.00)
COGS 155,000.00
700,000.00
100,000.00
80,000.00
18,000.00
898,000.00
Problem P5-4
Support Departments
Maintenance Technology
Costs incurred 83,200.00 50,000.00
Percentages
Maintenance 0.10
Technology 0.20
Mixing Department 0.30 0.20
Fishing Department 0.50 0.70

Direct Distribution Method

Maintenance Technology Mixing
Costs incurred 83,200.00 50,000.00
Allocation of maintenance costs (83,200.00) 31,200.00
Allocation of Technology Costs (50,000.00) 11,111.11
Total costs 0.00 0.00 42,311.11

Squential distribution or step-down method

Maintenance Technology Mixing
Costs incurred 83,200.00 50,000.00
Maintenace costs allocation (83,200.00) 16,640.00 24,960.00
Total 0.00 66,640.00 24,960.00
Technology costs allocation (66,640.00) 14,808.89
Total costs after allocation 0.00 0.00 39,768.89

Algebraic or Reciprocal Distribution Method

Let: Maintenance be M and Technology be T

Maintenance (M)= 83,200 + 0.10T

Technology (T)= 50,000 + 0.20M

M= 83,200 + 0.10 (50,000 + 0.20 M) T= 50,000 + 0.20 (90,000)

M= 83,200 + 5,000 + 0.02M T= 50,000 + 18,000
0.98M= 88,200 T= 68,000
M= 90,000
Maintenance Technology Mixing
Costs incurred 83,200.00 50,000.00
Maintenace costs allocation (90,000.00) 18,000.00 27,000.00
Total (6,800.00) 68,000.00 27,000.00
Technology costs allocation 6,800.00 (68,000.00) 13,600.00
Total costs after allocation 0.00 0.00 40,600.00
Fishing Total
133,200.00
52,000.00 0.00
38,888.89 0.00
90,888.89 133,200.00

Fishing Total
133,200.00
41,600.00 0.00
41,600.00 133,200.00
51,831.11 0.00
93,431.11 133,200.00

Fishing Total
133,200.00
45,000.00 0.00
45,000.00 133,200.00
47,600.00 0.00
92,600.00 133,200.00
Multiple choice problem
1C Supporting Solutions:
2A 5) Factory overhead incurred
3C Less: Applied factory overhead
4A Underapplication
5C
6A Journal entry:
7A Cost of goods sold
8D Factory Overhead
9A
10 A Total Costs to account for
11 C Ending Work in Process
12 D Cost of goods Manufactured
13 B Ending Finished goods
14 C Cost of goods sold
15 A
16 B 6) Orders
17 A High 1,800.00
18 A Low 1,200.00
19 C Total 600.00
20 A
21 A variable cost
22 B
7) Units
High 18,000.00
Low 10,000.00
Total 8,000.00

Variable cost per unit

8) 21,600.00 a+ 0.20x
21,600.00 a+ (0.20*18,000)
21,600.00 a+3,600
18,000=a

9) Fixed cost
Add: Variable cost/unit *14,000
Total cost

10)
11)
13) Actual in labor hours-mixing
Variable cost per hour
To be allocates

14) Fixed cost- finishin

Multiply by: (budgeted labor hours ratio)
 To be allocated

Nos. 15-17

Costs incurred
Maintenance allocation
Personnel allocation
Total costs

15) 224,500.00
16) 227,000.00
17) 47,500.00

18) Actual manufacturing overhead

Applied manufacturing overhead
Overapplied

19) Direct labor hours

Multiply by: predetermined rate
Appled overhead

20) Total manufacturing costs

Less: raw materials used
Applied Overhead and Direct labor

Applied overhead
Direct labot
Toal applied and direct labor

21) Applied overhead

Divided by: Direct labor
Percentage of applied overhead

Direct labor
% of applied overhead
Applied overhead

22) Direct labor

% of applied overhead
Applied overhead
 340,600.00
(310,000.00)
30,600.00

30,600.00
Factory Overhead 30,600.00

310,000.00
(62,000.00)
248,000.00
(31,000.00)
217,000.00

Costs
4,320.00
3,120.00
1,200.00

2.00

Cost
21,600.00
20,000.00
1,600.00

0.20

18,000.00
2,800.00
20,800.00

18,000.00
10.00
180,000.00

80,000.00
labor hours ratio) 0.40
 32,000.00

Maintenance Personnel Cutting Molding Total Maintenance

120,000.00 60,000.00 140,000.00 150,000.00 470,000.00 Costs incurred 120,000.00
(120,000.00) 20,000.00 52,500.00 47,500.00 0.00 Maintenance allocatio (120,000.00)
(80,000.00) 32,000.00 48,000.00 0.00 Personnel allocation
0.00 0.00 224,500.00 245,500.00 470,000.00 Total costs 0.00

500,000.00
(600,000.00)
(100,000.00)

150,000.00
6.00
900,000.00

882,000.00
(122,000.00)
Direct labor 760,000.00

0.60 285,000.00
1.00 475,000.00
1.60 760,000.00

80,000.00
100,000.00
0.80

20,000.00
0.80
16,000.00

25,000.00
0.80
20,000.00
Personnel Cutting Molding Total
60,000.00 140,000.00 150,000.00 470,000.00
63,000.00 57,000.00 0.00
(60,000.00) 24,000.00 36,000.00 0.00
0.00 227,000.00 243,000.00 470,000.00