Econ

 137A(1)-­‐F18  EXAM#1  (100  points)                                  Name______________________________  

 
Problem  1  –  Job  costing–cost  calculations  (30  points)  (275)  Pangle  Corporation  has  two  production  departments,  
Forming  and  Customizing.  The  company  uses  a  job-­‐order  costing  system  and  computes  a  predetermined  overhead  
rate  in  each  production  department.  The  Forming  Department's  predetermined  overhead  rate  is  based  on  
machine-­‐hours  and  the  Customizing  Department's  predetermined  overhead  rate  is  based  on  direct  labor-­‐hours.  At  
the  beginning  of  the  current  year,  the  company  had  made  the  following  estimates:  
 
    Forming   Customizing  
  Machine-­‐hours   16,000   12,000  
  Direct  labor-­‐hours   4,000   9,000  
  Total  fixed  manufacturing  overhead  cost   $91,200   $99,000  
  Variable  manufacturing  overhead  per  machine-­‐hour   $2.10    
  Variable  manufacturing  overhead  per  direct  labor-­‐hour     $3.10  
 
During  the  current  month  the  company  started  and  finished  Job  M109.  The  following  data  were  recorded  for  this  
job:  
 
  Job  M109:   Forming   Customizing  
  Machine-­‐hours   50   30  
  Direct  labor-­‐hours   20   50  
  Direct  materials   $915   $355  
  Direct  labor  cost   $620   $1,550  
 
Required:  
Calculate  the  total  job  cost  for  Job  M109.  
 
Problem  2–Job  costing–cost  flows  (35  points)  (237)  Sefcovic  Enterprises  LLC  recorded  the  following  transactions  
for  the  just  completed  month.  The  company  had  no  beginning  inventories.  
(1)  Raw  materials  purchased  for  cash,  $110,000  
(2)  Direct  materials  requisitioned  for  use  in  production,  $79,000  
(3)  Indirect  materials  requisitioned  for  use  in  production,  $15,000  
(4)  Direct  labor  wages  incurred  and  paid,  $125,000  
(5)  Indirect  labor  wages  incurred  and  paid,  $22,000  
(6)  Additional  manufacturing  overhead  costs  incurred  and  paid,  $134,000;  selling  and  administrative  expenses  
incurred  and  paid,  $247,000  
(7)  Manufacturing  overhead  costs  applied  to  jobs  at  100%  of  direct  labor  cost  
(8)  All  of  the  jobs  in  process  were  completed.  
(9)  All  of  the  completed  jobs  were  shipped  to  customers  at  a  total  sales  price  of  $782,000  
(10)  Any  underapplied  or  overapplied  overhead  for  the  period  was  closed  out  to  Cost  of  Goods  Sold.  
 
Required:  
 
a.  Post  the  above  transactions  as  applicable  to  the  following  T-­‐accounts:  Raw  Materials,  Work  in  Process,  Finished  
Goods,  Manufacturing  Overhead.  
b.  Determine  the  operating  income  for  the  period.  
 
 
 
 
 
 
(over)  
 
Write  your  name  in  the  space  provided  in  the  upper  right-­‐hand  corner  and  turn  in  this  exam  with  your  bluebook.  
Answer  all  questions  in  your  bluebook.  Show  all  your  work  and  clearly  label  all  answers.    
 
  
Problem  3–Process  costing  (35  points)  (128)  Anders  Inc.  uses  the  weighted-­‐average  method  in  its  process  costing  
system.  The  following  data  concern  the  operations  of  the  company's  first  processing  department  for  a  recent  
month.  
 
       
Work  in  process,  beginning:      
Units  in  process       800      
Percent  complete  with  respect  to  materials       70  %  
Percent  complete  with  respect  to  conversion       10  %  
Costs  in  the  beginning  inventory:            
Materials  cost   $   1,736      
Conversion  cost   $   2,288      
               
Units  started  into  production  during  the  month       18,000      
               
Costs  added  to  production  during  the  month:              
Materials  cost   $   59,908      
Conversion  cost   $   520,696      
             
Work  in  process,  ending:              
Units  in  process       400      
Percent  complete  with  respect  to  materials       70   %  
Percent  complete  with  respect  to  conversion       20  %  
     
Required:  
 
a. Determine  the  number  of  units  completed  and  transferred  out.  
b. Determine  the  equivalent  units  of  production.  
c. Determine  the  costs  per  equivalent  unit.  
d. Determine  the  cost  of  ending  work  in  process  inventory.  
e. Determine  the  cost  of  the  units  transferred  to  the  next  department.