Managerial Accounting-Group Case 1

Part A: Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement Nish Corporation has provided the following data for the month of April:Sales...............................................$220,000Raw materials purchases...............$50,000Direct labor cost............................$23,000Manufacturing overhead cost........$59,000Selling expense..............................$18,000Administrative expense.................$43,000Inventories:Beginning Ending Raw materials........$26,000$35,000Work in process.....$18,000$22,000Finished goods.......$42,000$29,000Required:a.Prepare a Schedule of Cost of Goods Manufactured in good form for April.b.Prepare an Income Statement in good form for April. Part B: Application of Job Order Costing Scanlon Company has a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The following estimates were used in preparing the predetermined overhead rate for the most recent year:Machine-hours...............................95,000Manufacturing overhead cost........$1,710,000During the most recent year, a severe recession in the company’s industry caused a buildup of inventory in the company’s warehouses. The company’s cost records revealed the following actual cost and operating data for the year:Machine-hours.............................................................................75,000Manufacturing overhead cost......................................................$1,687,500Amount of applied overhead in inventories at year-end:Work in process........................................................................$337,500Finished goods..........................................................................$253,125Amount of applied overhead in cost of goods sold..................$759,375Required:a.Compute the company's predetermined overhead rate for the year and the amount of underapplied or overapplied overhead for the year.b.Determine the difference between net operating income for the year if the underapplied or overapplied overhead is allocated to the appropriate accounts rather than closed directly to Cost of Goods Sold. Part C: Process Costing using Weighted AverageTimberline Associates uses the weighted-average method in its process costing system. The followingdata are for the first processing department for a recent month:Work in process, beginning:Units in process........................................................2,400Percent complete with respect to materials..............75%Percent complete with respect to conversion...........50%Costs in the beginning inventory:Materials cost...........................................................$8,400Conversion cost........................................................$7,200Units started into production during the month...........20,800Units completed and transferred out...........................22,200Costs added to production during the month:Materials cost...........................................................$97,400Conversion cost........................................................$129,600Work in process, ending:Units in process........................................................1,000Percent complete with respect to materials..............80%Percent complete with respect to conversion...........60%Required:a.Determine the equivalent units of production.b.Determine the costs per equivalent unit.c.Determine the cost of ending work in process inventory.d.Determine the cost of the units transferred to the next department. Part D: Process Costing usingFirst-in-First Out (FIFO)Crone Corporation uses the FIFO method in its processing costing system. The following data concern the company's Assembly Department for the month of October.Cost in beginning work in process inventory........$1,920Units started and completed this month................3,130MaterialsConversionCost per equivalent unit.........................................$9.50$20.40Equivalent units required to complete the units in beginning work in process inventory.................360140Equivalent units in ending work in process inventory............................................................330264Required:Determine the cost of ending work in process inventory and the cost of units transferred out of the department duringOctober using the FIFO method. PartE: Activity-Based CostingWelk Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, H16Z and P25P, about which it has provided the following data:H16ZP25PDirect materials per unit................$10.20$50.50Direct labor per unit......................$8.40$25.20Direct labor-hours per unit............0.401.20Annual production.........................30,00010,000The company’sestimated total manufacturing overhead for the year is $1,464,480 and the company’s estimated total direct labor-hours for the year is 24,000.The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:Activities and Activity MeasuresEstimated Overhead CostSupporting direct labor (DLHs).................$552,000Setting up machines (setups).....................132,480Parts administration (part types)................780,000Total...........................................................$1,464,480H16ZP25PTotalSupporting direct labor......12,00012,00024,000Setting up machines...........8642401,104Parts administration...........6009601,560Required:a.Determine the manufacturing overhead cost per unit of each of the company's two products under the traditional costing system.b.Determine the manufacturing overhead cost per unit of each of the company's two products under activity-based costing system

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