Bed & Bath, a retailing company, has two
departments—Hardware and Linens. The company’s most recent monthly...
Bed & Bath, a retailing company, has two
departments—Hardware and Linens. The company’s most recent monthly
contribution format income statement follows:
Department
Total
Hardware
Linens
Sales
$
4,330,000
$
3,180,000
$
1,150,000
Variable expenses
1,245,000
825,000
420,000
Contribution margin
3,085,000
2,355,000
730,000
Fixed expenses
2,370,000
1,480,000
890,000
Net operating income (loss)
$
715,000
$
875,000
$
(160,000
)
A study indicates that $372,000 of the fixed expenses being
charged to Linens are sunk costs or allocated costs that will
continue...
O'Leary Company manufactures Product Z in a two-stage production
cycle in Departments A and B. Materials...
O'Leary Company manufactures Product Z in a two-stage production
cycle in Departments A and B. Materials are added at the beginning
of the process in Department B. O'Leary uses the weighted-average
method. Conversion costs for Department B were 40% complete as to
the 27,500 units in the beginning work-in-process (WIP) inventory
and 50% complete as to the 38,500 units in the ending
work-in-process inventory. 55,000 units were completed and
transferred out of Department B during October. An analysis of the...
A company manufactures a product that passes through two
production departments: molding and assembly. Direct materials...
A company manufactures a product that passes through two
production departments: molding and assembly. Direct materials are
added in the assembly department when conversion is 50% complete.
Conversion costs are incurred uniformly. The activity in units for
the assembly department during April is as follows:
Units
Work-in-process inventory, April 1
(60% complete as to conversion costs)
5,000
Transferred in from molding department
32,000
Defective at final inspection (within normal limits)
2,500
Transferred out to finished goods inventory
28,500
Work-in-process inventory,...
(TCO B) The Florida Company manufactures a product that goes
through three processing departments. Information relating...
(TCO B) The Florida Company manufactures a product that goes
through three processing departments. Information relating to
activity in the first department during June is given below.
Percentage Completed
Units
Materials
Conversion
Work in process, June 1
160,000
75%
65%
Work in process, Jun 30
130,000
65%
45%
The department started 650,000 units into production during the
month and transferred 680,000 completed units to the next
department.
Required: Compute the equivalent units of production for the first
department for June,...
Mocha Company manufactures a single product by a continuous
process, involving three production departments. The records...
Mocha Company manufactures a single product by a continuous
process, involving three production departments. The records
indicate that direct materials, direct labor, and applied factory
overhead for Department 1 were $100,000, $125,000, and $150,000,
respectively. The records further indicate that direct materials,
direct labor, and applied factory overhead for Department 2 were
$55,000, $65,000, and $80,000, respectively. In addition, work in
process at the beginning of the period for Department 1 totaled
$75,000, and work in process at the end...
Mocha Company manufactures a single product by a continuous
process involving three production departments. The records...
Mocha Company manufactures a single product by a continuous
process involving three production departments. The records
indicate that direct materials, direct labor, and applied factory
overhead for Department 1 were $100,000, $125,000, and $150,000,
respectively. Work in process at the beginning of the period for
Department 1 was $75,000, and work in process at the end of the
period totaled $60,000. The records indicate that direct materials,
direct labor, and applied factory overhead for Department 2 were
$50,000, $60,000, and...
PART ONE:
Barstow Manufacturing Company has two service departments —
product design and engineering support, and...
PART ONE:
Barstow Manufacturing Company has two service departments —
product design and engineering support, and two production
departments — assembly and finishing. The distribution of each
service department's efforts to the other departments is shown
below:
FROM
TO
Design
Support
Assembly
Finishing
Design
0
%
20
%
10
%
70
%
Support
10
%
0
%
40
%
50
%
The direct operating costs of the departments (including both
variable and fixed costs) were as follows:
Design
$
130,000...
Activity-Based Department Rate Product Costing and Product Cost
Distortions
Big Sound Inc. manufactures two products: receivers...
Activity-Based Department Rate Product Costing and Product Cost
Distortions
Big Sound Inc. manufactures two products: receivers and
loudspeakers. The factory overhead incurred is as
follows:
Indirect labor
$400,400
Subassembly Department
198,800
Final Assembly Department
114,800
Total
$714,000
The activity base associated with the two production departments
is direct labor hours. The indirect labor can be assigned to two
different activities as follows:
Activity
Budgeted Activity Cost
Activity Base
Setup
$138,600
Number of
setups
Quality control
261,800
Number of
inspections
Total...
Tuscaloosa Company manufactures a hand-held computer.
The company expects production of 7,000 units this year. Currently,...
Tuscaloosa Company manufactures a hand-held computer.
The company expects production of 7,000 units this year. Currently,
Tuscaloosa produces the processor, which is a component of the
computer. Tuscaloosa has received an offer from Auburn, Inc., to
supply the processor.
If Tuscaloosa discontinues production of the processor,
the company will be able to eliminate its product-level costs
because no other products along the same line are produced by the
company. However, due to its concern for quality, the company will
have...