1. A company uses the weighted average method for inventory costing. During a period, a production department had 20,000 units in beginning goods in process inventory which were 40% complete; the department completed and transferred 165,000 units. At the end of the period, 22,000 units were in the ending goods in process inventory and are 75% complete. All of these are with respect to labor. The production department had labor costs in the beginning goods is process inventory of $99,000 and total labor costs added during the period are $726,825. Compute the equivalent cost per unit for labor.
2. Baker Corporation has two operating departments, Machining and Assembly, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: Office Expenses Total Allocation Basis Salaries $30,000 Number of employees Depreciation 20,000 Cost of goods sold Advertising 40,000 net sales Item Machining Assembly Total Number of employees 1,000 1,500 2,500 Net sales $325,000 $475,000 $800,000 Cost of goods sold $ 75,000 $ 125,000 $200,000 The amount of office expenses that should be allocated to Assembly for the current period is:
3. Wilson Trade School allocates administrative costs to its respective departments based on the number of students enrolled, while maintenance and utilities are allocated per square feet of classrooms. Based on the information below, what is the total amount of expenses allocated to the Automotive Department (rounded to the nearest dollar) if administrative costs for the school were $50,000, maintenance fees were $12,000, and utilities were $6,000? Department Students Classrooms Electrical 120 10,000 sq ft Automotive 70 12,000 sq ft Secretarial 50 8,000 sq ft Plumbing 40 6,000 sq ft
4. White Company has two service departments and two operating (production) departments. The Payroll department services all three of the other departments in proportion to the number of employees in each. Also, the Maintenance Department services the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period; Service Depts. Production Depts. Payroll Maintenance Milling Assembly Direct costs $20,400 $25,500 $76,500 $105,400 Number of personnel 15 15 45 Sq. ft. of space 10,000 15,000 The total cost of operating the Milling Department for the current period is what?
5. Mace Department store allocates its service department expenses to its various operating (sales) departments. The following data is available: Expense Basis for allocation Amount Rent Square feet of floor space $24,000 Advertising Amount of dollar sales $30,000 Administrative Number of employees $45,000 The following information is available for its three operating (sales) departments: Square Dollar Number of Department Feet Sales Employees A 3,000 $280,000 6 B 3,400 $300,000 8 C 3,600 $420,000 10 What is the total expense allocated to Department B?
6. Camden Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are: M N O Unit sales price $7 $4 $6 Unit variable costs 3 2 3 Total fixed costs are $340,000. What is the break-even point in sales dollars for the
current sales mix?
Use the following to answer questions 7-9:
Kyle, Inc., has collected the following data on one of its products:
Direct materials standard (4 lbs @ $1/lb) $4 per finished unit
Total direct materials cost variance %u2013 unfavorable $13,750
Actual direct materials used 150,000 lbs
Actual finished units produced 30,000 units
7. What is the actual cost of the direct materials used?
8. What is the direct materials quantity variance?
9. What is the direct materials price variance?
10. The following present value factors are provided for use in this problem:
Present Value Present Value of an
Periods of 1 at 8% Annuity of 1 at 8%
1 0.9259 0.9259
2 0.8573 1.7833
3 0.7938 2.5771
4 0.7350 3.3121
Norman Co. wants to purchase a machine for $40,000, but needs to earn a 8% return. The expected year-end net cash flows are $12,000 in each of the first three years, and $16,000 in the fourth year. What is the machine’s net present value (round to the nearest whole dollar)?