Question
1. Distinguish between a traditional costing system and an activity-based costing (ABC) system, and explain some
2. Lockhart Products manufactures custom-built ships. Each ship is built to customer specificat
job cost sheet for an incinerator manufactured for the Galveston Harbor Corporation:
Lockhart Products
Job:
Galveston
Form Reference
8-May-15
M. Martinez
V. Garza
Steel
9-May-15
M. Martinez
Applied Overhead
DTS.05.08.X7.RB
DTS.05.08.X7.SS
MR.05.08.X7.RB
DTS.05.09.X7.SS
Totals
(a) What types of costs do you imagine would be included
application
(b) Lockhart
is rate?
considering installation of a robotic mach
overhead
and
application
method?
(c) How does the the
applied
overhead
relate to the actual ove
overhead not assigned to each job?
3. Tee Time Products, Inc. produces handmade golf clubs. The process is labor intensive. The s
Management has established a standard of 2 labor hours per club. The standard wage ra
4. The standard direct material cost to produce one widget is four meters of widget line (ma
$17,500
were purchased and used to produce 1,500 units of widgets. What was the material pri
a. $200 Favorable
b. $500 Unfavorable
c. $800 Unfavorable
d. $500 Favorable
5. The Machining Department is the first of a 2-stage production process. Spoilage is identified
assigned to units completed and transferred to the second department in the period spoilage is
2016:
Units
Conversion Costs
Beginning WIP (50% Complete)
Units started during May
Spoilage – normal
Units completed and transferred
Ending WIP (80% Complete)
4,500
16,500
500
15,500
5,000
$20,000
$160,000
Using the weighted average method, what was Machining’s conversion cost transferred to the se
a.
b.
c.
d.
$150,000
$160,000
$144,000
$140,000
6. A 2017 Cash Budget is being prepared for the purchase of widgets. Budgeted data are:
Cost of Goods Sold (2017)
$400,000
Accounts Payable (1/1/2017)
Inventory (1/1/2017)
Inventory (12/31/2017)
$10,000
$50,000
$85,000
Purchases will be made in 12 equal monthly amounts and paid for in the following month. What
a.
b.
c.
d.
$399,750
$408,750
$400,000
$475,000
7. Which is the best cost accumulation procedure to use when there is a continuous mass produ
A.
B.
C.
D.
E.
Process.
Standard.
Job order.
ABC.
None of these.
8. An equivalent unit of material is equal to:
A.
B.
C.
D.
E.
the amount of material necessary to complete one unit of production.
a unit of work in process inventory.
the amount of material necessary to start a unit of production into work in process.
fifty percent of the material cost of a unit of finished goods.
None of these.
(True or False)
9. To apply process costing, there is no need to decide on a specific methods such as FIFO or we
(ABC) system, and explain some benefits of ABC?
built to customer specifications. Most of the direct labor time is spent on welding activities. Following is
bor Corporation:
Job Cost Sheet
Direct Labor
Hours
Rate
9
1
$25
$12
Total
$
$
Direct Material
Cost
Qty
Total
Per Unit
12
$12
Qty
Rate
?
?
225
12
10
2
Applied Overhead
$
24
$
261
$
80
$
800
$
800
imagine would be included in factory overhead? If overhead is applied based on direct labor hours, wha
tallation of a robotic machine that will do all welding operations. How might this decision impact t
on
method?
head
relate to the actual overhead? When they are not the same, what happens to the difference? Why i
ach job?
ess is labor intensive. The speed at which a club can be built depends on the skill level of the individual
ub. The standard wage rate is $12 per hour. During a recent month, 2,500 custom clubs were pro
r meters of widget line (material) at $3.00 per meter. Durig May 2016, 6,000 meters of line (material)
. What was the material price variance for May 2016?
ocess. Spoilage is identified when the units have completed the Machining process. Costs of spoiled units
ent in the period spoilage is identified. The following information concerns Machining’s conversion costs i
on cost transferred to the second production department?
s. Budgeted data are:
the following month. What is the 2017 budgeted cash payment for purchases of these widgets?
is a continuous mass production of like units?
methods such as FIFO or weighted-average.
ding activities. Following is the
Job Cost Sheet
lied Overhead
Total
Total
$
$
$
$
$
360
360
225
12
800
$
24
$ 360
$ 1,421
on direct labor hours, what is the
ght this decision impact the total
ns to the difference? Why is actual
skill level of the individual worker.
00 custom clubs were produced.
0 meters of line (material) costing
cess. Costs of spoiled units are
chining’s conversion costs in May
of these widgets?
