Archives: Solution Manual

Problem 07-49 Student Name: Class: 1. TOLEDO TOOL COMPANY Budgeted Income Statement For the Year Ended December 31, 20×4 Hedge Line Leaf Clippers Trimmers Blowers Total Unit selling price * * * Variable manufacturing cost * * * Variable selling […]

6-52 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 6-46 (CONTINUED) (c) Fixed- and variable-cost components: Monthly fixed cost = $11,796 Variable cost = $677 per hundred […]

6-41 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 6-42 (40 MINUTES) 50 100 150 200 250 The lower part of the vertical axis has been shortened. […]

Chapter 06 – Activity Analysis, Cost Behavior, and Cost Estimation EXERCISE 6-33 (45 MINUTES) 1. Variable utility cost per hour = 400 700 $2,600 $3,800 − − = $4.00 Total utility cost at 700 hours ……………………………………………………………. $ 3,800 Variable utility […]

Chapter 06 – Activity Analysis, Cost Behavior, and Cost Estimation 6-1 CHAPTER 6 Activity Analysis, Cost Behavior, and Cost Estimation ANSWERS TO REVIEW QUESTIONS 6-1 Cost behavior patterns are important in the process of making cost predictions. Cost predictions are […]

DATA INPUT Month Flights Airport Costs January 1,200 20,000$ February 1,000 19,000 March 900 18,000 April 1,400 19,000 May 800 17,000 June 1,100 20,000 July 1,500 21,000 August 900 17,000 September 1,200 21,000 October 1,000 19,000 November 1,400 24,000 December […]

DATA INPUT Material-Handling Month Units of Activity Department Costs January 1,800 11,700$ February 1,600 11,300 March 1,300 11,250 April 1,000 10,200 May 2,200 11,100 June 2,400 12,550 July 2,000 12,000 August 1,800 11,400 September 2,600 12,120 October 1,100 11,050 November […]

DATA INPUT Cost of Number of On-Board Flight Month Passengers Service January 16,000 54,000$ February 17,000 54,000 March 16,000 57,000 April 18,000 60,000 May 15,000 54,000 June 17,000 57,000 SOLUTION 1. Cost behavior of the airline’s on-board flight service using […]

DATA INPUT Hours of Month Operation Utility Cost January 550 3,240$ February 600 3,400 March 700 3,800 April 500 3,200 May 450 2,700 June 400 2,600 SOLUTION 3. Least- squares regression: Fixed- and variable-cost components:* Monthly fixed cost (intercept): 1,002$ […]

DATA INPUT Miles Traveled Month by Tour Buses Cost November 12,750 17,100 real December 15,900 17,400 January 19,050 17,550 February 22,500 18,000 March 30,000 18,750 April 12,000 16,500 SOLUTION 1. Variable cost per tour mile traveled and fixed cost per […]

3. Explain the importance of the relevant range in using a cost behavior pattern for cost prediction. 5. Describe and use the following cost estimation methods: account classification, visual fit, high-low, and least-squares regression. 7. Describe some problems often encountered […]

Problem 06-46 Student Name: Class: Airport Month Flights Costs January * * February * * March * * April * * May * * June * * July * * August * * September * * October * * November […]

5-74 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 5-66 (CONTINUED) 2. In the electronic version of the solutions manual, press the CTRL key and click on […]

5-61 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 5-59 (CONTINUED) 3. The unit costs of the products using activity-based costing are calculated as follows: Fabricating: Total […]

5-41 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 5-54 (50 MINUTES) 1. Activity Cost Pool Type of Activity I: Machine-related costs Unit-level II: Setup and inspection […]

5-21 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. EXERCISE 5-44 (20 MINUTES) There are many key activities that can be suggested for each business. Some possibilities are […]

Chapter 05 – Activity-Based Costing and Management 5-1 CHAPTER 5 Activity-Based Costing and Management ANSWERS TO REVIEW QUESTIONS 5-1 In a traditional, volume-based product-costing system, only a single predetermined overhead rate is used. All manufacturing-overhead costs are combined into one […]

DATA INPUT Customer-Related Activities Cost Driver Base Cost Driver Rate Sales activity Sales visits 2,000$ Order taking Purchase orders 400 Special handling Units handled 100 Special shipping Shipments 1,000 Customer-Related Activities Caltex Computer Trace Telecom Sales activity 8 6 Order […]

DATA INPUT Gismos (product G): 8,000 units Thingamijigs (product T): 15,000 units Whatchamacallits (product W): 4,000 units Product G Product T Product W Raw material 105.00$ 157.50$ 52.50$ Direct labor 48.00 36.00 24.00 Manufacturing overhead 420.00 315.00 210.00 Total product […]

DATA INPUT Budgeted Budgeted Level Activity Cost Pool Overhead Cost Driver for Cost Driver Pool Rate Machine setups 1,000,000$ Number of setups 250 4,000$ Material handling 300,000 Weight of raw material 75,000 4$ Hazardous waste control 100,000 Weight of hazardous […]

DATA INPUT Budgeted Budgeted Level Activity Cost Pool Overhead Cost Driver for Cost Driver Pool Rate Machine setups 1,000,000$ Number of setups 250 4,000$ Material handling 300,000 Weight of raw material 75,000 4$ Hazardous waste control 100,000 Weight of hazardous […]

Direct material 30.00$ 45.00$ Direct labor 45.00$ 60.00$ Manufacturing overhead 106.50$ 142.00$ Total cost 181.50$ 247.00$ Machine processing 500,000 50,000 10$ Product inspection 90,000 15,000 6$ Machine processing 230,000 270,000 Product inspection 24,000 66,000 Total 324,000 386,000$ Production volume (units) […]

DATA INPUT: Cost Cost Product Activity Cost Driver Driver Line Cost Cost Driver Product Quantity for Quantity for Production Activity Pool Driver Quantity Line Product Line Product Line Volume Machine 310,500$ Machine 115,000 REG 50,000 50,000 5,000 Related Hours ADV […]

4. Compute product costs under an activity-based costing system. 6. Explain three criteria for selecting cost drivers. 8. Explain the concepts of activity-based management and two-dimensional ABC. 10. Understand and discuss how activity-based costing is used in service-industry organizations. Copyright […]

Case 05-68 Student Name: Class: 1. Explain how activity-based costing differs from traditional product- costing methods. 2. Cincinnati Cycle Company Activity Cost Pools and Pool Rates Material handling * Overhead increase rate * Total activity cost pool * JY-63 parts […]

Problem 05-59 Student Name: Class: 1 a. The calculation of total budgeted costs for the Manufacturing Department at Scott Manufacturing is as follows: Direct Material: * Tuff Stuff * Ruff Stuff * Total direct Material * * Direct Labor * […]

Problem 05-58 Student Name: Class: 1. Identify at least four general advantages associated with activity-based costing. a. b. c. d. 2. ULTRATECH, INC. Expected Contribution Margin Total for 40,000 PC Board Per Unit Units Revenue * * Direct material * […]

Problem 05-55 Student Name: Class: 1. (a.) Predetermined overhead rate using direct-labor as single cost driver: Total manufacturing overhead cost * Budgeted direct-labor cost * Overhead per direct-labor dollar * 1. (b) Full product costs and selling prices per one-pound […]

4-34 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 4-35 (CONTINUED) Cost of goods completed and transferred out during November:        […]

4-21 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 4-29 (40 MINUTES) 1. a. Equivalents units: Physical Units Percentage of Completion with Respect to Conversion Equivalent Units […]

Chapter 04 – Process Costing and Hybrid Product-Costing Systems 4-1 CHAPTER 4 Process Costing and Hybrid Product-Costing Systems ANSWERS TO REVIEW QUESTIONS 4-1 In a job-order costing system, costs are assigned to batches or job orders of production. Job-order costing […]

Rolling, molding, punching 4,000 4,000 Rolling, molding, punching, dipping 1,500 Conversion cost per unit 150.00$ 140.00$ 160.00$ 150.00$ Ceralam sheets 960,000$ 400,000$ 240,000$ 1,600,000$ Chemical dip 60,000 60,000 DATA INPUT Direct Materials Direct Materials Orbital Industries of Canada, Ltd. Used […]

DATA INPUT Moravia Company Work in process, April 1 – 10,000 units: Direct material: 100% complete, cost of 22,000$ Conversion: 20% complete, cost of 4,500 Balance in work in process, April 1 26,500$ Units started during April 100,000 Units completed […]

DATA INPUT Raleigh Textiles Company Equivalent units of direct material (weighted-average) 62,500 Equivalent units of conversion (weighted-average) 49,000 Units completed and transferred out during September 47,000 Work in process, September 1 Direct material 85,750$ Conversion 16,900 Costs incurred during September […]

3. Prepare a table of equivalent units under weighted-average process costing. 5. Analyze the total production costs for a department under the weighted-average method of process costing. 7. Describe how an operation costing system accumulates and assigns the costs of […]

Problem 4-27 Student Name: Class: 1. Physical flow of units: Physical Units Work in process, 1/1/x4 * Units started during 20×4 * Total units to account for * Units completed and transferred out during 20×4 * Work in process, 12/31/x4 […]

3-41 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 3-56 (25 MINUTES) 1. Quarter Predetermined Overhead Rate Calculations 1st ……………………………………………………….. $8 per hour $400,000/50,000 2nd ………………………………………………………. 10 […]

3-21 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 3-43 (35 MINUTES) 1. Predetermined overhead rate = budgeted overhead ÷ budgeted direct-labor cost = $2,730,000 ÷ $2,100,000 […]

Chapter 03 – Product Costing and Cost Accumulation in a Batch Production Environment 3-1 CHAPTER 3 Product Costing and Cost Accumulation in a Batch Production Environment ANSWERS TO REVIEW QUESTIONS 3-1 (a) Use in financial accounting: In financial accounting, product […]

DATA INPUT Superior Metals Corporation Sales revenue 1,578,750$ Raw-material inventory, 12/31/x3 66,750 Purchases of raw material in 20×4 548,250 Raw-material inventory, 12/31/x4 44,250 Direct-labor cost incurred 355,500 Selling and administrative expenses 201,750 Indirect labor cost incurred 112,500 Property taxes on […]

DATA INPUT Paramus Metal Works hours per hour Budgeted direct-labor cost: 77,000 17$ Actual direct-labor cost: 79,000 18$ Budgeted manufacturing overhead: 993,300$ Actual manufacturing overhead: Depreciation 225,000$ Property taxes 19,000 Indirect labor 79,000 Supervisory salaries 210,000 Utilities 58,000 Insurance 32,000 […]

DATA INPUT Crunchem Cereal Company incurred costs Direct material used 412,500$ Direct labor 180,000 Manufacturing overhead 378,000 Overhead rate 210% January 1 inventory balances End of Year Raw material 45,000$ 49,500$ Work in process 58,500 64,350 Finished goods 63,000 69,300 […]

8. Describe the process of project costing used in service industry firms and nonprofit organizations. 5. Prepare journal entries to record the costs of direct material, direct labor, and manufacturing overhead in a job-order costing system. Chapter 03 – Product […]

Problem 03-44 Name: Class: Enter appropriate data in the blue cells. An asterisk (*) to the right indicates an incorrect amount. Mister Munchie, Inc. Schedule of Cost of Goods Manufactured For the Year Ended December 31, 20×1 Direct material: Raw-material […]

Case 03-62 Student Name: Class: Opticom, Inc. Requirements 1 – 6 1. Explain why manufacturers use a predetermined overhead rate to apply manufacturing overhead to their jobs. 2. Manufacturing overhead applied through November 30: Machine hours * Predetermined overhead rate […]

Exercise 3-37 Student Name: Class: Budgeted Overhead Rate = Budgeted Overhead/Budgeted Direct Professional Labor Budgeted Overhead * Budgeted Direct Professional Labor * Budgeted Overhead Rate * Contract to redecorate Mayor’s offices: Direct Material * Direct Professional Labor * Overhead applied […]

2-19 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 2-45 (40 MINUTES) Case A Case B Case C Sales …………………………………………………………………….. $1,600,000* $1,500,000* $240,000 Beginning inventory, raw material […]

Chapter 02 – Basic Cost Management Concepts Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. CHAPTER 2 Basic Cost Management Concepts ANSWERS TO REVIEW QUESTIONS 2-1 Product costs […]

DATA INPUT Accounting Records: Raw materials purchases 350,000$ Direct Labor 508,000 Indirect labor 218,000 Selling and administration salaries 266,000 Building depreciation 160,000 Other selling and administration expenses 380,000 Other factory costs 688,000 Sales revenue 2,990,000 Sales price 260 Building devoted […]

DATA INPUT Laredo Luggage Company for the year 20×2 Sales revenue 475,000$ Work-in-process inventory, December 31 15,000 Work-in-process inventory, January 1 20,000 Selling and administrative expenses 75,000 Income tax expense 45,000 Purchase of raw material 90,000 Raw-material inventory, December 31 […]