Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 1, Problem 4.1GBP
Classifying Costs, Calculating Total Costs, and Identifying Impact of Classifications Assume that Maria Cottonwood (PBl-2) has decided to begin production of her fire extinguisher. Her company is Blaze Be Gone, whose costs for last month follow.
Identify each of the preceding cost as either a product or a period cost. If the cost is a product cost, decide whether it is direct materials (DM), direct labor (DL), or manufacturing overhead (MOH).
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Students have asked these similar questions
a) Compute the predetermined overhead rate under the current method of allocation and determine the unit
product cost of each product for the current year
b) The company's overhead costs can be attributed to four major activities. These activities and the amount of
overhead cost attributable to each for the current year are given below. Using the data below and an activity-based
costing approach, determine the unit product cost of each product for the current year.
Expected Activity
Activity Cost
Estimated
Product B
Product H
Total
Pools
Overhead
Costs
Machine
setups
required
Purchase
orders issued
$180,000
600
1,200
1,800
38,382
500
100
600
Machine-
92,650
6,800
10,200
17,000
hours
required
Maintenance
138.968
693
907
1,600
requests
ued
$450,000
Hankook Company employ new employee and are assigned to make Statement of Cost of Manufactured, Statement of Cost of Goods Sold, and Income Statement. The results attached on picture below
Questions :
a. Identify the period cost and the total in USD
b. If there is something wrong with the income statement above, correct the income statement above so all the item cost is where it should be.
c. Calculate the prime costs, conversion costs, manufacturing cost, and the period cost
4. Determine the prime cost & conversion cost of the cases manufactured.
5. Prepare a schedule of cost of goods manufactured for the year ended December 31, 2020, clearly showing total manufacturing cost & total manufacturing costs to account for.
6. Prepare an income statement for Pro-Leather Company for the year ended December 31, 2020. List the non-manufacturing overheads in order of size starting with the largest.
7. What is the factory cost per case if Pro-Leather manufactured 19,200 cases for tablets for the year?8. How does the format of the income statement for a manufacturing concern differ from the income statement of a merchandising entity?
Chapter 1 Solutions
Managerial Accounting
Ch. 1 - What is the primary difference between financial...Ch. 1 - Prob. 2QCh. 1 - Why are traditional, GAAP-based financial...Ch. 1 - Prob. 4QCh. 1 - consider the area within a 3-mile radius of your...Ch. 1 - What are the three basic functions of management?Ch. 1 - How are the three basic management functions...Ch. 1 - What are ethics and why is ethical behavior...Ch. 1 - Prob. 9QCh. 1 - Prob. 10Q
Ch. 1 - Prob. 11QCh. 1 - Prob. 12QCh. 1 - Why are businesses starting to incorporate...Ch. 1 - What factors does sustainability accounting...Ch. 1 - Think about your activities over the last week....Ch. 1 - Prob. 16QCh. 1 - Why is it important for managers to be able to...Ch. 1 - Prob. 18QCh. 1 - Prob. 19QCh. 1 - Explain the difference between relevant and...Ch. 1 - Prob. 21QCh. 1 - What are prime costs? Why have they decreased in...Ch. 1 - Prob. 23QCh. 1 - Why can't prime cost and conversion cost be added...Ch. 1 - Prob. 25QCh. 1 - Prob. 26QCh. 1 - Prob. 27QCh. 1 - Prob. 28QCh. 1 - Prob. 29QCh. 1 - Prob. 1MCCh. 1 - Prob. 2MCCh. 1 - Prob. 3MCCh. 1 - Prob. 4MCCh. 1 - Prob. 5MCCh. 1 - What is Garcia's total manufacturing cost? a....Ch. 1 - Prob. 7MCCh. 1 - What is Garcia's manufacturing overhead? a....Ch. 1 - Prob. 9MCCh. 1 - Which of the following would not be treated as a...Ch. 1 - MINI-EXERCISES Comparing Financial and Managerial...Ch. 1 - Prob. 4MECh. 1 - Prob. 5MECh. 1 - Prob. 6MECh. 1 - Prob. 8MECh. 1 - Prob. 9MECh. 1 - Prob. 10MECh. 1 - Identifying Direct and Indirect Costs for a...Ch. 1 - Prob. 12MECh. 1 - Identify sustainability issues affecting the...Ch. 1 - Classifying Costs Seth's Skateboard Company incurs...Ch. 1 - Calculation Costs Cotton White, Inc., makes...Ch. 1 - Prob. 7ECh. 1 - Prob. 8ECh. 1 - Classifying Costs Blockett Company makes...Ch. 1 - Prob. 10ECh. 1 - Prob. 12ECh. 1 - Prob. 13ECh. 1 - Explaining Effects of Cost Misclassification Donna...Ch. 1 - Prob. 4.1GAPCh. 1 - Prob. 4.2GAPCh. 1 - Prob. 4.3GAPCh. 1 - Prob. 3.1GBPCh. 1 - Prob. 3.2GBPCh. 1 - Classifying Costs, Calculating Total Costs, and...Ch. 1 - Prob. 4.2GBPCh. 1 - Classifying Costs, Calculating Total Costs, and...
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- Identifying Cost Behavior. Mountainside Company is trying to identify the cost behavior of the three costs that follow. Cost information is provided for three months. Cost A Cost B Cost C Month Units Produced Total Costs Cost per Unit Total Costs Cost per Unit Total Costs Cost per Unit 1 1,500 $1,500 _____ $4,500 _____ $3,000 _____ 2 3,000 1,500 _____ 5,250 _____ 6,000 _____ 3 750 1,500 _____ 3,750 _____ 1,500 _____ Required: Calculate the cost per unit, and then identify how the cost behaves for each of the three costs (fixed, variable, or mixed). Explain the reasoning for your answers. How does identifying cost behavior patterns help managers?arrow_forwardView Policies Current Attempt in Progress Manufacturing cost data for Marin Company are presented as follows. Determine the missing amount for each letter (a) through (i). Direct materials used Direct labor Manufacturing overhead Total manufacturing costs Work in process 1/1/22 Total cost of work in process Work in process 12/31/22 Cost of goods manufactured Save for Later Case A 72,000 58,800 250,100 282,800 237,020 (a) (b) (c) Case B $88,300 109,600 103,700 85,200 13,600 (d) (e) (f) Case C Attempts: 0 of 7 used $166,400 129,600 323,000 430,400 89,600 (g) (h) (i) Submit Answerarrow_forwardApply the Concepts, Cost Reporting Medco Inc., a manufacturing firm, has four activities: purchasing materials, molding, inspecting molds, and grinding imperfect molds. Purchasing materials and molding are necessary activities; inspection and grinding are unnecessary. SQ provides the value-added quantity for each activity; AQ is the actual activity output. The following data pertain to the four activities for the year ending (actual price per unit of the activity driver is assumed to be equal to the standard price): Activity Activity Driver Purchasing Purchasing hours Molding Inspecting Inspection hours Molding hours Grinding. Number of units Required: SQ AQ SP 28,000 34,000 $20 42,000 47,600 121 0 8,400 15 0 6,000 6 1. Prepare a cost report for the year 1 ended that shows value-added costs, non-value-added costs, and total costs for each activity by completing the following table: Value-and Non-Value-Added Cost Report for the Year 1 Ended Activity Value-Added Costs Non-Value-Added…arrow_forward
- d) Determine the prime cost & conversion cost of the cases manufactured. e) Prepare a schedule of cost of goods manufactured for the year ended December 31, 2020, clearly showing total manufacturing cost & total manufacturing costs to account for. f) Prepare an income statement for Pro-Leather Company for the year ended December 31, 2020. List the non-manufacturing overheads in order of size starting with the largest. g) What is the factory cost per case if Pro-Leather manufactured 19,200 cases for tablets for the year? h) How does the format of the income statement for a manufacturing concern differ from the income statement of a merchandising entity?arrow_forwardAnalyzing cost data, recording completion and sales of jobs Clement Manufacturing makes carrying cases for portable electronic devices. Its costing records yield the following information: Requirements Which type of costing system is Clement using? What piece of data did you base your answer on? Use the dates in the table to identify the status of each job at October 31 and November 50. Compute Clements account balances at October 31 for Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold. Compute, by job, account balances at November 30 for Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold. Prepare journal entries to record the transfer of completed jobs from Work-in-Process Inventory to Finished Goods Inventory for October and November. Record the sale of job 3 for $2,300 on account. What is the gross profit for Job 3?arrow_forwardClassify each of the following costs as either unit-level, batch-level, product-level, or facility-level. a. Engineering costs for a new product b. Order processing c. Depreciation on factory d. Direct labor e. Shipment of an order to a customer f. Product line manager salary g. Machine setup costs that are incurred whenever a new production order is started h. Patent for new product ore help Product-level Batch-level or Unit-level or Facility-level Facility-level Unit-level Unit-level Batch-level Batch-level or Facility-level Batch-level or Unit-level Batch-level or Unit-level or Facility-level Facility-level Facility-level or Product-level Facility-level or Unit-level Product-level Unit-level allarrow_forward
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