Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Textbook Question
Chapter 2, Problem 22E
Ellerson Company provided the following information for the last calendar year:
During the year, direct materials purchases amounted to $278,000, direct labor cost was $189,000, and
Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of $1,312,000 and had selling and administrative expenses of $204,600.
Required:
- 1. What is the cost of goods sold for last year?
- 2. Prepare an income statement for Ellerson for last year.
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Winston Company estimates that the factory overhead for the following year will be $675,400. The company has decided that the basis for applying
factory overhead should be machine hours, which is estimated to be 30,700 hours. The total machine hours for the year were 54,100. The actual factory
overhead for the year was $1,183,000.
a. Determine the total factory overhead amount applied. Round to the nearest dollar.
b. Compute the over- or underapplied amount for the year. Enter the amount as a positive number.
C. Journalize the entry to transfer the over- or underapplied factory overhead to cost of goods sold. If an amount box does not require an entry, leave it
blank.
Winston Company estimates that the factory overhead for the following year will be $833,900. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 26,900 hours. The total machine hours for the year were 54,000 hours. The actual factory overhead for the year was $1,697,000.
Required:
a.
Determine the total factory overhead amount applied.
b.
Compute the overapplied or underapplied amount for the year. Enter the amount as a positive value.
c.
Prepare the journal entry to close Factory Overhead into Cost of Goods Sold. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
Use the following information for the Exercise below. (Algo)
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[The following information applies to the questions displayed below.]Barnes Company reports the following for its product for its first year of operations.
Direct materials
$ 34
per unit
Direct labor
$ 24
per unit
Variable overhead
$ 12
per unit
Fixed overhead
$ 54,000
per year
Variable selling and administrative expenses
$ 2
per unit
Fixed selling and administrative expenses
$ 26,000
per year
Exercise 19-4 (Algo) Computing cost per unit at different production levels LO P1, P2
P1. Compute total product cost per unit using absorption costing for the following production levels: (a) 3,000 units, (b) 3,600 units, and (c) 4,500 units.
P2. The company sells its product for $140 per unit. Compute contribution margin using variable costing assuming the company (a) produces and sells 3,000 units and (b) produces 3,600 units and sells 3,000 units.
Chapter 2 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 2 - What is an accounting information system?Ch. 2 - What is the difference between a financial...Ch. 2 - What are the objectives of a cost management...Ch. 2 - Define and explain the two major subsystems of the...Ch. 2 - What is a cost object? Give some examples.Ch. 2 - Prob. 6DQCh. 2 - What is a direct cost? An indirect cost?Ch. 2 - Prob. 8DQCh. 2 - What is allocation?Ch. 2 - Explain how driver tracing works.
Ch. 2 - What is a tangible product?Ch. 2 - Prob. 12DQCh. 2 - Give three examples of product cost definitions....Ch. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Pietro Frozen Foods, Inc., produces frozen pizzas....Ch. 2 - For next year, Pietro predicts that 50,000 units...Ch. 2 - Pietro expects to produce 50,000 units and sell...Ch. 2 - Refer to Cornerstone Exercises 2.2 and 2.3. Next...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Prob. 9ECh. 2 - The following items are associated with a cost...Ch. 2 - Nizam Company produces speaker cabinets. Recently,...Ch. 2 - Three possible product cost definitions were...Ch. 2 - Wyandotte Company provided the following...Ch. 2 - For each of the following independent situations,...Ch. 2 - LeMans Company produces specialty papers at its...Ch. 2 - Kildeer Company makes easels for artists. During...Ch. 2 - Anglin Company, a manufacturing firm, has supplied...Ch. 2 - Lakeesha Barnett owns and operates a package...Ch. 2 - Millennium Pharmaceuticals, Inc. (MPI), designs...Ch. 2 - Jazon Manufacturing produces two different models...Ch. 2 - Ellerson Company provided the following...Ch. 2 - Ellerson Company provided the following...Ch. 2 - Orinder Company provided the following information...Ch. 2 - Last year, Orsen Company produced 25,000 juicers...Ch. 2 - Last year, Orsen Company produced 25,000 juicers...Ch. 2 - The ability to assign a cost directly to a cost...Ch. 2 - Selected information concerning the operations of...Ch. 2 - Brody Company makes industrial cleaning solvents....Ch. 2 - Wright Plastic Products is a small company that...Ch. 2 - The following items are associated with a...Ch. 2 - The actions listed next are associated with either...Ch. 2 - Spencer Company produced 200,000 cases of sports...Ch. 2 - Prob. 33PCh. 2 - Mason, Durant, and Westbrook (MDW) is a tax...Ch. 2 - Orman Company produces neon-colored covers for...Ch. 2 - High drug costs are often in the news. Consumer...
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