Ciolino Co.’s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $500,000, and factory payroll cost in April is $363,000. Overhead costs incurred in April are

Ciolino Co.’s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $500,000, and factory payroll cost in April is $363,000. Overhead costs incurred in April are: indirect materials, $50,000; indirect labor, $23,000; factory rent, $32,000; factory utilities, $19,000; and factory equipment depreciation, $51,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $635,000 cash in April. Costs of the three jobs worked on in April follow.

	Job 306				Job 307				Job 308
Balances on March 31
Direct materials		$	29,000			$	35,000
Direct labor			20,000				18,000
Applied overhead			10,000				9,000
Costs during April
Direct materials			135,000				220,000			$	100,000
Direct labor			85,000				150,000				105,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process

Required:

1.

Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).   a. Materials purchases (on credit), factory payroll (paid in cash), and actual overhead costs including indirect materials and indirect labor. (Factory rent and utilities are paid in cash.) b. Assignment of direct materials, direct labor, and applied overhead costs to the Goods in Process Inventory. c. Transfer of Jobs 306 and 307 to the Finished Goods Inventory. d. Cost of goods sold for Job 306. e. Revenue from the sale of Job 306. f. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)    2. Prepare journal entries for the month of April to record the above transactions.   Explanation: c. Finished goods inventory ($321,500 + $507,000) = $828,500 f. Factory Overhead   Overhead applied to jobs $ 170,000   Overhead incurred   Indirect materials $ 50,000   Indirect labor 23,000   Factory rent 32,000   Factory utilities 19,000   Factory equip. depreciation. 51,000 175,000   Underapplied overhead $ 5,000

3. Prepare a manufacturing statement for April (use a single line presentation for direct materials and show the details of overhead cost).  4.1 Compute gross profit for April.   4.2 Show how to present the inventories on the April 30 balance sheet. Explanation: Presentation of inventories on the April 30 balance sheet      Beginning raw materials inventory $   80,000   Purchases 500,000   Direct materials used (455,000 )   Indirect materials used (50,000 )      Ending raw materials inventory $ 75,000

The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system.

The following information is available for Lock-Safe Company, which produces special-order security products and uses a job order cost accounting system.

   

	April 30		May 31
Inventories
Raw materials	$	42,000	$	49,000
Goods in process		10,400		18,500
Finished goods		65,000		33,000
Activities and information for May
Raw materials purchases (paid with cash)				187,000
Factory payroll (paid with cash)				400,000
Factory overhead
Indirect materials				12,000
Indirect labor				79,000
Other overhead costs				103,500
Sales (received in cash)				1,260,000
Predetermined overhead rate based on direct labor cost				50	%

  
Determine whether there is over or underapplied overhead using T-accounts.

 

Explanation:

Cost of direct labor used
Total factory payroll	$	400,000
Less indirect labor		(79,000)
Cost of direct labor used	$	321,000

  

Factory overhead: $321,000 × 50% = $160,500.

   

Indirect materials	$	12,000
Indirect labor		79,000
Other overhead costs		103,500
Total actual overhead incurred		194,500
Overhead applied		160,500
Overapplied overhead	$	34,000

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In 2012, Hadicke Company had a break-even point of $350,000 based on a selling price of $7 per unit and fixed costs of $105,000. In 2013, the selling price and the variable cost per unit did not change, but the break-even point increased to $420,000.

In 2012, Hadicke Company had a break-even point of $350,000 based on a selling price of $7 per unit and fixed costs of $105,000. In 2013, the selling price and the variable cost per unit did not change, but the break-even point increased to $420,000.

Compute the variable cost per unit and the contribution margin ratio for 2012. Variable cost per unit $ Contribution margin ratio %

Compute the increase in fixed costs for 2013. $

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Question 2 In the month of June, Barbara's Beauty Salon gave 2,700 haircuts, shampoos, and permanents at an average price of $30. During the month, fixed costs were $18,000 and variable costs were 70% of sales. Determine the contribution margin in dollars, per unit, and as a ratio. Contribution margin (in dollars) $ Contribution margin per unit $ Contribution margin ratio % Using the contribution margin technique, compute the break-even point in dollars and in units. Break-even point (in dollars) $ Break-even point (in units) units Compute the margin of safety in dollars and as a ratio. (Round answers to 0 decimal places, e.g. 125.) Margin of safety (in dollars) $ Margin of safety (ratio) %

Question 2 In the month of June, Barbara's Beauty Salon gave 2,700 haircuts, shampoos, and permanents at an average price of $30. During the month, fixed costs were $18,000 and variable costs were 70% of sales.

Determine the contribution margin in dollars, per unit, and as a ratio. Contribution margin (in dollars) $ Contribution margin per unit $ Contribution margin ratio %

Using the contribution margin technique, compute the break-even point in dollars and in units. Break-even point (in dollars) $ Break-even point (in units) units

Compute the margin of safety in dollars and as a ratio. (Round answers to 0 decimal places, e.g. 125.) Margin of safety (in dollars) $ Margin of safety (ratio) %

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Black Brothers Furniture Corporation incurred the following costs. Instructions Identify the costs above as variable, fixed, or mixed.

Black Brothers Furniture Corporation incurred the following costs.

Instructions

Identify the costs above as variable, fixed, or mixed.

1.	Wood used in the production of furniture.
2.	Fuel used in delivery trucks.
3.	Straight-line depreciation on factory building.
4.	Screws used in the production of furniture.
5.	Sales staff salaries.
6.	Sales commissions.
7.	Property taxes.
8.	Insurance on buildings.
9.	Hourly wages of furniture craftsmen.
10.	Salaries of factory supervisors.
11.	Utilities expense.
12.	Telephone bill.

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Santo Birch opens a Web consulting business called Show-Me-the-Money and completes the following transactions in its first month of operations.

Problem 2-4A Preparing and posting journal entries; preparing a trial balance L.O. C3, C4, A1, P1, P2

Santo Birch opens a Web consulting business called Show-Me-the-Money and completes the following transactions in its first month of operations.

    

March 1	Birch invests $95,000 cash along with office equipment valued at $22,800 in the  company in exchange for common stock.
2	The company prepaid $7,200 cash for twelve months' rent for office space. (Hint: Debit Prepaid Rent for $7,200.)
3	The company made credit purchases for $11,400 in office equipment and $2,280 in office supplies. Payment is due within 10 days.
6	The company completed services for a client and immediately received $2,000  cash.
9	The company completed a $7,600 project for a client, who must pay within 30 days.
13	The company paid $13,680 cash to settle the account payable created on March 3.
19	The company paid $6,000 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $6,000.)
22	The company received $6,080 cash as partial payment for the work completed on March  9.
25	The company completed work for another client for $2,640 on credit.
29	The company paid $6,200 cash for dividends.
30	The company purchased $760 of additional office supplies on credit.
31	The company paid $700 cash for this month's utility bill.

     

Required:
1.	Record these transactions using the following titles: Cash, Accounts Receivable, Office Supplies, Prepaid Insurance, Prepaid Rent, Office Equipment, Accounts Payable, Common stock, Dividends, Services Revenue, and Utilities Expense. (Omit the "$" sign in your response.)

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