1. Bisson Furniture uses a process cost system to account for its chair factory. Beginning inventory consisted of 5,000 units (100% complete as to material, 55% complete as to labor) with a cost of $124,800 materials and $104,500 conversion. 58,000 units were started into production during the month with material costs of $1,537,000 and $2,124,375 of conversion costs. The ending inventory of 6,000 chairs was 100% complete as to materials and 40% complete as to labor. Bisson uses weighted-average costing.

Required: (HINT: use 4 decimal places in your calculations) (25 Points)
a. Compute the equivalent units of production for each input.
b. Compute the cost per unit.
c. Compute the cost transferred out to finished goods.
d. Compute the ending work-in-process inventory balance.

 

2. Bisson Furniture uses a process cost system to account for its chair factory. Beginning inventory consisted of 5,000 units (100% complete as to material, 55% complete as to labor) with a cost of $124,800 materials and $104,500 conversion. 58,000 units were started into production during the month with material costs of $1,537,000 and $2,124,375 of conversion costs. The ending inventory of 6,000 chairs was 100% complete as to materials and 40% complete as to labor. Bisson uses first-in, first-out (FIFO) costing.

Required: (HINT: use 4 decimal places in your calculations) (25 Points)
a. Compute the equivalent units of production for each input.
b. Compute the cost per unit.
c. Compute the cost transferred out to finished goods.
d. Compute the ending work-in-process inventory balance.

 

 

 

 

 

 

3. Acme Enterprises has identified the following overhead costs and cost drivers for the coming year:

 

Overhead Item	Cost Driver	Budgeted Cost	Budgeted Activity Level
Quality	Number of inspections	$125,000	2,500
Engineering	Engineering hours	100,000	2,500
Machine setup	Setup hours	90,000	400
Material handling	Number of material moves	85,000	1,000

Budgeted direct labor cost was $200,000 and budgeted direct material cost was $300,000. The following information was collected on three jobs that were completed during the month:

 

Â	Job A	Job B	Job C
Direct materials	$5,000	$2,800	$8,000
Direct labor	$4,000	$4,000	$8,000
Units completed	200	100	300
Number of inspections	20	10	20
Number of material moves	60	20	80
Engineering hours	10	50	10
Number of setups	13	25	18

Required: (25 Points)
a. If the company uses traditional costing and allocates overhead using direct labor cost, how much overhead cost should be assigned to Job A, B, and C?
b. If the company uses activity-based costing (ABC), how much overhead cost should be assigned to Job A, B, and C?Exam II

 

 

 

Bisson Furniture uses a process cost system to account for its chair factory. Beginning inventory consisted of 5,000 units (100% complete as to material, 55% complete as to labor) with a cost of $124,800 materials and $104,500 conversion. 58,000 units were started into production during the month with material costs of $1,537,000 and $2,124,375 of conversion costs. The ending inventory of 6,000 chairs was 100% complete as to materials and 40% complete as to labor. Bisson uses weighted-average costing.

 

Required: (HINT: use 4 decimal places in your calculations) (25 Points)

 

a. Compute the equivalent units of production for each input.

b. Compute the cost per unit.

c. Compute the cost transferred out to finished goods.

d. Compute the ending work-in-process inventory balance. 

 

 

Bisson Furniture uses a process cost system to account for its chair factory. Beginning inventory consisted of 5,000 units (100% complete as to material, 55% complete as to labor) with a cost of $124,800 materials and $104,500 conversion. 58,000 units were started into production during the month with material costs of $1,537,000 and $2,124,375 of conversion costs. The ending inventory of 6,000 chairs was 100% complete as to materials and 40% complete as to labor. Bisson uses first-in, first-out (FIFO) costing.

 

Required: (HINT: use 4 decimal places in your calculations) (25 Points)

 

a. Compute the equivalent units of production for each input.

b. Compute the cost per unit.

c. Compute the cost transferred out to finished goods.

d. Compute the ending work-in-process inventory balance. 

 

 

 

 

 

 

 

Acme Enterprises has identified the following overhead costs and cost drivers for the coming year:

 

 

Overhead Item Cost Driver Budgeted Cost Budgeted Activity Level   

Quality Number of inspections $125,000 2,500   

Engineering Engineering hours 100,000 2,500   

Machine setup Setup hours 90,000 400   

Material handling Number of material moves 85,000 1,000  

 

 

Budgeted direct labor cost was $200,000 and budgeted direct material cost was $300,000. The following information was collected on three jobs that were completed during the month:

 

 

Job A Job B Job C   

Direct materials $5,000 $2,800 $8,000   

Direct labor $4,000 $4,000 $8,000   

Units completed 200 100 300   

Number of inspections 20 10 20   

Number of material moves 60 20 80   

Engineering hours 10 50 10   

Number of setups 13 25 18  

 

 

Required: (25 Points)

 

a. If the company uses traditional costing and allocates overhead using direct labor cost, how much overhead cost should be assigned to Job A, B, and C?

b. If the company uses activity-based costing (ABC), how much overhead cost should be assigned to Job A, B, and C?