07 Jun Question Part I…….Given the following informatio
Question
Part I…….Given the following information, prepare a cost of production report for Department B for July. [70 points]
Johnstone Chemicals manufactures its products in two departments [A and B]. Data for Department B is listed below:
Units transferred from Department A……………………………..40,000
Per unit cost……………………………………………………………….$3.20
Units transferred to finished goods………………………………..26,000
Units still in process [1/3 complete]…………………………………6000
Costs added by Department B:
Labor…………………………………………………………………….$31,500
Factory overhead……………………………………………………..$23,100
All lost units are considered to be normal.
Part II……Determine the factory overhead rates. Round money to the nearest cent and rates to the nearest percent. Label your answers. [30 points]
The XYZ Co. estimates its factory overhead for the year to be $58,000. They further estimate they will produce 38,000 units at a material cost of $48,000. Production will require 20,000 direct labor hours at an estimated cost of $100,000. Machines will work 1500 hours.
Find the following predetermined rates:
•material cost
•per unit cost
•machine hour cost
•direct labor cost
•direct labor hour cost
Part III…………..[25 points]
Answer the following questions.
1. What is the purpose of equivalent units? How do they differ from good units?
2. Explain the use of a quantity schedule. Who gives us the information regarding the percentage of units completed in a department?
3. How do applied factory overhead rates differ from applied factory overhead itself?
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