P 8-3

1) Jana
Sales $250,000
Cost of Goods Sold:
Joint cost ($236,000 - Bynd net Revenue
($11,000 - $5,000 separable cost))
Separable cost ($215,000 - $5,000 for Bynd)
Total cost
Gross profit (20% of sales)

2) Total
Ultimate sales value $550,000
Less 20% gross profit 110.000
Total Cost $440,000
Separable cost 210.000
Joint cost allocation $230,000

3) Gross profit
Jana : $50,000
Reta : $60,000
*20% × Sales
 Reta Total
$300,000 $550,000

$230,000
210.000 210.000
$440,000
$110,000

Jana Reta
$250,000 $300,000
50.000 60.000
$200,000 $240,000
210.000
$200,000 $ 30,000
P9 - 3
1) Normal use per day (200) × days of lead time (10) 2.000 Units
Safety stock 300
Order point 2.300 Units

2) Order point 2.300 Units

Normal use during lead time (200 × 10) 2.000
On hand at time order received 300 Units
Quantity ordered 4.000
Absolute maximum inventory 4.300 Units

3) Order point 2.300 Units

Normal use during lead time (150 × 10) 1.500
On hand at time order received 800
Quantity ordered 4.000
Absolute maximum inventory 4.800 Units

4) Let S equal cost of storing one unit of the year.

𝐸𝑂𝑄 = √((2 ×𝑅𝑈 ×𝐶𝑂)/(𝐶𝑈 ×𝐶𝐶))

4,000= √((2 ×(200 ×250)×$80)/𝑆)

4,000= √(8,000,000/𝑆)

16,000,000= 8,000,000/𝑆

𝑆 = 8,000,000/16,000,000 =$.50
 P 10 - 2
(Appendix) 1) Charge to work-in-process:
Normal working hours = 40 × 2 = 80 Hours
X = overtime hours
𝐗 = ($𝟏,𝟏𝟒𝟎.𝟎𝟎 −(𝟖𝟎×$𝟏𝟐))/
(($𝟏𝟐×𝟏.𝟓))
𝐗 =𝟏𝟎 𝐇𝐨𝐮𝐫�

So, Charge to work in process = 90 × $12 = $1,080

2) Factory overhead charge for Employee #1071:

Company benefits paid by employer $273.20
Overtime premium 60
$333.20

3) The cost of idleness should be charged to the departmental factory overhead account.
 ($1,140 - $1,080)

ntal factory overhead account.

P 11 - 5 Applied)
1)
Total cost of job 50:
Work in process, December 1 $ 54,000
December costs:
Materials 45.000
Direct Labor (($102,000 ÷ 8,500) × 3,500) 42.000
FOH ($4.50 × 3,500) 15.750
$156,750

2) FOH costs applied to Job 52 during December:

$4.50 × 2,000 = $9,000

3) Total FOH applied during December:

$4.50 × 8,500 = $38,250

4) Actual December FOH incurred:

Supplies $ 3,500
Indirect labor wages 15.000
Supervisor salaries 6.000
Building occupancy costs 3.500
Factory equipment costs 8.000
Other factory costs 5.000
$39,000

5) An insignificant amount of over- or underapplied factory overhead would be treated as a period

6) Actual overhead $39,000

Applied overhead 38.250
Underapplied overhead $ 750
d be treated as a period cost.
P 13 - 2 FOH Departementalisasi

1)

Repair
Departement costs $48,000
Allocation of service departement costs:
Repair(1/9, 8/9) -48.000
Power (7/8, 1/8)
Total overhead cost
Direct labor hours
overhead rate per direct labor hour

3)

Allocating service department costs to

producing departments only ignores any
service rendered by one service department
to another, while the simultaneous method
recognizes service departments’ support to
one another through the use of
simultaneous equations. The latter method
is more complete and should lead to results
of greater use to management.
 2) Algebraic calculation:
Departements R = Repair Departement
Power Molding Assembly P = Power Departement
$250,000 $200,000 $320,000

5.333 42.667 Subtituting:

-250.000 218.750 31.250 Solving:
$424,083 $399,917
40.000 160.000
$10.60 $2.46
Subtituting:

R = $48,000 + .20P
P = $250,000 + .10R
R = $48,000 + .20($250,000 + .10R)
R = $48,000 + $50,000 + .02R
.98R = $98,000
R = $100,000
P = $250,000 + .10($100,000)
P = $260,000
Departement costs
Allocation of service departement costs:
Repair(1/10, 1/10, 8/9)
Power (2/10, 7/10, 1/10)
Total overhead cost
Direct labor hours
overhead rate per direct labor hour
 Departements
Repair Power Molding Assembly
$48,000 $250,000 $200,000 $320,000

-100.000 10.000 10.000 80.000

52.000 -260.000 182.000 26.000
$392,000 $426,000
40.000 160.000
$9.80 $2.66
P 13 -1
1) FOH rates in the existing costing system = $23 per machine hour,
and $14 per direct labor hour
Computation:
($92,000 of machine−related overhead

($280,000 of remaining overhead c

2) Making only the changes suggested by the study, the structure of the ABC system would be:

The study did not suggest any change for machine operation cost, nor for the “other overhead” c

3) The ABC system's overhead rates

computation:

($65,000 of machine operation overhead

($27,000 of machine−setup opera

($35,000 of other materials−related co

($215,000 of "other overhead")/(20

$92,000 of machine−related overhead)/(4,000 machine hours)=$23 per machine hour

($280,000 of remaining overhead costs)/(20,000 DLH)=$14 per direct labor hour

ructure of the ABC system would be:

Pool Driver
machine operation machine hours
setup and material handing setups
other materials-related overhead purchase orders
all remaining overhead direct labor hours

ation cost, nor for the “other overhead” category.

$65,000 of machine operation overhead)/(4,000 machine hours)=$16.25 per machine hour

($27,000 of machine−setup operation overhead+$30,000 of materials handling overhead)/(1,000 setups)=$57 per

$35,000 of other materials−related cost)/(700 purchase orders)=$50 per purchase order

($215,000 of "other overhead")/(20,000 DLH)=$10.75 per direct labor hour

000 setups)=$57 per setup