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Comp Problem # 2
Student: ___________________________________________________________________________ Problem 1 and 2 are from Chapter 8- Pick One
1. Dickerson Company uses a process costing system. The following information relates to one month’s
activity in the company’s Mixing Department.
Units Conversion Percent
Complete Beginning work-inprocess inventory 10,00
0 20% Units started 21,00
0 Units completed and
transferred out 26,00
0 Ending work-in-process
inventory 5,000 80% The conversion cost of the beginning inventory was \$6,500. During the month, \$112,000 in additional
conversion cost was incurred.
Required:
a. Assume that the company uses the FIFO method. Compute:
1.
2.
3.
4. The
The
The
The equivalent units of production for conversion for the month.
cost per equivalent unit for conversion for the month.
total cost transferred out during the month.
cost assigned to the ending work-in-process inventory. b. Assume that the company uses the weighted-average cost method. Compute:
1.
2.
3.
4. The
The
The
The equivalent units of production for conversion for the month.
cost per equivalent unit for conversion for the month.
total cost transferred out during the month.
cost assigned to the ending work-in-process inventory. 2. The following data has been provided by Radiotronics Inc., a company that uses the FIFO method in its
process costing system. The data concern the company’s Wiring Department for the month of March.
Cost in beginning work-in-process inventory
Units started and completed this month Cost per equivalent unit
Equivalent units required to
complete the units in beginning
work-in-process inventory
Equivalent units in ending work-inprocess inventory \$2,260
4,650 Materia
ls Conversi
on \$33.30 \$21.20 300 230 380 297 Required:
Determine the cost of ending work-in-process inventory and the cost of the units transferred out of
the department during March using the FIFO method. Problem 3 and 4 are from chapter 9 pick one 3. Matchbox Manufacturing has a traditional costing system in which it applies manufacturing overhead
to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company
has two products, Utility and Super, about which it has provided the following data:
Utility Super Direct materials per unit \$34.10 \$52.70 Direct labor per unit \$16.10 \$39.10 Direct labor-hours per unit
Annual production 0.70 1.70 30,000 10,000 The company’s estimated total manufacturing overhead for the year is \$1,527,600 and the company’s
estimated total direct labor-hours for the year is 38,000.
The company is considering using a variation of activity-based costing to determine its unit product
costs for external reports. Data for this proposed activity-based costing system appear below:
Activities and Activity
Cost Assembling products (DLHs) \$608,000 Preparing batches (batches) 197,600 Axial milling (MHs) 722,000 Total \$1,527,600
Utility Super Total 21,000 17,000 38,000 Preparing batches 456 1,520 1,976 Axial milling 570 874 1,444 Assembling products Required:
a. Determine the manufacturing overhead cost per unit of each of the company’s two products under
b. Determine the manufacturing overhead cost per unit of each of the company’s two products under
activity-based costing system. 4. The manager of the Personnel Department at King Enterprises has been reading about time-driven
ABC and wants to apply it to her department. She has identified four basic activities where her
employees spend the most time: Interviewing; Hiring, Assessment, and Separation Processing. The
Department employs five staff who perform these activities. The manager provides the following
estimates for the amount of time it takes to complete each of these activities:

• Interviewing: 40 minutes;
Hiring: 60 minutes;
Assessment: 85 minutes;
Separation processing: 95 minutes. Employees in Personnel work 35 hour weeks with four weeks for vacation. Of the 35 hours, five are
reserved for administrative tasks, training, and so on. The costs of the personnel department,
including any allocated costs from other staff functions is \$1,404,000. During the year, Personnel