Chapter 19Working Papers COST CONCEPTS AND COST ALLOCATION

Chapter 19, SE 1. 1. 2. 3. Chapter 19, SE 2.

Ch19 SE1 to SE2

Chapter 19, SE 3. Materials Inventory, ending balance:

Work in Process Inventory, ending balance:

Finished Goods Inventory, ending balance:

Chapter 19, SE 4. 1. 2. 3. 4. 5. 6. 7.

Ch19 SE3 to SE4

Chapter 19, SE 5. 1. 2. 3. 4. 5. 6. 7. Chapter 19, SE 6. Product unit cost computed:

Prime costs and conversion costs per unit computed: Prime Costs Conversion Costs

Chapter 19, SE 7.

Ch19 SE5 to SE7

Chapter 19, SE 8. Predetermined Overhead = Total Estimated Overhead Costs Rate per Service Request Total Estimated Service Requests = = Chapter 19, SE 9. Overhead Costs Applied = x

service requests per service request

Ch19 SE8 to SE9

Chapter 19, E 1. 1. 2. 3. 4. Chapter 19, E 2. Cost Classification Variable Value-adding or or Fixed Nonvalue-adding Variable Value-adding

Product or Period Example: Bicycle tire 1. 2. 3. 4. 5. Product

Direct or Indirect Direct

Chapter 19, E 3. 1. 2. 3.

Ch19 E1 to E3

Chapter 19, E 4. Radio Company Statement of Cost of Goods Manufactured For the Month of August

Ch19 E4

Chapter 19, E 5. Oak Division Direct materials used Direct labor Overhead Total manufacturing costs Beginning work in process inventory Ending work in process inventory Cost of goods manufactured Beginning finished goods inventory Ending finished goods inventory Cost of goods sold Chapter 19, E 6. 1. 2. 3. 4. 5. 6. 7. 8. 9. Chapter 19, E 7. 1. 2. 3. $ 3 (a) 1 $ 4 2 Loblolly Division $ 7 6 3 (d) (e) Maple Division (g) 4 2 (h) 3 ( 2) $1 5 (i) $6 ( Spruce Division $ 8 4 (j) $14 (k) 5) (l) 7 ( 9) ($ 2)

(b) ( 3) $ 6 ($3) 3 (f) ( 2) ( 6) (c) ($9)

Ch19 E5 to E7

Chapter 19, E 8. 1. Missing data for the retail organization calculated.

First Quarter:

Second Quarter:

Ch19 E8

Chapter 19, E 8. Third Quarter:

Fourth Quarter:

Ch19 E8 (2)

Chapter 19, E 8. 2. Missing data for the manufacturing organization calculated. First Quarter:

Second Quarter:

Ch19 E8 (3)

Chapter 19, E 8. Third Quarter:

Fourth Quarter:

Ch19 E8 (4)

Chapter 19, E 9. Memo Date: To: From: Topic: Iggy Paulo Reza Seca Purpose of Source Documents

Chapter 19, E 10. 1. 2. 3. 4. 5. 6. 7.

Ch19 E9 to E10

Chapter 19, E 11. 1. Unit cost computed. Total Cost Unit Cost ( Total 10,550 )

Cost Items

2.

Recommendation made.

3.

Prime costs and conversion costs per unit computed. Prime Costs Conversion Costs

Ch19 E11

Chapter 19, E 12.

Ch19 E12

Chapter 19, E 13. 1 and 2. Past year's and next year's predetermined overhead rates computed. (1) Past Year (2) Next Year's Percentage (3) Next Year (1 2)

Ch19 E13

Chapter 19, E 14. 1. Anticipated overhead determined.

2. Overhead rate computed.

3. Overhead applied.

Chapter 19, E 15. 1. Overhead applied to operations computed.

2. Overapplied overhead computed.

3. Effect of overapplied overhead on Cost of Goods Sold determined.

Ch19 E14 to E15

Chapter 19, C 6. 1. Accounts in manufacturing and retail organizations identified. a.

b.

2. Key figures calculated.

Gross Margin = a. = = Cost of Goods Sold = b. = = Cost of Goods Available for Sale = c. = = Cost of Goods = Manufactured d. = =

+ +

+ +

3. Manager insight: Use of inventory method discussed.

Ch19 P1

Chapter 19, P 2. 1 and 2. Department 60:

Department 61:

Total unit cost 3. Manager insight: Analysis of the Milo Company order.

Ch19 P2

Chapter 19, P 2. 4. Prime costs and conversion costs per unit computed. Department 60 Prime Costs Conversion Costs Department 61 Prime Costs Conversion Costs

Ch19 P2 (2)

Chapter 19, P 3. 1. Predetermined overhead rate computed. Natural Cosmetics Company Overhead Rate Computation Schedule For this Year (1) (3) (2) Projected Projection Percentage This Year Increase (1 2)

Overhead Cost Item

Last Year

Predetermined overhead rate for this year: per machine hour *Rounded.

Ch19 P3

Chapter 19, P 3. 2. Amount of applied overhead determined Machine Hours Predetermined Overhead Rate Overhead Applied*

Job No.

* Rounded.

3. Computation and adjustment of overapplied overhead.

Ch19 P3 (2)

Chapter 19, P 4. 1. Total costs assigned to the Grater order. Traditional Costing Method

Ch19 P4

Chapter 19, P 4. 2. Manager insight: Cost difference discussed.

Ch19 P4 (2)

Chapter 19, P 5.

Ch19 P5

Chapter 19, P 6. 1. Cost per patient day computed.

2 and 3.

Billing per patient day computed. 2. Normal Billing 3. Industry Average * Billing Approach

Cost

4. Billing procedure recommended.

Ch19 P6

Chapter 19, P 7. 1. Predetermined overhead rate computed.

Ch19 P7

Chapter 19, P 7. 2. Amount of applied overhead determined. Actual Machine Hours Overhead Applied*

Job No.

Rate

*Rounded. 3. Computation and adjustment of underapplied overhead.

4. Overhead rate discussed.

Ch19 P7(2)

Chapter 19, P 8. 1. Total costs assigned to the Kent order. Traditional Costing Method

Ch19 P8

Chapter 19, P 8. 2. Manager insight: Cost differences discussed.

Ch19 P8 (2)

Chapter 19, C 1.

Sample Costs

Traceability to Product

Cost Behavior

Value Attribute

Ch19 C1

Chapter 19, C 2. 1. a.

b.

c.

d. 2.

Ch19 C2

Chapter 19, C 2.

3. a. b. c. d.

e.

Ch19 C2 (2)

Chapter 19, C 3. 1. Ratios computed.

a. Ratios of cost of direct materials used, direct labor, and total overhead to total manufacturing costs. This Year Amount Ratio Last Year Amount Ratio

b. Ratios of sales salaries and commission expense, advertising expense, other selling expenses, administrative expenses, and total selling and administrative expenses to sales. This Year Amount Ratio Last Year Amount Ratio

c. Ratios of gross margin and net income to sales. This Year Amount Ratio Last Year Amount Ratio

Ch19 C3

Chapter 19, C 3. 2. Comments on ratios. a.

b.

c.

3. Other factors and ratios suggested.

Ch19 C3 (2)

Chapter 19, C 4. 1. Statement of cost of goods manufactured and income statement prepared.

Ch19 C4

Chapter 19, C 5. 2.

3. a. b. c. d.

4.

a. b. c. d. e.

Ch19 C4 (2)

Chapter 19, C 5.

Ch19 C5

Chapter 19, C 6.

Ch19 C6