3. (TCO A) The following data (in thousands of dollars) have
been taken from the accounting records of Karmana Corporation for the
just-completed year.
Sales
………………………………………………………………..$1,950
Raw materials inventory, beginning
……………………..$50
Raw materials inventory, ending
…………………………..$30
Purchases of raw materials
………………………………….$360
Direct labor
…………………………………………………………$120
Manufacturing overhead
……………………………………$175
Administrative expenses ……………………………………..$100
Selling expenses
………………………………………………….$140
Work-in-process inventory, beginning
…………………$50
Work-in-process inventory, ending ………………………$70
Finished goods inventory, beginning
………………….$200
Finished goods inventory, ending
……………………….$105
Use these data to prepare (in thousands of dollars) a
schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold for
the year. In addition, elaborate on the relationship between these schedules as
they relate to the flow of product costs in a manufacturing company. (Points :
25)
Matuseski Corporation is preparing its cash budget for
October. The budgeted beginning cash balance is $54,000. Budgeted cash receipts
total $127,000 and budgeted cash disbursements total $99,000. The desired
ending cash balance is $100,000. The company can borrow up to $150,000 at any
time from a local bank, with interest not due until the following month.
Required: Prepare the company’s cash budget for October in
good form. Make sure to indicate what borrowing, if any, would be needed to
attain the desired ending cash balance. (Points : 25)
TCO F) The following overhead data are for a department of a
large company.
Actual Costs Incurred
Static Budget
Activity level (in units)
360
340
Variable costs:
Indirect
materials
$4,182
$4,148
Electricity
$2,536
$2,414
Fixed costs:
Administration
$6,540
$6,500
Rent
$6,310
$6,400
Required: Construct a flexible budget performance report
that would be useful in assessing how well costs were controlled in this
department. (Points : 25)
(TCO C) Madlem, Inc.,
produces and sells a single product whose selling price is $280.00 per unit and
whose variable expense is $168.00 per unit. The company’s fixed expense is
$201,600 per month.
Required: Determine the monthly break-even in either unit or
total dollar sales. Show your work! (Points : 25)
TCO B) Wahr Corporation bases its predetermined overhead
rate on the estimated labor hours for the upcoming year. At the beginning of
the most recently completed year, the company estimated the labor hours for the
upcoming year at 35,000. The estimated variable manufacturing overhead was
$7.25 per labor hour and the estimated total fixed manufacturing overhead was
$585,000. The actual labor hours for the year turned out to be 33,000.
Required:
Compute the company’s predetermined overhead rate for the
recently completed year. (Points : 25)
