MANAGERIAL ACCOUNTING Q1: The Klamath Corp. produces two products, saws and dril
ID: 2400654 • Letter: M
Question
MANAGERIAL ACCOUNTING
Q1:
The Klamath Corp. produces two products, saws and drills. Three activities are used in their manufacture. These activities and their associated costs and bases are as follows:
Activity
Budgeted Costs
Activity Base
$200,000
Machine hours
$400,000
Labor hours
$30,000
Number of setups
Activity Base
Saws
Drills
Total
4,000
6,000
10,000
7,000
13,000
20,000
3
12
15
500
600
a. Determine the activity rate for each activity.
b. Determine the overhead cost per unit for each product. Round your answers to two decimal places, if necessary.
$ per unit
Q2:
Kilbuck Manufacturing operates in a lean manufacturing environment. Kilbuck's actual conversion costs for the month of May follow:
The journal entry to record May's conversion costs will include:
a debit to Raw Materials Inventory
a credit to Work in Process Inventory
a credit to Raw and In Process Inventory
a debit to Raw and In Process Inventory
Q3:
From the above schedule of activity costs, determine the non-value-added costs.
$116,100
$58,200
$234,400
$50,200
Q4:
From the above schedule of activity costs, determine the external failure costs.
$61,700
$89,500
$21,840
$27,300
Q5:
Christmas Express makes wreaths in batch sizes of 15. The cutting & assembly process takes 6 minutes per wreath and the decorating process time is 11 minutes per wreath. It takes 5 minutes to move the wreaths from the cutting & assembly process to the decorating process.
Compute the value-added, non-value-added, and the total lead time of the wreath process.
Compute the value-added ratio. Round to one decimal place.
%
Activity
Budgeted Costs
Activity Base
Stamping$200,000
Machine hours
Assembly$400,000
Labor hours
Setup$30,000
Number of setups
Explanation / Answer
1a)
b)
2)correct option is "D"
Debit to raw and in process inventory [work in process will debited and Factorylabor and overhead account will be credited]
3)correct option is "B" - 58200
non value added activity = 19600+25100+5500+8000=58200
4)correct option is "A" -61700
external failure cost =processing returned product + scrap processing +rework +warranty work
=17500+26000+8400+9800
= 61700
stamping 200000/10000=$ 20 per MH Assembly 400000/20000= $ 20 per DLH set up 30000/15=$ 2000 per set upRelated Questions
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