Entin Corporation reported the following data for the month of January: Beginnin

Question

Entin Corporation reported the following data for the month of January: Beginning Ending Inventories: Raw materials $ 51,000 $ 57,000 Work in process $ 30,000 $ 36,000 Finished goods $ 64,000 $ 66,000 Additional information: Raw materials purchases $ 84,000 Direct labor cost $ 107,000 Manufacturing overhead cost incurred $ 83,000 Indirect materials included in manufacturing overhead cost incurred $ 4,000 Manufacturing overhead cost applied to Work in Process $ 80,000 The cost of goods manufactured for January is: 274,000 255,000 257,000 270,000

Carter Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $154,330. Actual manufacturing overhead for the year amounted to $163,480 and actual machine-hours were 6,260. The company's predetermined overhead rate for the year was $25.30 per machine-hour. The applied manufacturing overhead for the year was closest to: $167,528 $158,378 $154,330 $149,228

In August, one of the processing departments at Knepp Corporation had beginning work in process inventory of $40,000 and ending work in process inventory of $24,500. During the month, $377,000 of costs were added to production. In the department's cost reconciliation report for August, the cost of units transferred out of the department would be: $417,000 $392,500 $368,000 $352,500

In February, one of the processing departments at Whisenhunt Corporation had beginning work in process inventory of $39,000 and ending work in process inventory of $12,200. During the month, the cost of units transferred out from the department was $422,000. In the department's cost reconciliation report for February, the total cost to be accounted for would be: $868,400 $51,200 $829,400 $434,200

James Company has a margin of safety percentage of 19% based on its actual sales. The break-even point is $290,000 and the variable expenses are 46% of sales. Given this information, the actual profit is (Do not round your intermediate calculations. Round your final answer to the nearest dollar amount.): $25,346 $29,754 $36,733 $30,254

Explanation / Answer

a)

b)

Applied Manufacturing overhead

= Actual Number of hours x predetermined overhead rate

= 6260 hours x $25.30/hour

= $158378

c)

Cost of units transferred

= Cost of beginning WIP + Cost added during the month - Cost of ending WIP

= $40000 + $377000 - $24500

= $392500

d)

In the department's cost reconciliation report for February, the total cost to be accounted for would be

= Cost of the units transferred + Cost of ending WIP

= $422000 + $12200

= $434200

e)

Variable cost = 46% of sales

Therefore contribution = (100 - 46)% = 54% of sales

At BEP, contribution = fixed cost

Therefore fixed cost = 54% of 290000 = $156600

Margin of safety = 19%

Threfore BEP sales = (100-19)% = 81% of actual sales

BEP sales = $290000

Actual Sales = 290000 / 81% = $ 358025

Contribution = 54% of 358025 = $193333

Profit = contribution - fixed cost = $193333 - 156600 = $36733

Items of expenses $ $ Beginning inventory of raw materials 51000 Add: Purchase 84000 Available for production 135000 Less: Indirect material issued to production 4000    131000 Less: Ending inventory of raw materials 57000 Raw material applied to production 74000 Direct Labour Cost 107000 Manufacturing overhead cost applied 80000 Cost of manufacture 261000 Add: Beginning WIP 30000 291000 Less: Ending WIP 36000    Cost of Goods Manufactured 255000

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