EXAM #3 Exam #3 has three parts. Part I.......Given the following information, p

ID: 2460620 • Letter: E

Question

EXAM #3 Exam #3 has three parts. Part I.......Given the following information, prepare a cost of production report for Department B for July. [70 points] Johnstone Chemicals manufactures its products in two departments [A and B]. Data for Department B is listed below: Units transferred from Department A...................................40,000 Per unit cost.........................................................................$3.20 Units transferred to finished goods......................................26,000 Units still in process [1/3 complete].......................................6000 Costs added by Department B: Labor...............................................................................$31,500 Factory overhead..............................................................$23,100 All lost units are considered to be normal. Don't forget our per unit rounding rule. Part II......Determine the factory overhead rates. Round money to the nearest cent and rates to the nearest percent. Label your answers. [30 points] The XYZ Co. estimates its factory overhead for the year to be $58,000. They further estimate they will produce 38,000 units at a material cost of $48,000. Production will require 20,000 direct labor hours at an estimated cost of $100,000. Machines will work 1500 hours. Find the following predetermined rates: material cost per unit cost machine hour cost direct labor cost direct labor hour cost

Explanation / Answer

Calculation of predetermined rates:

Total Estimated Material Cost (A)

$ 48,000

Estimated Units produced (B)

38000

Material cost per unit = A/B =

$ 1.26

Total Estimated factory overhead (C)

$ 58,000

Estimated Machine hours (D)

1500

Machine hour Cost = C/D =

$ 38.67

Total Estimated Direct Labor Cost (E)

$ 100,000

Estimated direct labor hours (F)

20000

Direct labor hour cost = E/F =

$ 5.00