Calculate the amount of overhead applied to work-in-process during the year. Compute the overhead variance. Was it favorable or unfavorable and why? | Quick Homework Help

Instructions for the assignment:

Clearly identify the answer to each question. You may want to use Excel for any questions requiring calculations. Copy and paste the material from Excel into your Word doc as a picture.

Question No. 1

Gem Potato Processors produces three products: fries, nuggets and crunchy peels. They are all made from cull potatoes they purchase from sorting sheds. Follow is information about each product.

Joint Costs before Split-off Point is $200,000.

Required:

1. Allocate the joint costs using the NRV method.
2. Allocate the joint costs using the physical units method.
3. What is the other acceptable method used to allocate joint costs?
4. Which is the best method and why?

Question No. 2

Community Recovery Clinic offers two types of services: inpatient and outpatient. They have two types of service departments: administration and housekeeping. Direct costs of nursing care and supplies can be traced directly to the patient.

Administration is allocated based on number of employees and housekeeping is based on square footage. Carry out calculations to four decimal places.

Required:

1. Allocate service department costs using the direct method.
2. Allocate service department costs using the reciprocal method.
3. What is the other method of allocation?
4. Briefly discuss the pros and cons of each method and select the best one.

Question No. 3

Tots Toys Inc. manufactures a wooden model wagon. The departments are cutting, assembly and painting. Following is the information for the assembly department for the month of September 2013.

Question No. 4

Central Redi-Mix Concrete, Inc. applies manufacturing overhead based on number of yards of concrete produced. At the beginning of 2014 management estimated the plant would produce 100,000 yards of concrete during the coming year. At the same time manufacturing overhead was budgeted to be $500,000. At the end of the year the firm had produced 110,000 yards of concrete and incurred $550,000 of manufacturing overhead.

Required:

1. Compute the overhead application rate for 2014.
2. Calculate the amount of overhead applied to work-in-process during the year.
3. Compute the overhead variance. Was it favorable or unfavorable and why?
4. Explain why we use a predetermined rate to apply manufacturing overhead to work-in-process versus the way a company accounts for direct labor and direct material.

Question No. 5

Pacific Sports, Inc. makes surf boards. Following are inventory and cost figures relative to the year ended June 30 2013:

Question No. 6

Summer Fun Products makes a large beach umbrella. It consists of a canvas top that is sewn together from precut pieces plus a wood pole and arch structure. Below is information relative to the canvas process for the month of June 2014.

During the month of June, the firm made 12,000 umbrellas. They paid $57,600 in direct labor for 1800 hours of labor. They actually purchased 3,500 yards of material for $15,995. Actual variable overhead was $4,500. They actually used 3200 yards of material.

Question No. 7