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Submitted by jenyo2 on Mon, 2012-04-09 14:46
due on Mon, 2012-04-09 21:00
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Kingsport Containers, Ltd, of the Bahamas experiences wide variation in demand for the 200-liter steel drums it fabricates. The leakproof,...

Kingsport Containers, Ltd, of the Bahamas experiences wide variation in demand for the 200-liter steel drums it fabricates. The leakproof, rustproof steel drums have a variety of uses from storing liquids and bulk materials to serving as makeshift musical instruments. The drums are made to order and are painted according to the customer's specifications—often in bright patterns and de-signs. The company is well known for the artwork that appears on its drums. Unit product costs are computed on a quarterly basis by dividing each quarter's manufacturing costs (materials, labor, and overhead) by the quarter's production in units. The company's estimated costs, by quarter, for the coming year follow:

Quarter Direct materials \$240,000 Direct labor Manufacturing overhead Total manufacturing costs \$668,000 Number of units to be produced. Estimated unit product cost. . . .

First Second Third Fourth \$240,000 128,000 300,000 \$120,000 64,000 220,000 \$60,000 32,000 1 80,000 \$180,000 96,000 260,000 \$668,000 \$404,000 \$272,000 \$536,000 80,000 \$8.35 40,000 \$10.10 20,000 \$13.60 60,000 \$8.93 Management finds the variation in unit costs confusing and difficult to work with. It has been sug¬gested that the problem lies with manufacturing overhead because it is the largest element of cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing over¬head cost to units of product. After some analysis, you have determined that the company's overhead costs are mostly fixed and therefore show little sensitivity to changes in the level of production. Required: 1. The company uses a job-order costing system. How would you recommend that manufactur¬ ing overhead cost be assigned to production? Be specific, and show computations. 2. Recompute the company's unit product costs in accordance with your recommendations in (1) above.

Submitted by Asma on Mon, 2012-04-09 16:16
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Please xxxx attached guided xxxxxxxx for you. xxxx is xxx xxxx question with different figures.Just xxxxxx xxx procedure and xxxxx xxxx xxxxxxxx

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Submitted by Asma on Tue, 2012-04-10 04:48
teacher rated 374 times
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xxxxxx find xxxxxxxx file for xxxxxxx figures.Thanks

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Quarter

First xxxxxx Third Fourth

xxxxxx xxxxxxxxx x . x x x x x x x . x x xxxxxxxx xxxxxxxx \$60,000 \$180,000 xxxxxxxxx unit product xxxx . x . xxxxxx \$10.10 \$13.60 \$8.93

Direct xxxxxx . . . . . . x x x x . x . x x .128,000 64,000 xxxxxx 96,000

Manufacturing overhead . x . x . . 300,000 220,000 xxxxxxx xxxxxxxx

Total manufacturing costs x . . x xxxxxxxx \$404,000 \$272,000 \$536,000

Number xx units xx be produced x xxxxxx xxxxxx xxxxxx xxxxxxx

Required:

1. How xxxxx xxx xxxxxxxxx that manufacturing overhead xxxx xx xxxxxxxx to xxxxxxxxxxx xx xxxxxxxxx xxx xxxx computations.

Solution:

xxx a pre-determined rate xxxxx xx xxxxxx volume xxxxxxx xxxxxx DL\$. xxxxx

xxx xxxx xxxxx xxxxxxxxxxxxx overhead xxxxxx volume xxxxxxx

(MOH xxxx based xx units xx a measure xx xxxxxxxx

MOH Rate x xxxxxxxxxxx xxxxxx xxxxxxxx / 200,000 xxxxxx

xxx Rate x xxxxx Manufacturing xxxxxxxx yearly xxxxxx xxxxxx

(MOH xxxx based on xxx as x xxxxxxx of volume?)

MOH xxxx - TMOH/Yearly xxxxxx xxxxxxxx / xxxxxxx \$3.00

xxx xxxx = Total Manufacturing Overhead Yearly Volume xxxxxx

xxxx Rate xxxxx xx DM x as x measure of xxxxxxxx

MOH xxxx x xxxxxxxxxxx xxxxxx \$960,000 x xxxxxxx \$1.60

2. Re-compute xxx company's unit product costs xx xxxxxxxxxx xxxx your recommendations in xxx above:

xxxxxxx

xxxxxxxx xxxxx xxxxx xxxxxx xxxxx xxxxxxx

xxxxxx Materials xxxxxxxx \$120,000 xxxxxxx \$180,000

xxxxxx labor xxxxxxx xxxxxx 32,000 xxxxxx

Prime Cost xxxxxxx 184,000 92,000 xxxxxxxx

MOH 300,000 xxxxxxx 180,000 xxxxxxx

Total MC 668,000 404,000 272,000 xxxxxxxx

xxxxxx xx units to xx

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