Week 2 Activity
# 31 Comprehensive Job Costing
Moody Blues Chocolate Factory uses job costing to cost its products. In the first quarter of operations, the company incurred the following material and labor costs in a manufacturing a batch of its chocolate candies (the company uses normal costing to apply overhead to products and uses machine hours as the cost driver).
| Materials Data: Direct material purchases Direct materials used in production (cost) | $ 100,000 85,000 |
| Labor Data: Direct Labor costs | $ 60,000 |
| Manufacturing Overhead Data: Overhead application rate per machine hour Machine Hour used | 9.00 10,000 |
| Inventory Data: Transferred to Finished Goods Cost of Goods sold during the quarter | 210,000 190,000 |
Required:
- Calculate the direct materials ending inventory
- Calculate the work in progress ending inventory
- Calculate the finished goods ending inventory
Finished Goods Ending Inventory = $20,000
- At the end of the quarter, Moody Blues’ actual manufacturing overhead costs totalled $80,000. Calculate the over or underapplied overhead for the period.
# 37 Process Costing Using FIFO Method
Riley’s Paper Company manufactures computer paper for laser printers. The following information is related to production costs incurred in the manufacturing process during the month of March:
| Reams of Paper | Production Costs | |
| Beginning Work in Progress (40% complete) | 35,000 | 89,170 |
| Current Period Production | 93,000 | 394,830 |
| Ending Work in Progress (65% complete) | 20,000 |
The company uses FIFO method of computing equivalent units and assigning product costs. Production costs include both the cost of raw materials and conversion costs that are incurred uniformly in the production process.
Required:
- How many reams of paper were completed in March?
- Of the reams of paper completed in March, how many were started and completed during the month?
- How many equivalent finished units did the company complete in March?
- What is the cost per equivalent unit?
- Calculate the cost of ending work in progress inventory and the cost of goods manufactured in March.
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