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ACC349 WEEK 2 E2-12 BE3-5 BE3-6 E3-10

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Prepare written responses to the following assignments from Managerial Accounting: Tools for Business Decision Making:

• Ch. 2 - E2-12
• Ch. 3 - BE3-5
• Ch. 3 - BE3-6
• Ch. 3 - E3-10

E2-12 Armando Ortiz and Associates, a C.P.A. firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November.

Listed below are data concerning the three audit jobs conducted during November.

Hernandez Navarro Vallejo
Direct materials $600 $400 $200
Auditor labor costs $5,400 $6,600 $3,375
Auditor hours 72 88 45

Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $50 per auditor hour. The Hernandez job is the only incomplete job at the end of November. Actual overhead for the month was $11,000.

(a) Determine the cost of each job.
(b) Indicate the balance of the Work in Process account at the end of November.
(c) Calculate the ending balance of the Manufacturing Overhead account for November.

BE3-5 Using the data in BE3-4, compute equivalent units of production for materials and conversion costs, assuming materials are entered at the beginning of the process.

Data from BE3-4
Ending Work in Process
Beginning Units % Complete as to
Month Work in Process Transferred Out Units Conversion Cost
January –0– 20,000 5,000 40%
March –0– 30,000 4,000 75
July –0– 50,000 10,000 25

BE3-6 In Georgia Company, total material costs are $52,000, and total conversion costs are $60,000. Equivalent units of production are materials 10,000 and conversion costs 12,000. Compute the unit costs for materials, conversion costs, and total manufacturing costs.

E3-10 The Welding Department of Marlin Manufacturing Company has the following production and manufacturing cost data for February 2005. All materials are added at the beginning of the process.

Manufacturing Costs Production Data
Beginning work in process Beginning work in process 15,000 units,
Materials $15,000 10% complete
Conversion costs 30,435 $ 45,435 Units transferred out 49,000
Materials 180,000 Units started 60,000
Labor 35,100 Ending work in process 26,000,
Overhead 64,545 20% complete

Prepare a production cost report for the Welding Department for the month of February.

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