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P5-46 P6-46 P8-35

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P5-46 Heurion Company is a job order costing firm that uses a plantwide overhead rate based on direct labor hours. Estimated information for the year is as follows:

Overhead 789,000
Direct labor hours 100,000

Heurion worked on five jobs in July. Data are as follows:

 Job 741   Job 742   Job 743   Job 744   Job 745 
Balance, July 1  29,870  55,215  27,880  -    -  
Direct materials  25,500  39,800  14,450  13,600  8,420
Direct labor cost  61,300  48,500  28,700  24,500  21,300
Direct labor hours  4,000  3,400  1,980  1,600  1,400

By July 31, Jobs 741 and Jobs 743 were completed and sold. The remaining jobs were in process.

1. Calculate the plantwide overhead rate for the Heurion Company. Round to the nearest cent.
2. Prepare the job order cost sheets for each job showing all costs through July 31
3. Calculate the balance in WORK IN PROCESS on July 31.
4. Calculate COST OF GOODS sold for July.

Problem 6-46 Basic Flows, Equivalent Units

Bowman Company produces an arthritis medication that passes through two departments: Mixing and Tableting. Bowman uses the weighted average method. Data for February for Mixing is as follows: BWIP was zero; EWIP had 7,200 units, 50 percent complete; and 84,000 units were started. Tableting's data for February is as follows: BWIP was 4,800 units, 20 percent complete; and 2,400 units were in EWIP, 40 percent complete.

1. For Mixing, calculate the (a) number of units transferred to Tableting, and (b) equivalent units of production.

2. For Tableting, calculate the number of units transferred out to Finished Goods.

3. Suppose that the units in the mixing department are measured in ounces,
while the units in Tableting are measured in bottles of 100 tablets, with a total weight
of eight ounces (excluding the bottle) and then repeat requirement 2 using this approach.

P8-35 Variable-Costing and Absorption-Costing Income

Tenley Company produces and sells wooden pallets that are used
for moving and stacking materials. The operating costs for the past year were as follows:

Variable costs per unit:
Direct materials ................3.35
Direct labor................... 1.78
Variable overhead ............1.60
Variable selling ................0.90
Fixed costs per year
Fixed overhead ................$180,000
Selling and administrative. 96,000

During the year, Tenley produced 300,000 wooden pallets and sold
306,500 at $9 each. Tenley had $11,300
pallets in beginning finished goods inventory; costs have not changed from last
year to this year. An actual costing system is used for product costing.


1. What is the per-unit inventory cost that will be reported on Tenley's balance sheet at the end of the year?
How many units are in ending inventory? What is the total cost of ending inventory?
2. Calculate absorption-costing operating income.
3. Conceptual Connection: What would the per-unit inventory cost be under variable costing?
Does this differ from the unit cost computed in Requirement 1?
4. Calculate variable-costing operating income.
5. Suppose that Tenley Company had sold 296700 pallets during the year.
What would absorption-costing operating income have been? Variable-costing income?

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