All categories

2 years ago

Roan Paper Co. produces the paper used by wallpaper manufacturers.

Business

1 answer:

son4ous [18]2 years ago

8 0

Answer:

Roan Paper Co.

Mixing Department

Production Cost Report for March:

Direct Direct Manufacturing Total Costs

Materials Labor O/h Allocated

Beginning inventory $350 $245 $200 $795

Costs added during

March 4,940 3,000 3,225 11,165

Total costs $5,290 $3,245 $3,425 $11,960

less Ending inventory $115 $71 $74 $260

Cost of production $5,175 $3,174 $3,351 $11,700

2. General Journal:

Date Description Debit Credit

March

Cost of production $11,700

Direct Materials $5,175

Direct Labor $3,174

Manufacturing overhead $3,351

To record the cost of production for march.

Direct Materials costs $5,175

Direct Labor costs $3,174

Manufacturing overhead $3,351

Cash Account $8,526

Wages Payable $3,174

To record costs of materials, labor and overhead.

Explanation:

a) Data and Calculations for March:

Direct Direct Manufacturing Total Costs

Materials Labor O/h Allocated

Beginning inventory $350 $245 $200 $795

Costs added during

March 4,940 3,000 3,225 11,165

Total costs $5,290 $3,245 $3,425 $11,960

Total units = 5,000 ( Beginning = 300, March started = 4,200 and Ending = 500 units)

Beginning inventory of 300 and started and completed, 4,200 were 100% complete = 4,500

Ending inventory of 500 were 20% complete = 100 units.

b) Calculation of Equivalent units:

Direct Direct Manufacturing Total Costs

Materials Labor O/h Allocated

Units completed 4,600 4,600 4,600 4,600

Ending inventory 100 100 100 100

Production for March 4,500 4,500 4,500 4,500

Unit cost per

equivalent unit $1.15 $0.71 $0.74 $2.60

Cost of Ending WIP $115 $71 $74 $260

Cost of production $5,175 $3,174 $3,351 $11,700

b) Equivalent units are the units under production multiplied by their percentage of completion. Usually, completed units have 100% completion, while work in process do not have 100% completion with respect to conversion costs, especially. The purpose of calculating equivalent units is to determine accurate costs of units completed.

c) The weighted-average method in allocating production costs means that the beginning inventory, units started and completed in the period, and the equivalent units of ending inventory are added. Then the costs of materials, labor, and overhead are allocated based on the average costs.

You might be interested in

A production line engineer, Shane, checks every chip for quality control (QC). His workers find errors approximately every 150 c

Setler [38]

Answer:

the question is incomplete:

The line produces 100,000 chips per year.

Every chip is purchased.

Chips cost about $9.00 to produce.

Chip testing runs about $4.00 per chip.

Chip repair (manpower and material) is about $2.00.

This repair cost includes re-testing.

Profit per chip is $0.25 after testing.

There are fifteen full time employees working under Shane.

Two part-time employees work under Shane's supervision.

Shane's manager has been with the company for about 7 years.

Shane has been working under the same manager for several years and has had relatively good relations with Rob.

the requirements are:

1. What percent of the chips may fail if Xanthum, Inc. Orders 15,000 chips from Shane's production line?

1 out of every 150 chips is defective, so % of defective ships = (1 / 150) x 100 = 0.667%
since Xanthum ordered 15,000 chips, approximately 100 chips will be defective

2. Do you believe this is an acceptable failure rate? From the perspective of Xanthum? From the perspective of the manufacturer? Why (not)?

As a client (Xanthum), no failure rate is acceptable. I personally would return the chips and probably not buy from them anymore. Imagine that you use the chips to manufacture something else, then the defective chips will hurt you product's reputation and will cost you money.
As a manufacturer, it is an acceptable rate since 99.333% of the chips don't have any type of defect. The problem is not the failure rate (which is really small), the problem is doing nothing about it.

3. If Shane's line produces 100,000 chips per year how much will it cost to:

a) Test and repair each chip?

you will spend 100,000 x $4 = $400,000 testing the chips
repair costs = (100,000 x 0.667%) x $2 = $1,333.33

b) Test all chips and ax the defective chips?

you will spend 100,000 x $4 = $400,000 testing the chips
costs from axed chips = 667 chips x ($9 + $4) = $8,671

c) Test no chips and replace customers chips on an as-need basis?

if you do not test any chip, then the testing cost is $0
the total amount of defective chips returned can vary from 0 - 667, if 0 are returned, then the cost of replacing chips is $0. If 667 chips are returned, the replacement cost = (667 x $9) + lost profit from replaced chips = $6,003 + [667 x ($4 + $2 + $0.25)] = $6,003 + $4,168.75 = $10,171.75 pus any other costs associated to replacing the chips

4. Is the Rob's estimate reasonable? What about his assertion that it is cheaper not to discard the defective chips?

Since replacing defective chips is much cheaper than testing and repairing them, then Rob is right about earning more money by not repairing them. But, he is not considering how the company's sales will be affected by selling defective chips. If we return to question 2, if I was a client, i wouldn't buy any more chips from Rob's company since they are defective. The costs of defective parts can result in potential lawsuits and product reputation. Rob is only considering manufacturing costs, he is not considering how this might affect the company in other ways. E.g. Imagine that Xanthum manufactures medical equipment and since Rob's chips were defective, they fail. If Xanthum is sued by its customers, Rob's company will also be sued.

5 0

2 years ago

Business Designs utilizes a structure that includes functional divisions, such as accounting and production, and a divisional ch

SSSSS [86.1K]

Answer:

Matrix organization.

Explanation:

A matrix organization is a blended organizational structure. This tries simultaneously to deal with competing pressures for global integration and local responsiveness. Institutes overlaps among functional and divisional forms.

Although a functional hierarchy is still in place, the project manager is recognized as a valuable position and is given more authority to manage the project and assign resources.

Gives functional, product, and geographic groups a common focus.

Matrix organizations can be further divided into weak, balanced, and strong matrix organizations. A weak matrix gives more authority to the functional manager (FM), whereas the strong matrix gives more power to the PM. As the name suggests, the balanced matrix balances power between the FM and the PM. The difference between the three is the level of authority given to the project manager (PM).

3 0

1 year ago

Read 2 more answers

Billingsley, inc. is borrowing $60,000 for five years at an apr of 8 percent. the principal is to be repaid in equal annual paym

alexandr1967 [171]

60,000 / 0.8 % = 75,000 loans

6 0

2 years ago

U.S.-based companies should turn to the _____ for the most comprehensive source of export information.

Juliette [100K]

Answer:

Department of commerce

Explanation:

U.S.-based companies should turn to the department of commerce for the most comprehensive source of export information.

The department of commerce is a section in the United States government. It creates jobs through good and favorable international trade terms, sustainable development and through access to high technology.

It provides companies with trade informations of which exports is one.

6 0

2 years ago

Beacon Food Stores purchased canned goods at an invoice price of $4,000 and terms of 2/10, n/30. Half of the goods had been misl

seraphim [82]

Answer:

The amount paid should be $1,600

Explanation:

The terms of 2/10, n/30 means 2% discount for the payment within 10 days and the full amount to be paid within 30 days.

Beacon Food Stores purchased canned goods at an invoice price of $4,000. Half of the goods were returned immediately to the supplier.

The remaining amount of the invoice that Beacon Food needs to pay is $2,000

Beacon Food pays the remaining amount of the invoice within the discount period. The amount of discount the company is offered = $2,000 x 2% = $40

The amount paid = $2,000 - $40 = $1,600

4 0

1 year ago