Boss Company’s standard cost accounting system recorded this information from its December operations.

$$\begin{matrix} \text{Standard direct materials cost } \ldots\ldots\ldots& \text{\$100,000}\\ \text{Direct materials quantity variance (unfavorable)}\ldots\ldots\ldots & \text{3,000}\\ \text{Direct materials price variance (favorable) .}\ldots\ldots\ldots & \text{500}\\ \text{Actual direct labor cost}\ldots\ldots\ldots & \text{90,000}\\ \text{Direct labor efficiency variance (favorable)}\ldots\ldots\ldots & \text{7,000}\\ \text{Direct labor rate variance (unfavorable)}\ldots\ldots\ldots & \text{1,200}\\ \text{Actual overhead cost}\ldots\ldots\ldots & \text{375,000}\\ \text{Volume variance (unfavorable)} \ldots\ldots\ldots& \text{12,000}\\ \text{Controllable variance (unfavorable)}\ldots\ldots\ldots & \text{9,000}\\ \end{matrix}$$

1. Prepare December 31 journal entries to record the company’s costs and variances for the month. (Do not prepare the journal entry to close the variances.) 2. Identify the variances that would attract the attention of a manager who uses management by exception. Explain what action(s) the manager should consider.

Units of production data for the two departments of Pacific Cable and Wire Company for November of the current fiscal year are as follows:

$$\begin{array}{lll} &\underline{\textbf{Drawing Department}}&\underline{\textbf{Winding Department}}\\ \text{Work in process, November 1}&\text{5,000 units, 40\\\% completed}&\text{3,200 units, 80\\\% completed}\\ \text{Completed and transferred to next}\\ \hspace{5pt}\text{processing department during November}&\text{95,000 units}&\text{95,100 units}\\ \text{Work in process, November 30}&\text{6,200 units, 60\\\% completed}&\text{3,100 units, 15\\\% completed} \end{array}$$

If all direct materials are placed in process at the beginning of production, determine the direct materials and conversion equivalent units of production for November for (b) the Winding Department.

Hans Enterprises is a large producer of birdseed. During June, the company produced 160 batches of crow bait. Each batch weighs 1,000 pounds. To produce this quantity of output, the company purchased and used 170,000 pounds of direct materials at a cost of $\$ 816,000$. It also incurred direct labor costs of $\$ 20,000$ for the 2,500 hours worked by employees on the crow bait crew. Manufacturing overhead incurred at the crow bait plant during June totaled $\$ 4,200$, of which $\$ 3,100$ was considered fixed. Hans's standard cost information for each 1,000-pound batch of crow bait is as follows:

Instructions

a. Compute the materials price and quantity variances.

Warwick Bottle Company (WBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards per $100$ two-liter bottles are as follows:

$$\begin{array}{lc} \text { Cost Category } & \begin{array}{c} \text { Standard Cost } \\ \text { per 100 Two-Liter } \\ \text { Bottles } \end{array} \\ \hline \text { Direct labor } & \$ 1.32 \\ \text { Direct materials } & 5.34 \\ \text { Factory overhead } & \underline{0.34} \\ \text { Total } & \underline{\underline{\$ 7.00}} \end{array}$$

At the beginning of July, WBC management planned to produce $650,000$ bottles. The actual number of bottles produced for July was $700,000$ bottles. The actual costs for July of the current year were as follows:

$$\begin{array}{lc} &\text { Actual Cost for the }\\ \text { Cost Category } & \text { Month Ended July 31, 2010 } \\ \hline \text { Direct labor } & \$\hspace{5pt}9,400 \\ \text { Direct materials } & \hspace{5pt}36,500 \\ \text { Factory overhead } & \underline{\hspace{9pt}2,400} \\ \text { Total } & \underline{\$ 48,300} \end{array}$$

Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for July.

Units of production data for the two departments of Pacific Cable and Wire Company for November of the current fiscal year are as follows:

$$\begin{array}{lll} &\underline{\textbf{Drawing Department}}&\underline{\textbf{Winding Department}}\\ \text{Work in process, November 1}&\text{5,000 units, 40\\\% completed}&\text{3,200 units, 80\\\% completed}\\ \text{Completed and transferred to next}\\ \hspace{5pt}\text{processing department during November}&\text{95,000 units}&\text{95,100 units}\\ \text{Work in process, November 30}&\text{6,200 units, 60\\\% completed}&\text{3,100 units, 15\\\% completed} \end{array}$$

If all direct materials are placed in process at the beginning of production, determine the direct materials and conversion equivalent units of production for November for (a) the Drawing Department.

Reflection Lighting Inc. manufactures lighting fixtures, using just-in-time manufacturing methods. Style BB-01 has a materials cost per unit of $35. The budgeted conversion cost for the year is$168,000 for 2,100 production hours. A unit of Style BB-01 requires 12 minutes of cell production time. The following transactions took place during October:

1. Materials were acquired to assemble 900 Style BB-01 units for October.
2. Conversion costs were applied to 900 Style BB-01 units of production.
3. 880 units of Style BB-01 were completed in October.
4. 860 units of Style BB-01 were sold in October for $105 per unit.

a. Determine the budgeted cell conversion cost per hour.

Headset manufactures headphone cases. During September 2018, the company produced 106,000 cases and recorded the following cost data:

$$\begin{array}{lcc} \textbf{Standard Cost Information}\\ \hline &&\textbf{Quantity}&&\textbf{Cost}\\ \hline\\ \text{Direct Materials}&&\text{2 parts\hspace{15pt}}&&\text{\$\hspace{5pt}0.16 per part}\hspace{11pt}\\ \text{Direct Labor}&&\text{0.02 hours}&&\text{8.00 per hour}\\ \text{Variable Manufacturing Overhead}\hspace{10pt}&&\text{0.02 hours}&&\text{11.00 per hour\hspace{5pt}}\\ \end{array}$$

$$\begin{array}{lcc} \text{Fixed Manufacturing Overhead (\$30,720 for static budget }\hspace{67pt}\\ \text{volume of 96,000 units and 1,920 hours, or \$16 per hour)}\\ \\\hline \end{array}$$

$$\begin{array}{lrr} \textbf{Actual Cost Information}\\ \hline\\ \text{Direct Materials\hspace{52pt}(209,000 parts @ \$0.21 per part)}&&\text{\$\hspace{5pt}43,890}\\ \text{Direct Labor\hspace{67pt}(1,620 hours @ \$8.10 per hour) }&&\text{13,122}\\ \text{Variable Manufacturing Overhead}\hspace{10pt}&&\text{9,000}\\ \text{Fixed Manufacturing Overhead}\hspace{10pt}&&\text{30,000}\\ \\\hline \end{array}$$

Requirements

1. Compute the cost and efficiency variances for direct materials and direct labor.
2. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances.
3. Headset's management used better-quality materials during September. Discuss the trade-off between the two direct material variances.

A new company started production. Job 10 was completed, and Job 20 remains in production. Here is the information from job cost sheets from their first and only jobs so far:

$$\begin{array}{lcr} \text { Job 10 } & \text { Hours } & \text { Total Cost } \\ \text { Direct materials } & & \$ 765 \\ \text { Direct labor } & 75 & 1,575 \\ \text { Manufacturing overhead } & & 60 \\ \text { Total cost } & & \$ 2,400 \end{array}$$

$$\begin{array}{lrr} \text { Job 20 } & \text { Hours } & \text { Total Cost } \\ \text { Direct materials } & & \$ 145 \\ \text { Direct labor } & 113 & 2,373 \\ \text { Manufacturing overhead } & & 90 \\ \text { Total cost } && \$ 2,608 \end{array}$$

Using the information provided, A. What is the balance in work in process?

Genie in a Bottle Company (GBC) Manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows:

$$\begin{array}{lc} \underline{\text { Cost Category }} & \underline{\text { Standard Cost per 100 Two-Liter Bottles}} \\ \text { Direct labor } & \$\hspace{5pt}2.00 \\ \text { Direct materials } & 9.10 \\ \text { Factory qoverhead } &\underline{\text{ 0.55}} \\ \text { Total } & \underline{\text{\$0.55}} \\ \end{array}$$

At the beginning of July, GBC management planned to produce 400,000 bottles. The actual number of bottles produced for July was 406,000 bottles. The actual costs for July of the current year were as follows:

$$\begin{array}{lc} \underline{\text { Cost Category }} & \underline{\text {Actual Cost for the Month Ended July 31}} \\ \text { Direct labor } & \$\hspace{5pt}7,540 \\ \text { Direct materials } &35,750 \\ \text { Factory qoverhead } &\underline{\text{ 2,680}} \\ \text { Total } &\underline{\underline{\text{\$45,980}}} \\ \end{array}$$

b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and direct factory overhead for July.

(a) In Section we discussed how a magnetic dipole, such as a current loop or a magnetized object, can be attracted or repelled by a permanent magnet. Use this to explain why either pole of a magnet attracts both paramagnetic materials and (initially unmagnetized) ferromagnetic materials, but repels diamagnetic materials. (b) The force that a magnet exerts on an object is directly proportional to the object's magnetic moment. A particular magnet is just strong enough to pick up a cube of annealed iron $\left(K_{\mathrm{m}}=1400\right) 2.00 \mathrm{~cm}$ on a side so that the iron sticks to one of the magnet's poles; that is, the magnet exerts an upward force on the iron cube equal to the cube's weight. If you tried to use this magnet to pick up a $2.00-\mathrm{cm}$ cube of aluminum instead, what would be the upward force on the cube? How does this compare to the weight of the cube? Could the magnet pick up the cube? (Hint: You will need to use information from Tables and ) (c) If you tried to use the magnet to pick up a $2.00-\mathrm{cm}$ cube of silver, what would be the magnitude and direction of the force on the cube? How does this magnitude compare to the weight of the cube? Would the effects of the magnetic force be noticeable?

Slick Corporation is a small producer of synthetic motor oil. During May, the company produced 5,000 cases of lubricant. Each case contains twelve quarts of synthetic oil. To achieve this level of production, Slick purchased and used 16,500 gallons of direct materials at a cost of $\$ 20,625$. It also incurred average direct labor costs of $\$ 15$ per hour for the 4,200 hours worked in May by its production personnel. Manufacturing overhead for the month totaled $\$ 9,950$, of which $\$ 2,200$ was considered fixed. Slick's standard cost information for each case of synthetic motor oil is as follows:

Direct materials standard price = $\$1.30$ per gallon

Standard quantity allowed per case = 3.25 gallons

Direct labor standard rate = $\$16$ per hour

Standard hours allowed per case = 0.75 direct labor hours

Fixed overhead budgeted = $\$2,600$ per month

Normal level of production = 5,200 cases per month

Variable overhead application rate = $\$1.50$ per case

Fixed overhead application rate ($\$2,600$ : 5,200 cases) = 0.50 per case

Total overhead application rate = $\$2.00$ per case

Instructions

a. Compute the materials price and quantity variances.

Reflection Lighting Inc. manufactures lighting fixtures, using just-in-time manufacturing methods. Style BB-01 has a materials cost per unit of $35. The budgeted conversion cost for the year is$168,000 for 2,100 production hours. A unit of Style BB-01 requires 12 minutes of cell production time. The following transactions took place during October:

1. Materials were acquired to assemble 900 Style BB-01 units for October.
2. Conversion costs were applied to 900 Style BB-01 units of production.
3. 880 units of Style BB-01 were completed in October.
4. 860 units of Style BB-01 were sold in October for $105 per unit.

b. Determine the budgeted cell conversion cost per unit.

Kenya Company’s standard cost accounting system recorded this information from its June operations.

$$\begin{matrix} \text{Standard direct materials cost}\ldots\ldots\ldots & \text{\$130,000}\\ \text{Direct materials quantity variance (favorable)}\ldots\ldots\ldots & \text{5,000}\\ \text{Direct materials price variance (favorable)}\ldots\ldots\ldots & \text{1,500}\\ \text{Actual direct labor cost}\ldots\ldots\ldots & \text{65,000}\\ \text{Direct labor efficiency variance (favorable)}\ldots\ldots\ldots & \text{3,000}\\ \text{Direct labor rate variance (unfavorable)}\ldots\ldots\ldots & \text{500}\\ \text{Actual overhead cost}\ldots\ldots\ldots & \text{250,000}\\ \text{Volume variance (unfavorable)}\ldots\ldots\ldots & \text{12,000}\\ \text{Controllable variance (unfavorable)}\ldots\ldots\ldots & \text{8,000}\\ \end{matrix}$$

1. Prepare journal entries dated June 30 to record the company’s costs and variances for the month. (Do not prepare the journal entry to close the variances.) 2. Identify the variances that would attract the attention of a manager who uses management by exception. Describe what action(s) the manager should consider.

AccuBlade Castings Inc. casts blades for turbine engines. Within the Casting Department, alloy is first melted in a crucible, then poured into molds to produce the castings. On May 1 , there were 230 pounds of alloy in process, which were 60 % complete as to conversion. The Work in Process balance for these 230 pounds was $32,844, determined as follows:$

$$\begin{array}{lr} \text { Direct materials }(230 \times \$ 132) & \$ 30,360 \\ \text { Conversion }(230 \times 60 \% \times \$ 18) & \underline{2,484} \\ & \underline{\underline{\$ 32,844}} \\ \end{array}$$

$During May, the Casting Department was charged$350,000 for 2,500 pounds of alloy and $19,840 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 2,530 pounds of finished castings to the Machining Department. The May 31 inventory in process was 44% complete as to conversion.

a. Prepare the following May journal entries for the Casting Department:

1. The materials charged to production
2. The conversion costs charged to production
3. The completed production transferred to the Machining Department

b. Determine the Work in Process—Casting Department May 31 balance.

c. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (April).