Terra Energy Company refines a variety of petrochemical products. The following data are from the firm's Lodi plant.

$$\begin{array}{lr} \text{ Work in process, November 1 } & 2,000,000 \text { gallons } \\ \text{ \quad Direct material } & 100 \% \text { complete } \\ \text{ \quad Conversion } & 25 \% \text { complete } \\ \text{ Units started in process during November } & 950,000 \text { gallons } \\ \text{ Work in process, November 30 } & 240,000 \text { gallons } \\ \text{ \quad Direct material } & 100 \% \text { complete } \\ \text{ \quad Conversion } & 80 \% \text { complete } \end{array}$$

Compute the equivalent units of direct material and conversion for the month of November. Use the weighted-average method of process costing.

Some stained-glass lampshades are made out of decorative pieces of glass. Estimate the amount of glass needed to make the lampshade shown at the right by calculating the lateral area of the pyramid formed by the framing. The pyramid has a square base.

In each case below, fill in the missing amount.

1.

$$\begin{array}{lr} \text{ Work in Process, September 1 } & \text{ 9,000 tons } \\ \text{ Units started during September } & ? \\ \text{ Units completed during September } & \text{ 19,000 tons } \\ \text{ Work in process, September 30 } & \text{ 2,000 tons } \end{array}$$

2.

$$\begin{array}{lr} \text{ Work in process, February 1 } & \text{ 13,000 kilograms } \\ \text{ Units started during February } & \text{ 1,500 kilograms } \\ \text{ Units completed during February } & \text{ 9,200 kilograms } \\ \text{ Work in process, February 28 } & ? \end{array}$$

3.

$$\begin{array}{lr} \text{ Work in process, January 1 } & \text{ 100,000 gallons } \\ \text{ Units started during the year } & \text{ 850,000 gallons } \\ \text{ Units completed during the year } & ? \\ \text{ Work in process, December 31 } & \text{ 200,000 gallons } \end{array}$$

Glass Glow Company manufactures a variety of glass windows in its Egalton plant. In department I, clear glass sheets are produced, and some of these sheets are sold as finished goods. Other sheets made in department I have metallic oxides added in department II to form colored glass sheets. Some of these colored sheets are sold; others are moved to department III for etching and then are sold. The company uses operation costing.

Glass Glow Company's production costs applied to products in May are given in the following table. There was no beginning or ending inventory of work in process for May.

$$\begin{array}{lrrr} \textbf{ Cost Category } & \textbf{ Dept. I } & \textbf{ Dept. II } & \textbf{ Dept. III } \\ \text{ Direct material } & \$ 450,000 & \$ 72,000 & -0- \\ \text{ Direct labor } & 38,000 & 22,000 & \$ 38,000 \\ \text{ Manufacturing overhead } & 230,000 & 68,000 & 73,750 \end{array}$$

$$\begin{array}{lrrr} && \textbf{ Dept. I } & \textbf{ Dept. II } \\ \textbf{ Products } & \textbf{ Units } & \textbf{ Dir. Mat. } & \textbf{ Dir. Mat. } \\ \text{ Clear glass, sold after dept. I } & 11,000 & \$ 247,500 & -0- \\ \text{ Unetched colored glass, sold after dept. II } & 4,000 & 90,000 & \$ 32,000 \\ \text{ Etched colored glass, sold after dept. III } & 5,000 & 112,500 & 40,000 \end{array}$$

Each sheet of glass requires the same steps within each operation.

Compute each of the following amounts.

$1.$ The conversion cost per unit in department I.

$2.$ The conversion cost per unit in department II.

$3.$ The cost of a clear glass sheet.

$4.$ The cost of an unetched colored glass sheet.

$5.$ The cost of an etched colored glass sheet.

The following data pertain to the Oneida Restaurant Supply Company for the year just ended.

$$\begin{array}{lr} \text{ Budgeted sales revenue } & \$ 205,000 \\ \text{ Actual manufacturing overhead } & 340,000 \\ \text{ Budgeted machine hours (based on practical capacity) } & 10,000 \\ \text{ Budgeted direct-labor hours (based on practical capacity) } & 20,000 \\ \text{ Budgeted direct-labor rate } & \$ \quad 14 \\ \text{ Budgeted manufacturing overhead } & \$ 364,000 \\ \text{ Actual machine hours } & 11,000 \\ \text{ Actual direct-labor hours } & 18,000 \\ \text{ Actual direct-labor rate } & \$ \quad 15 \end{array}$$

1. Compute the firm's predetermined overhead rate for the year using each of the following common cost drivers: $(a)$ machine hours, $(b)$ direct-labor hours, and $(c)$ direct-labor dollars.

2. Calculate the overapplied or underapplied overhead for the year using each of the cost drivers listed above.

Crunchem Cereal Company incurred the following actual costs during 20x1.

$$\begin{array}{lr} \text{Direct material used} & \$275,000\\ \text{Direct labor } &120,000\\ \text{Manufacturing overhead } &252,000\\ \end{array}$$

The firm’s predetermined overhead rate is 210 percent of direct-labor cost. The January 1 inventory balances were as follows:

$$\begin{array}{lr} \text{Raw material} & \$30,000\\ \text{Work in process} &39,000\\ \text{Finished goods} &42,000\\ \end{array}$$

Each of these inventory balances was 10 percent higher at the end of the year.

Required:

1. Prepare a schedule of cost of goods manufactured for 20x1.

2. What was the cost of goods sold for the year?

3. Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following data change: direct material used amounted to $281,000 and raw-material inventory on December 31 was$28,000.

The following data pertain to Tulsa Paperboard Company, a manufacturer of cardboard boxes.

$$\begin{array}{lr} \text{ Work in process, February 1 } & 10,000 \text{ units* } \\ \text{ \quad Direct material } & \$ 5,500 \\ \text{ \quad Conversion } & 17,000 \\ \text{ Costs incurred during February } \\ \text{ \quad Direct material } & \$ 110,000 \\ \text{ \quad Conversion } & 171,600 \\ \end{array}$$

$*$Complete as to direct material; $40 \%$ complete as to conversion.

The equivalent units of activity for February were as follows:

$$\begin{array}{lr} \text{ Direct material (weighted-average method) } & 110,000 \\ \text{ Conversion (weighted-average method) } & 92,000 \\ \text{ Completed and transferred out } & 90,000 \end{array}$$

Compute the following amounts using weighted-average process costing.

1. Cost of goods completed and transferred out during February.

2. Cost of the February $28$ work-in-process inventory.

The controller for Tender Bird Poultry, Inc. estimates that the company's fixed overhead is $\$ 100,000$ per year. She also has determined that the variable overhead is approximately $\$ .10$ per chicken raised and sold. Since the firm has a single product, overhead is applied on the basis of output units, chickens raised and sold.

1. Calculate the predetermined overhead rate under each of the following output predictions: $200,000$ chickens, $300,000$ chickens, and $400,000$ chickens.

2. Does the predetermined overhead rate change in proportion to the change in predicted production? Why?

Garrett Toy Company incurred the following costs in April to produce job number TB$78$, which consisted of $1,000$ teddy bears that can walk, talk, and play cards.

Direct Material:

$4/1/x0$ Requisition number $101$: $400$ yards of fabric at $\$ .80$ per yard

$4/5/x0$ Requisition number $108$: $500$ cubic feet of stuffing at $\$ .30$ per cubic foot

Direct Labor:

From employee time cards for $4 / 1 / x 0$ through $4 / 8 / x 0: 500$ hours at $\$12$ per hour

Manufacturing Overhead:

Applied on the basis of direct-labor hours at $\$ 2.00$ per hour.

On April $30$, $700$ of the bears were shipped to a local toy store.

Prepare a job-cost record using the information given above.

Finley Educational Products started and finished job number B$67$ during June. The job required $\$ 4,600$ of direct material and $40$ hours of direct labor at $\$ 17$ per hour. The predetermined overhead rate is $\$ 5$ per direct-labor hour.

Prepare journal entries to record the incurrence of production costs and the completion of job number B$67$.

The following data pertain to the Oneida Restaurant Supply Company for the year just ended.

$$\begin{array}{lr} \text{Budgeted sales revenue} & \$205,000\\ \text{Actual manufacturing overhead} &340,000\\ \text{Budgeted machine hours (based on practical capacity)} &10,000\\ \text{Budgeted direct-labor hours (based on practical capacity)} &20,000\\ \text{Budgeted direct-labor rate} & 14\\ \text{Budgeted manufacturing overhead } &364,000\\ \text{Actual machine hours} & 11,000\\ \text{Actual direct-labor hours} &18,000\\ \text{Actual direct-labor rate } & 15\\ \end{array}$$

Required:

1. Compute the firm’s predetermined overhead rate for the year using each of the following common cost drivers: (a) machine hours, (b) direct-labor hours, and (c) direct-labor dollars.

2. Calculate the over-applied or under-applied overhead for the year using each of the cost drivers listed above.

Burlington Clock Works manufactures fine, handcrafted clocks. The firm uses a job-order costing system, and manufacturing overhead is applied on the basis of direct-labor hours. Estimated manufacturing overhead for the year is $\$ 240,000$. The firm employs 10 master clockmakers, who constitute the directlabor force. Each of these employees is expected to work $2,000$ hours during the year, which represents each employee's practical capacity. The following events occurred during October.

a. The firm purchased $3,000$ board feet of mahogany veneer at $\$ 11$ per board foot.

b. Twenty brass counterweights were requisitioned for production. Each weight cost $\$ 23$.

c. Five gallons of glue were requisitioned for production. The glue cost $\$ 20$ per gallon. Glue is treated as an indirect material.

d. Depreciation on the clockworks building for October was $\$ 8,000$.

e. A $\$ 400$ utility bill was paid in cash.

f. Time cards showed the following usage of labor: Job number G$60$: $12$ grandfather's clocks, $1,000$ hours of direct labor Job number C$81$: $20$ cuckoo clocks, $700$ hours of direct labor The master clockmakers (direct-labor personnel) earn $\$ 20$ per hour.

g. The October property tax bill for $\$ 910$ was received but has not yet been paid in cash.

h. The firm employs laborers who perform various tasks such as material handling and shop cleanup. Their wages for October amounted to $\$ 2,500$.

i. Job number G60, which was started in July, was finished in October. The total cost of the job was $\$ 14,400$.

j. Nine of the grandfather's clocks from job number G60 were sold in October for $\$ 1,500$ each.

1. Calculate the firm's predetermined overhead rate for the year.

2. Prepare journal entries to record the events described above.

Selected data concerning the past year's operations of the Ozarks Manufacturing Company are as follows:

$$\begin{array}{lrr} && \textbf{ \underline { Inventories }} \\ & \textbf{ Beginning } & \textbf{ Ending } \\ \text{ Raw material } & \$ 71,000 & \$ 81,000 \\ \text{ Work in process } & 80,000 & 30,000 \\ \text{ Finished goods } & 90,000 & 110,000 \\ \text{ Other data: } & \\ \text{ \quad Direct material used } & & \$ 326,000 \\ \text{ \quad Total manufacturing costs charged to production during the year } & \\ \text{ \quad \quad (includes direct material, direct labor, and manufacturing overhead } & \\ \text{ \quad \quad applied at a rate of 60 \\\% of direct-labor cost) } & & 686,000 \\ \text{ \quad Cost of goods available for sale } & & 826,000 \\ \text{ \quad Selling and administrative expenses } & & 31,500 \end{array}$$

$1.$ What was the cost of raw materials purchased during the year?

$2.$ What was the direct-labor cost charged to production during the year?

$3.$ What was the cost of goods manufactured during the year?

$4.$ What was the cost of goods sold during the year?

Midnight Sun Apparel Company uses normal costing, and manufacturing overhead is applied to workin-process on the basis of machine hours. On January $1$ of the current year, there were no balances in work-in-process or finished-goods inventories. The following estimates were included in the current year's budget.

$$\begin{array}{lr} \text{ Total budgeted manufacturing overhead } & \$ 235,000 \\ \text{ Total budgeted machine hours } & 47,000 \end{array}$$

During January, the firm began the following production jobs:

$$\begin{array}{lr} \text { A79: } & 1,000 \text { machine hours } \\ \text { N08: } & 2,500 \text { machine hours } \\ \text { P82: } & 500 \text { machine hours } \end{array}$$

During January, job numbers A$79$ and N$08$ were completed, and job number A$79$ was sold. The actual manufacturing overhead incurred during January was $\$ 26,000$.

$1.$ Compute the company's predetermined overhead rate for the current year.

$2.$ How much manufacturing overhead was applied to production during January?

$3.$ Calculate the overapplied or underapplied overhead for January.

$4.$ Prepare a journal entry to close the balance calculated in requirement $(3)$ into Cost of Goods Sold.

$5.$ Prepare a journal entry to prorate the balance calculated in requirement $(3)$ among the Work-in-Process Inventory, Finished-Goods Inventory, and Cost of Goods Sold accounts.