2023 Exercise 16 3 ledger of Custer Company has the following work in process account | Assignments Online

Exercise 16-3

ledger of Custer Company has the following work in process account.

Work in Process—Painting
5/1	Balance	4,380	5/31	Transferred out	?
5/31	Materials	6,160
5/31	Labor	3,110
5/31	Overhead	1,580
5/31	Balance	?

Production records show that there were 440 units in the beginning inventory, 30% complete, 1,510 units started, and 1,510 units transferred out. The beginning work in process had materials cost of $2,150 and conversion costs of $1,720. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

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(a) How many units are in process at May 31? Work in process, May 31   [removed]440  units (b) What is the unit materials cost for May? (Round unit costs to 2 decimal places, e.g. 2.25.) The unit materials cost for May   $[removed]4.56 (c) What is the unit conversion cost for May? (Round unit costs to 2 decimal places, e.g. 2.25.) The unit conversion cost for May   $[removed]4.80

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Exercise 17-1

Wilkins Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations.

		Standard		Custom
Direct labor costs		$56,600		$114,000
Machine hours		1,230		1,470
Setup hours		100		380

Total estimated overhead costs are $308,300. Overhead cost allocated to the machining activity cost pool is $198,500, and $109,800 is allocated to the machine setup activity cost pool.

(a)   Compute the overhead rate using the traditional (plantwide) approach. (Round answers to 2 decimal places, e.g. 12.25%.)

Predetermined overhead rate

[removed]180.72

% of direct labor cost

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(b)Compute the overhead rates using the activity-based costing approach. (Round answers to 2 decimal places, e.g. $12.25.)

Machining		$[removed]73.52	per machine hour
Machine setup		$[removed]228.75	per setup hour

 

(c)

Determine the difference in allocation between the two approaches. (Round answers to 0 decimal places, e.g. $1,225.)

Traditional costing
Standard		$[removed]102,288
Custom		$[removed]206,021
Activity-based costing
Standard		$[removed]113,305
Custom		$[removed]194,999

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