Problem 1
At the end of January 2018, the accounting information system of Historic Instruments revealed the following amounts:

Total manufacturing costs incurred in January 2018, $180
Purchases of direct materials on account, $50
Purchases of direct materials for cash, $12
Ending work in process, $15
Ending inventory of direct materials, $22
Ending finished goods inventory, $50
Direct labor incurred, $70
Cost of goods manufactured in January 2018, $183
Cost of goods available for sale, $220
Cost of direct materials used, $80
Beginning work in process, $18

Based on the preceding information, calculate the following amounts. Record your responses on the answer sheet at the end of this exam.

1. Beginning inventory of direct materials
2. Total factory overhead
3. Total manufacturing costs
4. Beginning inventory of finished goods
5. Cost of goods sold

Problem 2
Flagler Company allocates overhead based on machine hours. It estimated overhead costs for the year to be $420,000. Estimated machine hours were 50,000. Actual hours and costs for the year were 46,000 machine hours and $380,000 of overhead.

Calculate the following amounts;

1) Overhead application rate for the year
2) Amount of applied overhead for the year
3) Amount of under- or over-applied overhead for the year. Indicate whether it is under- or over-applied.

Problem 3
The Pikes Peak Leather Company manufactures leather handbags and moccasins. The company has decided to evaluate activity based costing to allocate factory overhead.

Pikes Peak has identified three cost pools for its ABC analysis:

Set-ups. Budgeted cost, $80,000.
Quality control inspections. Budgeted cost, $20,000.
Purchasing. Budgeted cost, $10,000.

Estimated activity for each product line appears below:

Handbags
Moccasins
500 set-ups.
300 set-ups.
200 inspections.
800 inspections.
100 purchase orders.
300 purchase orders.

The factory plans to produce 60,000 handbags and 40,000 moccasins.

Calculate the following amounts.

1) Activity rate for set-ups
2) Activity rate for quality control inspections
3) Total overhead (from all three cost pools) allocated to handbags
4) Total overhead (from all three cost pools) allocated to moccasins

Problem 4
For the coming year, River Company estimates fixed costs at $51,000, the unit variable cost at $21, and the unit selling price at $55.

Determine each of the following amounts;
1) the contribution margin per unit
2) the break-even point in units
3) the number of units River must sell to realize operating income of $150,000
4) the profit or loss (indicate which) if River sells 1,200 units

Problem 5 chap
A business operated at 100% of capacity during its first month, with the following results:

Sales (160 units)                                                       $160,000
Production costs (200 units):
Direct materials                            $100,000
Direct labor                                        20,000
Variable factory overhead                10,000
Fixed factory overhead                      4,000          134,000

Operating expenses:
Variable operating expenses          $ 12,000
Fixed operating expenses                   2,000.             14,000

Calculate the following amounts.
1) Cost of goods sold using absorption costing
2) Income from operations using absorption costing
3) Contribution margin using variable costing
4) Income from operations using variable costing

Problem 1 At the end of January 2018, the accounting information s...