What are the total prevention costs for the Abrams Corporation?.
Flow of manufacturing costs
The following data are taken from the accounting records of Gregory Mfg. Co.:
Compute the following for the current year:
(a) Direct materials purchased: $____________
(b) Total manufacturing costs charged to production (the Work in Process Inventory account):
$____________
(c) The cost of finished goods manufactured: $____________
(d) The cost of goods sold: $____________
2. Schedule of cost of finished goods manufactured
The accounting records of Village Cleaning Co. include the following information about the
company’s manufacturing costs and inventories in 2011:
Complete the following Schedule of Cost of Finished Goods Manufactured for the year ended
December 31, 2009:
3. The following information is available for the LBB Company for the year 2011:
Required
(1) What are total manufacturing costs charged to work in process?
(2) What are costs of finished goods manufactured?
(3) What is the cost of goods sold?
(4) What is gross profit?
(5) What is operating income?
4. Langdon Company manufactures custom designed toy sailboats. They use a job order costing
system. Overhead is applied based on direct labor hours. Estimated overhead for 2012 is $11,840
and the company estimates it will use 7,400 direct labor hours. The following events occurred in
March.
(a.) The company purchased materials for $800 on account.
(b.) The production supervisor requisitioned 15 sheets of fiberglass for constructing the boats.
The fiberglass was in stock and originally cost $3 a sheet.
(c.) Direct labor on the boats cost $500.
(d.) More materials were purchased for $350 on account.
(e.) Indirect labor costs were $210.
(f.) A utility bill for the boat factory was $230 and was paid in cash.
(g.) A repair bill for the salesman’s car was $75 and will be paid next month.
(h.) Additional materials were placed into production which cost $215.
(i.) Manufacturing overhead was applied (direct labor during March totaled 500 hours).
(j.) One sailboat was completed which cost $325.
(k.) The completed sailboat was sold for $750. Record the sale and the cost of sale.
Required:
(1.) Determine the overhead application rate.
(2.) Prepare journal entries for the above transactions.
(3.) What is the cost of the remaining Work in Process?
5. The Abrams Corporation incurred the following quality costs for the year ending December
31, 2012:
(a.) What are the total prevention costs for the Abrams Corporation?
(b.) What are the total appraisal costs for the Abrams Corporation?
(c.) What are the total internal failure costs for the Abrams Corporation?
(d.) What are the total external failure costs for the Abrams Corporation?
What are the total prevention costs for the Abrams Corporation?
