# Heros inc manufactures women boating shoes_manufacturing overhead is

Question 1) Heros, Inc., manufactures women’s boating shoes. Manufacturing overhead is assigned to production on a machine-hour basis. For 2010, it was estimated that manufacturing overhead would total \$369,550 and that 27,220 machine hours would be used.

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B. During May, 3,500 pairs of shoes were made. Raw materials costing \$6,080 were used, and direct labor costs totaled \$9,780. A total of 750 machine hours were worked during the month of May. Calculate the cost per pair of shoes made during May.

“Question 2)
Galvaset Indutries manufactures and sells custom-made windows. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning three manufacturing overhead cost drivers (activities). Assume that the direct labor rate is \$12 per hour and that there were no beginning inventories. The following information was available for 2010, based on an expected production level of 45,200 units for the year, which will require 222,000 direct labor hours:”

A. Calculate the total manufacturing costs and the cost per unit of the windows produced during the month of March (using the activity-based costing approach).
B. Assume instead that Galvaset Industries applies manufacturing overhead on a direct labor hours basis (rather than using the activity-based costing system previously described). Calculate the total manufacturing cost and the cost per unit of the windows produced during the month of March. (Hint: You will need to calculate the predetermined overhead application rate using the total budgeted overhead costs for 2010.)

“Question 3)
Texally, Inc., manufactures pocket calculators. Costs incurred in making 9,120 calculators in April included \$29,200 of fixed manufacturing overhead. The total absorption cost per calculator was \$11.3.”

B. The ending inventory of pocket calculators was 760 units higher at the end of the month than at the beginning of the month. By how much and in what direction (higher or lower) would operating income for the month of April be different under variable costing than under absorption costing?”

Question 4) Rolen, Inc., is in the process of preparing the fourth quarter budget for 2010, and the following data have been assembled:

The company sells a single product at a price of \$65 per unit. The estimated sales volume for the next six months is as follows:”

“All sales are on account. The company’s collection experience has been that 30% of a month’s sales are collected in the month of sale, 68% are collected in the month following the sale, and 2% are uncollectible. It is expected that the net realizable value of accounts receivable (i.e., accounts receivable less allowance for uncollectible accounts) will be \$804,440 on September 30, 2010.Management’s policy is to maintain ending finished goods inventory each month at a level equal to 30% of the next month’s budgeted sales. The finished goods inventory on September 30, 2010, is expected to be 5,040 units.
To make one unit of finished product, 4 pounds of materials are required. Management’s policy is to have enough materials on hand at the end of each month to equal 40% of the next month’s estimated usage. The raw materials inventory is expected to be 28,224 pounds on September 30, 2010.
The cost per pound of raw material is \$5, and 70% of all purchases are paid for in the month of purchase; the remainder is paid in the following month. The accounts payable for raw material purchases is expected to be \$106,344 on September 30, 2010.”

B. Prepare a schedule of cash collections from sales, by month and in total, for the fourth quarter of 2010.
C. Prepare a production budget in units, by month and in total, for the fourth quarter of 2010.
D. Prepare a materials purchases budget in pounds, by month and in total, for the fourth quarter of 2010.
E. Prepare a schedule of cash payments for materials, by month and in total, for the fourth quarter of 2010.

“Question 5)
Big Thunder Co. incurred the following costs during April:”

Raw materials purchased  43,410
Direct labor (\$13 per hour) 57,330   4410 Hours
Selling expenses 31210
Interest expense 6184

Manufacturing overhead is applied on the basis of \$16 per direct labor hour. Assume that overapplied or underapplied overhead is transferred to cost of goods sold only at the end of the year. During the month, 4,100 units of product were manufactured and 4,560 units of product were sold. On April 1 and April 30, Big Thunder Co. carried the following inventory balances:
Manufacturing overhead is applied on the basis of \$16 per direct labor hour. Assume that overapplied or underapplied overhead is transferred to cost of goods sold only at the end of the year. During the month, 4,100 units of product were manufactured and 4,560 units of product were sold. On April 1 and April 30, Big Thunder Co. carried the following inventory balances:

April 1
Raw Materials \$19,600
Work in process 52,500
Finished goods 41,000

April 30
Raw materials \$17,800
Work in process 56,700
Finished goods 22,050

A. Prepare a statement of cost of goods manufactured for the month of April.
B. Calculate the average cost per unit of product manufactured.
D. Prepare a traditional (absorption) income statement for Big Thunder Co. for the month of April. Assume that sales for the month were \$282,300 and the company’s effective income tax rate was 25%.