Review for Midterm

Review for midterm Note: You must be able to perform calculations, make decisions under various alternative situation. Simply knowing the definition is not sufficient to earn good grade. Chapter 1 Management functions Manufacturing costs Cost classifications Prepare Cost of goods Manufactured schedules/Cost of goods sold statements Cost of goods sold statements : Calculate missing amounts from given data set Ethical issues Chapter 2 Difference between Job costing and process cost systemCost flow in Job order costing (Cost accumulation and assignment by cost elements), including journal entries Be able to calculate applied manufacturing overhead/under-over applied manufacturing overhead from given data, including adjustments of under-over applied overhead Chapter 3* Cost flow in process cost system Be able to prepare production cost report and its components Analyze Production cost report Compute missing data within the production cost report *Only Weighted average method Chapter 5 Kn ow cost behavior, identify types of costs from given data set and why it is so important Relevant rangeApply High-low method to determine fixed/variable cost CVP: Assumptions of CVP analysis Be able to prepare CVP income statement Compute Contribution margin, and contribution margin ratio What is Break-even point Be able to complete break-even analysis under different scenario Include Target net income with break-even analysis, Margin of safety Review problem 1. Temp Range Company prepared the following income statement for 2014: TEMP RANGE COMPANY Income Statement For the Year Ended December 31, 2014 ——————————————————————————————————————————— Sales (5,000 units)$200,000 Variable expens es 75,000Contribution margin125,000 Fixed expenses 83,200 Net income$ 41,800 Instructions Answer the following independent questions and show computations to support your answers. 1. What is the company’s break-even point in units? 2. How many units would the company have had to sell to earn a target net income of $33,000 in 2014? 3. If the company expects a 65% increase in sales volume in 2015, what would be the expected net income in 2015? 4. How much sales (in dollars) would the company have to generate in order to earn a target net income of $288,000 in 2015? #2: Job order costingSandro Clean uses a job order cost accounting system. On October 1, the company has a balance in Work in Process Inventory of $4,200 and two jobs in process: Job No. R92, $1,600 and Job No. R93, $2,600. During October, a summary of source documents reveals the following: ForMaterials Requisition SlipsLabor Time Tickets Job No. R92$ 2,200$ 7,100 Job No. R931,7004,100 Job No. R944,7003,300 Job No. R952,2005,100 General Use 1,800 2,000 $12,600$21,600 Sandro applies manufacturing overhead to jobs at an overhead rate of 90% of direct labor cost. Job No. R92 was completed during the month.Instructions (a)Prepare summary journal entries to record the requisition slips, time tickets, the assignment of manufacturing overhead to jobs, and the completion of Job No. R92. Show computations. (b)Answer the following questions. 1. What is the balance in Work in Process Inventory at October 31? 2. If Sandro incurred $13,000 of manufacturing overhead in addition to indirect labor and indirect materials, was overhead over- or underapplied in October and by how much? Cost of Goods Manufactured and Sold Selected account balances of Santana Manufacturing Company appear below for 2014:Beginning of YearEnd of Year Finished Goods Inventory$15,000$ 17,000 Work In Process Inventory22,00021,000 Raw Materials Inventory13,00019,000 Sales380,000 Direct Labor43,000 Factory Supervisory Salaries17,000 Incom e Tax Expense32,000 Factory Insurance18,000 Raw Material Purchases93,000 Administrative Expenses12,000 Sales Returns and Allowances3,000 Factory Depreciation8,000 Indirect Labor14,000 Selling Expenses44,000 Instructions Using the above information for Santana Manufacturing Company, Prepare Cost of goods sold statement. Support your answers with clearly identified computations.