ABC Manufacturing Co. reported the following production costs for the 12 months January through December.
MonthTotal production costsUnits producedJanuary$450,000350February290,000220March490,000330April525,000390May550,000410June325,000240July450,000290August450,000320September525,000380October240,000150November710,000450December500,000350
Perform the following:
- Perform a regression analysis using Excel.
- Using the results from the regression analysis, use the cost equation in the form
Y = f + vX.
- Assume that ABC Manufacturing Co. will produce 450 units next month. Calculate total production costs for the month using the regression analysis method.
- Using the data in Table 1, use the high-low method to calculate total production costs. Assume that ABC Manufacturing will produce 400 units.
- Using the data in Table 1, use the scatterplot method to calculate total production costs. Assume that ABC Manufacturing will produce 500 units.
Gonzalez Tortilla Corporation produces tortillas in large batches and uses a process costing system. Three departments—Mixing, Rolling, and Packaging—are involved in the production process. Gonzalez Tortilla has the following transactions:
- Direct materials totaling $25,000—$7,500 for the Mixing department, $6,250 for the Rolling department, and $11,250 for the Packaging department—are requisitioned and placed in production.
- Each production department incurs the following direct labor costs (wages payable):
- Manufacturing overhead costs are applied to each department as follows:
- Products with a cost of $6,875 are transferred from the Mixing department to the Rolling department.
- Products with a cost of $8,000 are transferred from the Rolling department to the Packaging department.
- Products with a cost of $11,375 are completed and transferred from the Packaging department to the finished goods warehouse.
- Products with a cost of $10,375 are sold to customers.
Perform the following steps for each transaction:
- Prepare a journal entry to record the transaction.
- Summarize the flow of costs through T-accounts. Use the format presented in Figure 4.2, “Flow of Product Costs in a Process Costing System” (no need to include T-accounts for raw materials inventory, wages payable, or manufacturing overhead). Assume that there are no beginning balances in the work-in-process inventory, finished goods inventory, and cost of goods sold accounts.
- Assugnment 3
In a one-page ”journal”, consider process costing and the flow of costs through accounts used in a process costing system. Describe what equivalent units are and how equivalent units are calculated.
Provide at least two scholarly sources.
- Assignment 4. Daniel’s Paint Company uses the weighted average method to account for costs of production. Daniel’s manufactures base paint in two separate departments—Mixing and Packaging. The following information is for the Mixing department for the month of March.
- A total of 42,000 units (measured in gallons) were in beginning work-in-process (WIP) inventory. All were completed and transferred out during March.
- A total of 73,500 units were started during March. Regarding the 73,500 units started, consider the following information:
- 21,000 units were completed and transferred out to the Packaging department (100% complete with respect to direct materials, direct labor, and overhead).
- In addition, 52,500 units were partially completed and remained in ending WIP inventory on March 31 (90% complete for direct materials, 70% complete for direct labor, and 30% complete for overhead, which is applied based on machine hours).
- Costs in beginning WIP inventory totaled $240,450 (= $102,900 in direct materials + $43,050 in direct labor + $94,500 in overhead).
- Costs incurred during March totaled $173,250 (= $73,500 in direct materials + $36,750 in direct labor + $63,000 in overhead).
Perform the following:
- Use the four key steps to assign costs to units completed and transferred out and to units in ending WIP inventory for the Mixing department.