1. ASHFORD ACC 206 Week 3 Chapter Four and
Five Problems
PLEASE DOWNLOAD HERE
Chapter 4 and 5 Problems. Please complete the following 7 exercises below in
either Excel or a word document (but must be single document). You must show
your work where appropriate (leaving the calculations within Excel cells is
acceptable). Save the document, and submit it in the appropriate week using the
Assignment Submission button.
Chapter 4 Exercise 3
3. Cost flows and overhead application
Cleveland Metals uses a job cost system and applies factory overhead to
production at a predetermined rate of 180% of direct labor cost. Data pertaining to
recent operations follow.
Job no. 636 was the only job in process on January 1 of the current year. The
Work in Process account contained a $24,600 balance on this date.
Jobs no. 637, 638, and 639 were started during January.
Total direct material requisitions and direct labor incurred during January
amounted to $89,200 and $114,500, respectively.
The only job that remained in process on January 31 was job no. 638, with costs
of $15,000 for direct materials and $20,000 for direct labor.
a. Compute the total cost of the work in process inventory on January 31.
b. Compute the cost of jobs completed during January, and present the proper
journal entry to reflect job completion.
Chapter 4 Exercise 7
7. Overhead application: Working backward
The Towson Manufacturing Corporation applies overhead on the basis of
machine hours. The following divisional information is presented for your review:
FIND THE UNKNOWNS FOR EACH OF THE DIVISIONS.

2. Chapter 4 Problem 2
2. Computations using a job order system
General Corporation employs a job order cost system. On May 1 the following
balances were extracted from the general ledger;
Work in process $ 35,200
Finished goods 86,900
Cost of goods sold 128,700
Work in Process consisted of two jobs, no. 101 ($20,400) and no. 103 ($14,800).
During May, direct materials requisitioned from the storeroom amounted to
$96,500, and direct labor incurred totaled $114,500. These figures are subdivided
as follows:
Document*
Date
Department
Hours
Amount
MR 1165
19-Mar
Machining
—
$5,600
MR 1169
21-Mar
Machining
—
3,500
TT 1450-52

3. 23-Mar
Machining
45
400
MUR 46
23-Mar
Machining
105
—Job no. 115 was the only job in process at the end of the month. Job no. 101
and three "other" jobs were sold during May at a profit of 20% of cost. The "other"
jobs contained material and labor charges of $21,000 and $17,400, respectively.
General applies overhead daily at the rate of 150% of direct labor cost as labor
summaries are posted to job orders. The firm's fiscal year ends on May 31.
Instructions:
a. Compute the total overhead applied to production during May.
b. Compute the cost of the ending work in process inventory.
c. Compute the cost of jobs completed during May.
d. Compute the cost of goods sold for the year ended May 31.
Chapter 5 Exercise 1
1. High-low method The following cost data pertain to 19X6 operations of
Heritage Products:
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Shipping costs
$58,200

4. $58,620
$60,125
$59,400
Orders shipped
120
140
175
150
The company uses the high-low method to analyze costs.
a. Determine the variable cost per order shipped.
b. Determine the fixed shipping costs per quarter.
c. If present cost behavior patterns continue, determine total shipping costs for
19X7 if activity amounts to 570 orders.
Chapter 5 Exercise 2 The treasurer anticipates the following costs for the event,
which will be held at the Regency Hotel:
Chapter 5 Exercise 3
3. Break-even and other CVP relationships
Cedars Hospital has average revenue of $180 per patient day. Variable costs are
$45 per patient day; fixed costs total $4,320,000 per year.
a. How many patient days does the hospital need to break even?
b. What level of revenue is needed to earn a target income of $540,000?
c. If variable costs drop to $36 per patient day, what increase in fixed costs can
be tolerated without changing the break-even point as determined in part (a)?
Chapter 5 Problem 6
6. Direct and absorption costing
The information that follows pertains to Consumer Products for the year ended
December 31, 19X6.

5. Inventory, 1/1/X6
24,000 units
Units manufactured
80,000
Units sold
82,000
Inventory, 12/31/X6
? units
Manufacturing costs:
Direct materials
$3 per unit
Direct labor
$5 per unit
Variable factory overhead
$9 per unit
Instructions:
a. Compute the number of units in the ending inventory.
b. Calculate the cost of a unit assuming use of:
1. Direct costing.
2. Absorption costing.
c. Prepare an income statement for the year ended December 31, 19X6, by using
direct costing.
d. Prepare an income statement for the year ended December 31, 19X6, by using
absorption costing