ACC 206 Week Three AssignmentPlease complete the following five exercises below in either Excel or a word document (but must be singledocument). You must show your work where appropriate (leaving the calculations within Excel cells isacceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button.1. Overhead application: Working backwardThe Towson Manufacturing Corporation applies overhead on the basis of machine hours. The followingdivisional information is presented for your review:Actual machine hoursEstimated machine hoursOverhead application rateActual overheadEstimated overheadApplied overheadOver- (under-) appliedoverheadDivisionA22,50020,000$4.50$110,000???DivisionB??$5.00?$90,000$86,000$6,500FIND THE UNKNOWNS FOR EACH OF THE DIVISIONS.2. Computations using a job order systemGeneral Corporation employs a job order cost system. On May 1 the following balances were extracted from thegeneral ledger;Work in process$ 35,200Finished goods86,900Cost of goods sold128,700Work in Process consisted of two jobs, no. 101 ($20,400) and no. 103 ($14,800). During May, direct materialsrequisitioned from the storeroom amounted to $96,500, and direct labor incurred totaled $114,500. These figuresare subdivided as follows:ADirect MaterialsJob No.Amount101$5,00011519,50011636,200Other35,800$96,500Direct LaborJob No.Amount101$7,80010320,80011542,00011618,000Other25,900$114,500Job no. 115 was the only job in process at the end of the month. Job no. 101 and three “other” jobs were soldduring 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 joborders. 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 31.3. High-low methodThe following cost data pertain to 20X6 operations of Heritage Products:Quarter 1Shipping costsOrders shipped$58,200120Quarter 2$58,620140The 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.Quarter 3$60,125175Quarter 4$59,400150Ac. If present cost behavior patterns continue, determine total shipping costs for 20X7 if activity amounts to570 orders.4. Break-even and other CVP relationshipsCedars Hospital has average revenue of $180 per patient day. Variable costs are $45 per patient day; fixed coststotal $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 withoutchanging the break-even point as determined in part (a)?5. Direct and absorption costingThe information that follows pertains to Consumer Products for the year ended December 31, 20X6.Inventory, 1/1/X6Units manufacturedUnits soldInventory, 12/31/X6Manufacturing costs:Direct materialsDirect laborVariable factory overheadFixed factory overheadSelling & administrative expenses:VariableFixed24,000 units80,00082,000? units$3 per unit$5 per unit$9 per unit$280,000$2 per unit$136,000The unit selling price is $26. Assume that costs have been stable in recent years.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, 20X6, by using direct costing.d. Prepare an income statement for the year ended December 31, 20X6, by using absorption costing.
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