114.The Kwanika Co. operates in a lean manufacturing environment. During its first year of operations, Kwanikabudgeted for 40,000 hours in the production of 100,000 units in its cell X-22. Material costs were $7 per unit. CellX-22 conversion costs were budgeted for the year as follows:
Direct and indirect labor
$ 900,000
Machine depreciation
125,000
Maintenance and supplies
375,000
Utilities
225,000
Total
$1,625,000
During January, material for 8,400 units was purchased on account. There were 8,200 units manufactured and8,000 were sold shipped to customers for $35 each. Journalize: (a) the material purchases; (b) the application ofconversion costs; (c) the transfer from work in process to finished goods; and (d) the sales (were made onaccount) and associated cost of goods sold for the month of January.
Quality Control Activities
Activity Cost
Product testing
$55,000
Assessing vendor quality
26,000
Recalls
18,000
Rework
29,000
Scrap disposal
8,000
Product design
30,000
Training machine operators
46,000
Warranty work
12,000
Process audits
22,000
115.From the above schedule, calculate the (a) value-added and (b) non-value-added costs.
116.From the above schedule, calculate the (a) prevention and (b) appraisal costs.
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