Question

Linkoln company inventory BUS 511 CASE 2 CPA BEC S3 A production supervisor for Linkoln Company is comparing his budget to actuals for inventory components in May. He has asked you to prepare two documents which will be sent to the division finance officer. The first is a cost of goods manufactured statement which will require you to derive the individual components of total manufacturing costs. The second is a one-page analysis document which will highlight specific sensitivities and relative comparison points. Using the information included within the exhibit, complete the table below for the month ended May, Year 6.

• For Part I, calculate the required costs identified in column A, and enter your associated response rounded to whole numbers in column B. If a response is zero, enter a zero (0).

• For Part II, use the option list provided and enter your response in column B for each situation. AB 1 2 3 PART I Cost Item Amount Raw materials used 1 Direct labor Overhead applied 4 5 1 2 3 4 5 6 7 AB AB PART II Situation Answer Relative to raw materials used, raw materials purchased are: Relative to cost of goods sold, cost of goods manufactured is: If labor hours budgeted were 21,000 hours, cost of goods sold would be: If actual labor hours were 20,200, manufacturing costs would be: If ending finished goods inventory totaled 68,450, the impact on cost of goods manufactured would be:

Answer 1

Allocation of Cost of service departments using Direct method.
From	Maintenance	Personnel	Printing	Developing
Service Department costs	$          3,000.00	$       13,000.00	$        14,100.00	$          11,200.00
Maintenance allocation	$        (3,000.00)		$             750.00	$            2,250.00
Personnel allocation		$      (13,000.00)	$          1,625.00	$          11,375.00
Totals	$                    -	$                    -	$        16,475.00	$          24,825.00
Workings :
Maintenance allocation
Printing : $3000 * 1700 /(1700+5100)	$             750.00
Developing : $3000 * 5100 /(1700+5100)	$          2,250.00
Personnel allocation
Printing : $13000*500/(500+3500)	$          1,625.00
Developing : $13000*3500/(500+3500)	$        11,375.00