The following information is from the materials requisitions and time tickets for Job 9-1005 completed by Great Bay Boats. The requisitions are identified by code numbers starting with the letter Q and the time tickets start with W. At the start of the year, management estimated that overhead cost would equal 110% of the direct labor cost for each job.
| Data | Document | Amount |
|---|---|---|
| 7/1/2015 | Q-4698 | $1,250 |
| 7/1/2015 | W-3393 | $600 |
| 7/5/2015 | Q-4725 | $1,000 |
| 7/5/2015 | W-3479 | $450 |
| 7/10/2015 | W-3559 | $300 |
Determine the total cost on the job cost sheet for Job 9-1005.
Job 593 was recently completed. The following data have been recorded on its job cost sheet:
| Direct materials | $2,474 |
| Direct labor-hours | 73 labor-hours |
| Direct labor wage rate | $19 per labor-hour |
| Machine-hours | 134 machine-hours |
The Corporation applies to manufacture overhead on the basis of machine hours. The predetermined overhead rate is $20 per machine hour.
The total cost that would be recorded on the job cost sheet for Job 593 would be:
a. $7,381
b. $3,865
c. $6,541
d. $3,861
The following information pertains to Baxter Company for 2014. What is the dollar amount of difference in net income using FIFO versus LIFO?
| Beginning inventory | 55 units @ $15 |
| Units purchased | 260 units @ $19 |
Ending inventory consisted of 27 units. Baxter sold 288 units at $31 each. All purchases and sales were made with cash.
In a period of deflation (i.e. the per unit cost of inventory purchases decreases over time), which inventory method will produce the highest ending inventory balance for that period assuming not all inventory is sold?
a. FIFO
b. LIFO
c. Moving Average
d. All methods would generate the same ending inventory balance.
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