Exercise 1 The company plans to produce 6,000 pieces of a single type of product in the month of June. According to the standards, direct material is set at 900 CZK per piece and direct wages at 560 CZK per piece. The budgeted production overhead is CZK 1,800,000, the budgeted administrative overhead is CZK 960,000. Compile a preliminary estimate of the product at the level of own performance costs. Exercise 2 The following costs were accounted for (see following table). • Calculate your own costs for 1 bottle of 0.7 l. 966,500 liters of cider were produced These costs per month were accounted for Costs CZK Material consumption 650 400 Wages of production workers 130 800 Overheads 228 200 Total production costs 1 009 400 Exercise 3 Chiphard Works collects its cost data using the job-order cost system. For Job 123, the following data are available. Direct Materials 7/14 Issued $1,200 7/20 Issued 650 7/25 Issued 350 $2,200 Direct Labour Week of July 20 180 hours / $6.50 Week of July 26 140 hours / $7.25 Factory overhead is applied at the rate of $4.50 per direct labour hour. We will compute a) the cost of Job 123 and b) the sales price of the job, assuming that it was contracted with a mark-up of 40 percent of cost. Exercise 4 Two companies have prepared the following budgeted data for the year 2023: Company X Company Y Predetermined rate based on Machine hours Direct labour cost Budgeted overhead $200,000 $240,000 Budgeted machine hours 100,000 Budgeted direct labour cost $160,000 Predetermined overhead rate $2 per machine hour 150 % of direct labour cost Assume that actual overhead costs and the actual level of activity for 2023 for each firm are shown as follows: Company X Company Y Actual overhead costs $198,000 $256,000 Actual machine hours 96,000 Actual direct labour cost $176,000 Note that for each company, the actual cost and activity data differ from the budged figures used in calculating the predetermined overhead rate. The computation of the resulting underapplied and overapplied overhead for each company is provided below: Exercise 5 A company uses a budgeted overhead rate in applying overhead to production orders on a labour cost basis for Department A and on a machine hour basis for Department B. At the beginning of the year, the company made the following predictions: Department A Department B Total Budgeted factory overhead $72,000 $75,000 $147,000 Budgeted direct labour cost $64,000 $17,500 $81,500 Budgeted machine hours 500 10,000 10,500 During the month of January, the cost record for a job order, No. 105, which was processed through both departments, shows the following: Department A Department B Total Materials issued $30 $45 $75 Direct labour cost $36 $25 $61 Machine hours 6 15 21 a) Calculate the predetermined overhead rates for each department b) Calculate the total applied overhead for job order No. 105 c) Assume that job order No. 105 consisted of 30 units of product. What is the total cost and unit cost of the job order? Exercise 6 Refer to example 1 and assume that the company uses a single plan-wide rate based on direct labour costs. What is a) the total applied overhead for job order No. 105 and b) the total cost and unit cost of the job order? Exercise 7 Determine the costing of the costing unit if you know the following data: Total Per unit Direct wages 350 000 CZK Direct wages 50 CZK Overheads 1 225 000 CZK Direct material 125 CZK Machine hours 2 500 hours Direct energy 35 CZK Machine hours 0,15 hours In the calculation of costs, we will use an allocation base, namely: 1. Direct wages 2. Machine hours