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Computational Questions

Q1. Alvis Construction Supply Company has a department that manufactures wood trusses (wood
frames used in the construction industry). The following information is to produce these trusses
for the month of February:
Work-in-process inventory, February 1 4,000 trusses
Direct materials cost: 100% complete $100,000
Conversion: 20% complete $150,000
Units started during February 18,000 trusses
Units completed during February and transferred out 17,000 trusses
Work-in-process inventory, February 29
Direct materials: 100% complete
Conversion cost: 40% complete
Costs incurred during February
Direct materials $ 59,500
Conversion $ 92,250
Using the FIFO method, calculate the following:
a. Costs per equivalent unit.
b. Cost of goods completed and transferred.
c. Cost of the ending work-in-process inventory.
Q2. A company's most recent contribution format income statement is shown below:

Prepare a new contribution format income statement under each of the following conditions
(consider each case independently):
a. The selling price decreases by 60 cents per unit, and the number of units sold increases
by 30%.
b. The selling price increases by 70 cents per unit, fixed expenses increase by $12,000, and
the number of units sold decreases by 6%.
Q3. Sinclair Corp. uses a job-order costing system with a plantwide overhead rate based on
machine-hours. At the beginning of the year, the company made the following estimates:
Machine hours required to support estimated production 150,000
Fixed manufacturing cost $750,000
Variable manufacturing overhead cost per machine hour $4.00
a. Compute the predetermined manufacturing overhead rate.

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b. During the year, Job 600 was started and completed. The following information was
available with respect to this job:
Direct materials cost $3,500
Direct labor cost $2,300
Machine hours used 300
Compute the total manufacturing cost assigned to Job 600.

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