(TCO F) Assume there is no beginning work in process inventory and the ending work in process inventory is 100% complete with respect to materials costs. The number of equivalent units with respect to materials costs under the weighted-average method is:
1. Question :
Student Answer:
the same as the number of units put into production. less than the number of units put into production. the same as the number of units completed.
Instructor Explanation: Points Received:
less than the number of units completed. Chapter 4 0 of 5
Comments: 2. Question :
(TCO F) Luft Company uses the weighted-average method in its process costing system. Operating data for the first processing department for the month of June appear below:
Units Beginning work in process inventory Started in production during June Ending work in process inventory
11,000
Percent Complete with respect to Conversion 90%
58,000 17,000
10%
According to the company's records, the conversion co st in beginning work in process inventory was $79,893 at the beginning of June. Additional conversion costs of $343,830 were incurr ed in the department during the month. What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)
Student Answer:
$8.070 $7.891 $5.928 $4.584
To solve for units transferred: Instructor Explanation:
+ Work in progress, beginning + Units started into production during the month - Work in process, ending
11,000 58,000 17,000
= Units completed and transferred out during the month
$52,000
Equivalent Units of Production Transferred to next department Ending work in process (conversion: 17,000 units x 10% complete Equivalent units of production
Conversion 52,000 1,700 53,700
Cost per Equivalent Unit Conversion $79,893 343,830 423,723
Cost of beginning work in process Cost added during the period Total cost (a) Equivalent units of production (b) Cost per equivalent unit (a) / (b)
Points Received:
53,700 $7.891
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Comments: 3. Question :
(TCO F) Unizat Corporation uses the weighted-average method in its process costing system. The following information pertains to one of the company's processing departments for a recent month:
Beginning work in process Started during the month Units completed Ending work in process
Units 30,000
Material Cost $22,000
80,000
$72,000
85,000 25,000
All materials are added at the beginning of the process. The cost per equivalent unit for materials is closest to:
Student Answer:
$0.86 $0.90 $1.10 $1.18
Instructor
Explanation:
To solve for ending work in process: + Work in process, beginning + Units started into production during the month - Units completed and transferred out during the month = Work in process, ending
30,000 80,000 85,000 25,000
Equivalent Units of Production Transferred to next department Ending work in process (conversion: 25,000 units x 10% complete) Equivalent units of production
Materials 85,000 25,000 110,000
Cost per Equivalent Unit Cost of beginning work in process Cost added during the period Total cost (a)
Conversion $22,000 72,000 $94,000
Equivalent units of production (b) Cost per equivalent unit (a) / (b)
Points Received:
110,000 $0.85
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Comments: 4. Question : Student Answer:
(TCO F) Which of the following accounts is debited when direct labor is recorded? Work in process Salaries and wages expense Salaries and wages payable
Instructor Explanation: Points Received:
Manufacturing overhead Chapter 3 5 of 5
Comments: 5. Question :
Student Answer:
(TCO F) Stickles Corporation incurred $79,000 of actual Manufacturing Overhead costs during August. During the same period, the Manufacturing Overhead applied to Work in Process was $75,000. The ournal entry to record the incurrence of the actual Manufacturing Overhead costs would include a: debit to Manufacturing Overhead of $79,000. credit to Manufacturing Overhead of $79,000.
credit to Work in Process of $75,000.
Instructor Explanation: Points Received:
debit to Work in Process of $75,000. Chapter 3
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Comments: 6. Question : Student Answer:
(TCO F) During February, Degan Inc. transferred $60,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $65,000. The journal entries to record these transactions would include a: debit to Finished Goods of $65,000. credit to Cost of Goods Sold of $65,000. credit to Work in Process of $60,000.
Instructor Explanation:
Points Received: Comments: 1. Question :
credit to Finished Goods of $60,000. Chapter 3
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(TCO F) Whether a company uses process costing or job-order costing depends on its industry. A number of companies in different industries are listed below: i. Brick manufacturer ii. Contract printer that produces posters, books, and pamphlets to order iii. Natural gas production company iv. Dairy farm v. Coal mining company vi. Specialty coffee roaster (roasts small batches of specialty coffee beans) For each company, indicate whether the company is most likely to use ob-order costing or process costing.
Student Answer: Instructor Explanation:
i. Process Costing ii. Job-order Costing iii. Process Costing iv. Process Costing v. Process costing vi. Job-order Costing i. Brick manufacturer ii. Contract printer that produces posters, books, and pamphlets to order iii. Natural gas production company iv. Dairy farm v. Coal mining company vi. Specialty coffee roaster (roasts small batches of specialty coffee beans)
Process Costing Job Order Costing Process Costing Process Costing Process Costing Job Order Costing
Points Received:
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Comments: 2. Question :
(TCO F) Job 827 was recently completed. The following data have been recorded on its job cost sheet:
Direct materials Direct labor hours Direct labor wage rate Machine Hours Number of units completed
$61,050 1,332 labor hours $14 per labor-hour 1,480 machine hours 3,700 units
The company applies manufacturing overhead on the basis of machinehours. The predetermined overhead rate is $13 per machine-hour. Compute the unit product cost that would appear on the job cost sheet for this job.
Student Answer:
Instructor Explanation:
Points Received:
Direct Materials.............................................$61,050 Direct Labor (1,332 x $14)...........................$18,648 Manufacturing Overhead (1,480 x $13).........$19,240 --------- Total Product Cost........................................$98,938 Unit Product Cost ($98,938 / 3,700 units) = $26.74 per unit Direct materials Direct labor ($14 per DLH, 1,332 DLHs) Manufacturing Overhead ($13 per MH, 1,480 MHs) Total Cost Unit Product Cost
$61,050 18,648 19,240 $98,938 $26.74
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Comments: 3. Question :
(TCO F) Miller Company manufactures a product for which materials are added at the beginning of the manufacturing process. A review of the company's inventory and cost records for the most recently completed year revealed the following information: Units
Work in process. Jan. 1 (80% complete with respect to conversion costs) Units started into production Costs added during the year: Materials Conversion Units completed during the
100,000
Materials
$100,000
Conversion
$157,500
500,000 $650,000 $997,500 450,000
year
The company uses the weighted-average cost method in its process costing system. The ending inventory is 50% complete with respect to conversion costs. Required: i. Compute the equivalent units of production and the cost per equivalent units for materials and for conversion costs. ii. Determine the cost transferred to finished goods. iii. Determine the amount of cost that should be assigned to the ending work in process inventory.
Student Answer:
Instructor Explanation: Points Received:
i. Equivalent units of production for materials and conversion costs. Materials Conversion Units completed and transferred out...........450,000 450,000 Ending work in process: Materials (150,000 x 100%)......................150,000 Conversion (150,000 x 50%).......................................75,000 -----------------------Equivalent units of production....................600,000 525,000 ===== ====== Ending work in process: Work in process beginning....................100,000 Units started in production...................500,000 --------- Total work in process for the period......600,000 Less: Units completed..........................450,000 ---------- Ending work in process........................150,000 ii. Cost transferred to finished goods. Materials cost per equivalent unit: (100,000+ 650,000)/ 600,000 = $1.25 per equivalent unit Conversion cost per equivalent unit: (157,500+997,500) / 525,000 = $2.2 per equivalent unit Cost transferred out 450,000 x (1.25+2.2)=$1,552,500 ======== iii.Cost assigned to ending work in process inventory Materials costs: 150,000 x $1.25 = $187,500 Conversion costs: (150,000 x 50%) x $2.2) = $165,000 -------------- Cost assigned to ending work in process inventory $352,500 =======
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Comments: 4. Question :
(TCO F) Weisinger Corporation has provided the following data for the month of January:
Inventories
Beginning Raw materials
$28,000
Ending $29,000
Work In process
$16,000
$14,000
Finished goods
$42,000
$54,000
Additional Information Raw material purchases
$56,000
Direct labor costs Manufacturing overhead cost incurred
$87,000 $51,000
Indirect materials included in manufacturing overhead costs incurred Manufacturing overhead cost applied to work in process
$3,000 $55,000
Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.
Student Answer:
Weisinger Corporation Schedule of Cost of Goods Manufactured January 2013 Direct Materials: Raw Materials Inventory, beginning.......................$28,000 Add:Raw materials purchases.................................56,000 --------- Total Materials available.........................................$84,000 Deduct: Raw materials inventory, ending................(29,000) ---------- Raw materials use in production............................$55,000 Deduct: Indirect materials included in manufacturing overhead costs incurred........................................(3,000)........$52,000 Direct Labor................................................................................87,000 Manufacturing overhead cost applied to work in process..............55,000 --------- Total manufacturing cost..........................................................$194,000 Add: Beginning work in process inventory.....................................16,000 ---------Total Work in process for the period............................................$ 21,000 Deduct: Ending work in process inventory...................................(14,000) ---------- Cost of Goods Manufactured.....................................................$196,000 ====== Weisinger Corporation Cost of Goods Sold January 2013 Finished Goods Inventory Beginning......................................$42,000 Add: Goods of Goods Manufactured.....................................196,000 ---------- Cost of Goods available for sale...........................................$238,000
Deduct: Finished goods inventory ending...............................(54,000) ---------- Unadjusted cost of goods sold..............................................$184,000 Deduct: over applied overhead.................................................(4,000) ----------Adjusted Cost of Goods Sold................................................$180,000 ======= Instructor Explanation:
Points Received: Comments:
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