acct505 week 2 quiz 1 job order and process costing systems

1. Question : (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:

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.

less than the number of units completed.

Instructor Explanation:

Chapter 4

Points Received: 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 Percent Complete with respect to Conversion

Beginning work in process inventory

11,000 90%

Started in production during June

58,000

Ending work in process inventory

17,000 10%

According to the company's records, the conversion cost in beginning work in process inventory was $79,893 at the beginning of June. Additional conversion costs of $343,830 were incurred 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:

+ Work in progress, beginning

11,000

+ Units started into production during the month 58,000

- Work in process, ending 17,000= Units completed and transferred out during the month $52,000

Equivalent Units of Production

Conversion

Transferred to next department 52,000Ending work in process (conversion: 17,000 units x 10% complete 1,700Equivalent units of production 53,700

Cost per Equivalent Unit

Conversion

Cost of beginning work in process $79,893Cost added during the period 343,830Total cost (a) 423,723 Equivalent units of production (b) 53,700Cost per equivalent unit (a) / (b) $7.891


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:

Units Material Cost

Beginning work in process

30,000 $22,000

Started during the month

80,000 $72,000

Units completed 85,000 Ending work in process

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


To solve for ending work in process:

+ Work in process, beginning

30,000

+ Units started into production during the month 80,000- Units completed and transferred out during the month 85,000= Work in process, ending 25,000

Equivalent Units of Production

Materials

Transferred to next department 85,000Ending work in process (conversion: 25,000 units x 10% complete) 25,000Equivalent units of production 110,000

Cost per Equivalent Unit

Conversion

Cost of beginning work in process $22,000Cost added during the period 72,000Total cost (a) $94,000 Equivalent units of production (b) 110,000Cost per equivalent unit (a) / (b) $0.85


Comments:

4. Question : (TCO F) Which of the following accounts is debited when direct labor is recorded?

Student Answer:Work in process

Salaries and wages expense

Salaries and wages payable

Manufacturing overhead


Chapter 3


Comments:

5. Question : (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 journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a:

Student Answer:debit to Manufacturing Overhead of $79,000.

credit to Manufacturing Overhead of $79,000.

credit to Work in Process of $75,000.

debit to Work in Process of $75,000.


Chapter 3


Comments:

6. Question : (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:

Student Answer:debit to Finished Goods of $65,000.

credit to Cost of Goods Sold of $65,000.

credit to Work in Process of $60,000.

credit to Finished Goods of $60,000.


Chapter 3


Comments:

1. Question : (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 manufacturerii. Contract printer that produces posters, books, and pamphlets to orderiii. Natural gas production companyiv. Dairy farmv. Coal mining companyvi. Specialty coffee roaster (roasts small batches of specialty coffee beans)

For each company, indicate whether the company is most likely to use job-order costing or process costing.

Student Answer:

i. Process Costing ii. Job-order Costing iii. Process Costing iv. Process Costing v. Process costing vi. Job-order Costing


i. Brick manufacturer Process Costingii. Contract printer that produces Job Order Costing

posters, books, and pamphlets to order iii. Natural gas production company Process Costingiv. Dairy farm Process Costingv. Coal mining company Process Costingvi. Specialty coffee roaster (roasts small batches of specialty coffee beans)

Job Order Costing


Comments:

2. Question : (TCO F) Job 827 was recently completed. The following data have been recorded on its job cost sheet:

Direct materials

$61,050

Direct labor hours 1,332 labor hoursDirect labor wage rate $14 per labor-hourMachine Hours 1,480 machine hoursNumber of units completed 3,700 units

The company applies manufacturing overhead on the basis of machine-hours. 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:

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

$61,050

Direct labor ($14 per DLH, 1,332 DLHs) 18,648Manufacturing Overhead ($13 per MH, 1,480 MHs) 19,240Total Cost $98,938Unit Product Cost $26.74


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 Materials Conversion

Work in process. Jan. 1 (80% complete with respect to conversion costs)

100,000 $100,000 $157,500

Units started into production 500,000Costs added during the year: Materials $650,000 Conversion $997,500 Units completed during the year

450,000

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:

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 =======



Comments:

4. Question : (TCO F) Weisinger Corporation has provided the following data for the month of January:

Inventories Beginning EndingRaw materials $28,000 $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 $87,000 Manufacturing overhead cost incurred $51,000

Indirect materials included in manufacturing overhead costs incurred $3,000

Manufacturing overhead cost applied to work in process $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 =======



Comments:

acct505 week 2 quiz 1 job order and process costing systems

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