17 terms

Cost Accounting Ch.18 Problems

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Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.

37. What are the respective direct material costs per equivalent unit, assuming spoiled units are recognized or ignored?
a. $20.00; $35.00
b. $25.00; $40.00
c. $30.00; $45.00
d. $35.00; $50.00
b
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.

38. What is the direct material cost assigned to good units completed when spoilage units are recognized?
a. $50,000
b. $100,000
c. $80,000
d. $87,500
d
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.

39. What is the cost transferred out assuming spoilage units are ignored?
a. $87,500
b. $80,000
c. $50,000
d. $77,500
b
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.

40. What are the amounts allocated to the work-in-process ending inventory assuming spoilage units are recognized and ignored, respectively?
a. $20,000; $24,500
b. $30,000; $34,250
c. $12,500; $20,000
d. $37,500; $40,000
c
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.


41. Spoilage costs allocated to ending work in process are larger by which method and by how much?
a. When spoiled units are recognized by $2,500
b. When spoiled units are recognized by $4,250
c. When spoiled units are ignored by $7,500
d. When spoiled units are recognized by $7,500
c
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:

WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)

Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000

42. What is the number of total spoiled units?
a. 1,600 units
b. 2,000 units
c. 2,700 units
d. 3,600 units
d
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:

WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)

Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000

43. Normal spoilage totals
a. 1,600 units.
b. 2,000 units.
c. 1,920 units.
d. 2,700 units
c
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:

WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)

Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000


44. Abnormal spoilage totals
a. 1,600 units.
b. 2,000 units.
c. 1,680 units.
d. 1,920 units.
c
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:

WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)

Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000


45. What is the total cost per equivalent unit using the weighted-average method of process costing?
a. $3.00
b. $3.60
c. $6.60
d. $4.60
c
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:

WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)

Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000



46. What cost is allocated to abnormal spoilage using the weighted-average process-costing method?
a. $ 0
b. $ 7,360
c. $11,088
d. $16,400
c
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:

WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)

Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000


47. What are the amounts of direct materials and conversion costs assigned to ending work in process using the weighted-average process-costing method?
a. $18,720; $24,000
b. $22,900; $19,820
c. $24,000; $18,720
d. $28,560; $14,160
c
Cartwright Custom Carpentry manufactures chairs in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection, some units are spoiled due to nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:

WIP, beginning inventory 3/1/20x3 30,000 units
Direct materials (100% complete)
Conversion costs (89.5% complete)

Started during March 80,000 units
Completed and transferred out 86,000 units

WIP, ending inventory 3/31/20x3 20,000 units
Direct materials (100% complete)
Conversion costs (75% complete)

Costs:
WIP, beginning inventory:
Direct materials $ 70,000
Conversion costs 40,000
Direct materials added 160,000
Conversion costs added 120,000

50. What are the normal and abnormal spoilage units, respectively, for March when using FIFO?
a. 2,580 units; 1,420 units
b. 1,950 units; 1,390 units
c. 1,690 units; 1,050 units
d. 1,420 units; 2,000 units
a
Cartwright Custom Carpentry manufactures chairs in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection, some units are spoiled due to nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:

WIP, beginning inventory 3/1/20x3 30,000 units
Direct materials (100% complete)
Conversion costs (89.5% complete)

Started during March 80,000 units
Completed and transferred out 86,000 units

WIP, ending inventory 3/31/20x3 20,000 units
Direct materials (100% complete)
Conversion costs (75% complete)

Costs:
WIP, beginning inventory:
Direct materials $ 70,000
Conversion costs 40,000
Direct materials added 160,000
Conversion costs added 120,000


51. What costs would be associated with normal and abnormal spoilage, respectively, using the FIFO method of process costing?
a. $5,890.64; $9,133.20
b. $5,890.64; $5,826.00
c. $6,469.64; $7,690.36
d. $9,133.20; $5,026.80
d
Cartwright Custom Carpentry manufactures chairs in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection, some units are spoiled due to nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:

WIP, beginning inventory 3/1/20x3 30,000 units
Direct materials (100% complete)
Conversion costs (89.5% complete)

Started during March 80,000 units
Completed and transferred out 86,000 units

WIP, ending inventory 3/31/20x3 20,000 units
Direct materials (100% complete)
Conversion costs (75% complete)

Costs:
WIP, beginning inventory:
Direct materials $ 70,000
Conversion costs 40,000
Direct materials added 160,000
Conversion costs added 120,000


52. What costs are allocated to the ending work-in-process inventory for direct materials and conversion costs, respectively, using the FIFO method of process costing?
a. $38,250; $24,850
b. $40,000; $23,100
c. $40,000; $21,590
d. $49,500; $13,600
b
Cartwright Custom Carpentry manufactures chairs in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection, some units are spoiled due to nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:

WIP, beginning inventory 3/1/20x3 30,000 units
Direct materials (100% complete)
Conversion costs (89.5% complete)

Started during March 80,000 units
Completed and transferred out 86,000 units

WIP, ending inventory 3/31/20x3 20,000 units
Direct materials (100% complete)
Conversion costs (75% complete)

Costs:
WIP, beginning inventory:
Direct materials $ 70,000
Conversion costs 40,000
Direct materials added 160,000
Conversion costs added 120,000


53. Which of the following journal entries correctly represents the transfer of completed goods for the current period using the FIFO method of process costing?
a. Finished Goods $ 10,560.28
Loss from Spoilage $ 10,560.28
b. Loss from Spoilage $ 5,026.80
Finished Goods $ 5,026.80
c. Finished Goods $327,251.00
Work in Process $327,251.00
d. Finished Goods $401,700.00
Work in Process $401,700.00
c
58. The Harleysville Manufacturing Shop produces motorcycle parts. Typically, 10 pieces out of a job lot of 1,000 parts are spoiled. Costs are assigned at the inspection point, $50.00 per unit. Spoiled pieces may be disposed of at $10.00 per unit. The spoiled goods must be inventoried appropriately when the normal spoilage is detected. The current job requires the production of 2,500 good parts.

Which of the following journal entries properly reflects the recording of spoiled goods?
a. Materials Control $ 200
Manufacturing Overhead Control $ 800
Work-in-Process Control $1,000
b. Materials Control $ 250
Manufacturing Overhead Control $1,000
Work-in-Process Control $1,250
c. Work-in-Process Control $1,250
Materials Control $ 250
Manufacturing Overhead Control $1,000
d. Manufacturing Overhead Control $1,000
Materials Control $ 200
Work-in-Process Control $ 800
b
59. The Harleysville Manufacturing Shop produces motorcycle parts. Typically, 10 pieces out of a job lot of 1,000 parts are spoiled. Costs are assigned at the inspection point, $50.00 per unit. Spoiled pieces may be disposed of at $10.00 per unit. The spoiled goods must be inventoried appropriately when the normal spoilage is detected. Job 101 requires the production of 2,500 good parts.

Which of the following journal entries would be correct if the spoilage occurred due to specifications required for Job 101?
a. Work-in-Process Control $100
Materials Control $100
b. Materials Control $100
Work-in-Process Control $100
c. Materials Control $250
Work-in-Process Control $250
d. Work-in-Process Control $250
Materials Control $250
c
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