A company manufactured 50,000 units of a product at a cost of $500,000. It sold 45,000 units at $15 each. The gross profit is$225,000 Cost of Manufacturing 45,000 units = ($500,000 / 50,000 units) x 45,000 = $450,000 Gross Profit = Sales - Cost of Manufacturing = ($15 x 45,000) - $450,000 = $675,000 - $450,000 = $225,000What term is used to describe the process of monitoring operating results and comparing actual results with the expected results?ControllingCompute conversion costs given the following data: Direct Materials: $349,500 Direct Labor: $195,500 Factory Overhead: $185,000 Selling Expenses: $45,600$380,500 Conversion Costs = Direct Labor Cost + Factory Overhead Cost $195,500 + $185,000 = $380,500Smith Company reports the following information: Cost of Goods Manufactured: $69,000 Direct Materials Used: $30,000 Direct Labor Incurred: $26,000 Work in Process Inventory, January 1: $13,000 Factory Overhead is 75% of the cost of Direct Labor Work in Process Inventory on December 31 is$19,500 Work in Process Inventory on December 31 = Beginning Work in Process Inventory + Direct Materials Used + Direct Labor Incurred + Factory Overhead - Cost of Goods Manufactured $13,000 + $30,000 + $26,000 + ($26,000 x 75%) - $69,000 = $88,500 $88,500 - $69,000 = $19,500Which of the following are reported on the income statement as part of cost of goods?Cost of Goods ManufacturedWhich of the following accounts will be found on the income statement?Cost of Goods SoldAn example of a period cost isSales salaries expenseThe cost of a manufactured product generally consists of which of the following costs?Direct labor cost, Direct materials cost, and Factory Overhead costA company sells goods for $150,000 that cost $60,000 to manufacture. Which of the following statements is true?The company will decrease finished goods by $60,000Conversion costs areFactory Overhead and Direct LaborCost of goods manufactured is equal toTotal Manufacturing Costs plus Beginning Work in Process Inventory less Ending Work in Process InventoryWhich of the following will NOT be found on the balance sheet of a manufacturing company?Cost of Goods SoldGiven the following data: Cost of Materials Used: $50,000 Direct Labor Costs: $45,000 Factory Overhead: $38,000 Work in Process, Beg: $27,000 Work in Process, End: $19,000 Finished Goods, Beg: $30,000 Finished Goods, End: $16,000 What is the cost of goods sold?$155,000 Cost of Goods Sold = Work in Process, Beginning + Cost of Materials Used + Direct Labor Costs + Factory Overhead - Work in Process, Ending + Finished Goods, Beginning - Finished Goods, Ending $27,000 + $50,000 + $45,000 + $38,000 - $19,000 + $30,000 - $16,000 = $155,000Work in Process Inventory on December 31 is $45,000. Work in Process Inventory decreased by 40% during the year. Total Manufacturing Costs Incurred amount to $250,000. What is the Cost of Goods Manufactured?$280,000 Cost of Goods Manufactured = Beginning Work in Process Inventory + Total Manufacturing Costs Incurred - Ending Work in Process Inventory ($45,000 / 0.6) + $250,000 - $45,000 = $75,000 + $250,000 - $45,000 = $280,000What is the primary criterion for the preparation of managerial accounting reports?Manager needsWhich of the following manufacturing costs is an INDIRECT cost of producing a product?Oil lubricants used for factory machineryWhat term refers to the cost of changing direct materials into a finished manufactured product?Conversion costWhat term is used to describe the process of developing the organization's objectives and translating those into courses of action?PlanningManagerial accounting reports arePrepared according to management needsWhich of the following is most associated with managerial accounting?May rely on estimates and forecastsInformation for Jenson Company: Direct Materials Used: $345,000 Direct Labor Incurred: $250,000 Factory Overhead Incurred: $400,000 Operating Expenses: $195,000 Jenson Company's PERIOD costs are$195,000 Period costs include the operating expense which are expensed when incurred. They total $195,000 Product costs include direct materials, direct labor, and factory overheadFactory overhead includesIndirect labor and indirect materialsWhich of the following is an example of direct labor cost for a cell phone manufacturer?Cost of wages of assembly workerReplacing light fixtures with energy-efficient lighting is an example of which eco-friendly measure?Energy efficiencyA product cost isExpensed in the period the product is soldA company used $35,000 of Direct Materials, incurred $75,000 in Direct Labor Cost, and had $114,000 in Factory Overhead Costs during the period. If beginning and ending Work in Process Inventories were $28,000 and $32,000, respectively, the Cost of Goods Manufactured was$220,000 Cost of Goods Manufactured = Beginning Work in Process Inventories + Direct Materials + Direct Labor Cost + Factory Overhead Costs - Ending Work in Process Inventories $28,000 + $35,000 + $75,000 + $114,000 - $32,000 = $220,000Accounting designed to meet the needs of users who make decisions inside the business such as managers isManagerial accountingWhich of the following may NOT be a factory overhead cost?Materials used directly in the manufacturing process of the productFinished Goods Inventory is reported on theBalance sheet as a Current assetPrime costs areDirect Materials and Direct LaborWhich of the following accounts is NOT an example of a sustainable business activity?Reduction of employee idle timeWhich of the following are basic phases of the management process?Planning and ControllingPeriod costs includeOperating costs that are shown on the income statement in the period in which they are incurredInformation for Darwin Company: Sales: $76,500 Direct Materials Used: $7,300 Depreciation on Factory Equipment: $4,700 Indirect Labor: $5,900 Direct Labor: $10,500 Factory Rent: $4,200 Factory Utilities: $1,200 Sales Salaries Expense: $15,000 Office Salaries Expense: $9,000 Indirect Materials: $1,200 Darwin Company's period costs are$24,000 Period Costs = Sales Salaries Expense + Office Salaries Expense $15,000 + $9,000 = $24,000Which of the following items would NOT be classified as part of Factory Overhead?Direct Labor UsedWhat is the purpose of the Statement of Cost of Goods Manufactured?To determine the amount transferred to Finished GoodsThe cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished products is classified as aDirect Labor CostInformation for Darwin Company: Sales: $76,500 Direct Materials Used: $7,000 Depreciation on Factory Equipment: $4,500 Indirect Labor: $5,900 Direct Labor: $10,000 Factory Rent: $4,200 Factory Utilities: $1,200 Sales Salaries Expense: $15,600 Office Salaries Expense: $8,900 Indirect Materials: $1,200 Darwin Company's product costs are$34,000 Product Costs = Direct Materials Cost + Direct Labor Cost + Factory Overhead Cost $7,000 + $10,000 + $4,500 + $5,900 + $4,200 + $1,200 + $1,200 = $34,000Information taken from the financial records of Gunner Manufacturing: Cost of Materials Used: $43,000 Direct Labor Costs: $48,000 Factory Overhead: $38,000 Work in Process, Beg: $17,000 Work in Process, End: $28,000 What is the Cost of Goods Manufactured?$118,000 Cost of Goods Manufactured = Work in Process, Beginning + Cost of Materials Used + Direct Labor Costs + Factory Overhead - Work in Process, Ending $17,000 + $43,000 + $48,000 + $38,000 - $28,000 = $118,000Rent expense on a factory building would be treated as a(n)Product costThe controller's staff often consists of several management accountants. All of the following would most likely be on the controller's staff EXCEPTInvestments and shareholder relations managersChapter 19: Job Order CostingThomlin Company forecasts that total overhead for the current year will be $15,000,000 with 300,000 total machine hours. Year to date, the actual overhead is $16,300,000, and the actual machine hours are 330,000 hours. If Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date), the overhead is$200,000 Over-Applied Predetermined Overhead Rate = Estimated Total Overhead Costs / Estimated Activity Base $15,000,000 / 300,000 machine hours = $50 per machine hour Applied Overhead = Predetermined Overhead Rate x Actual Machine Hours $50 x 330,000 machine hours = $16,500,000 Over-Applied Overhead = Applied Overhead - Actual Overhead $16,500,000 - $16,300,000 = $200,000Period costs are classified as eitherSelling expenses or Administrative expensesCosts that are treated as assets until the product is sold areProduct costsRecording jobs completed would include a debit toFinished GoodsA manufacturing company applied Factory Overhead based on Direct Labor hours. At the beginning of the year, it estimated that Factory Overhead Costs would be $375,000 and Direct Labor hours would be 25,000. Actual Manufacturing Overhead Costs incurred were $377,200, and Actual Direct Labor hours were 30,000. What is the Predetermined Overhead Rate per Direct Labor hour?$15.00 Predetermined Overhead Rate = Estimated Total Factory Overhead Costs / Estimated Activity Base $375,000 / 25,000 Direct Labor hours = $15.00 per Direct Labor HourInformation for Adams Company: Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year. Below is a list of all the jobs for the quarter: Job No. Balance 356 $450 357 $1,235 358 $450 359 $695 360 $456 Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of $500 on each job. What is the ending balance of Finished Goods for Adams Company at the end of the first quarter?$1,145 Jobs 358 and 359 were completed during the quarter but NOT sold. Ending Balance of Finished Goods for Adams Company at End of First Quarter = Ending Balance of Job 358 + Ending Balance of Job 359 $450 + $695 = $1,145Information for Adams Company: Adams Company is a manufacturing company that has worked on several production jobs during the first quarter. Below is a list of all the jobs for the quarter: Job No. Balance 356 $450 357 $1,235 358 $378 359 $689 360 $475 Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of $500 on each job. What is the ending balance of Work in Process for Adams Company at the end of the first quarter?$475 Only Job No. 360 is still incomplete and hence will be considered Work in Process Therefore, the ending balance of Work in Process for Adams Company at the end of the first quarter is $475Jase Company allocates overhead based on a Predetermined Overhead Rate of $9.00 per Direct Labor hour. Job J904 required 8 tons of Direct Material at a cost of $600 per ton and took employees who earned $21 per hour a total of 80 hours to complete. What is the total cost of Job J904?$7,200 Direct Materials: 8 tons x $600 = $4,800 Direct Labor: 80 hours x $21 = $1,680 Manufacturing Overhead: 80 hours x $9 = $720 Total cost of J904: $4,800 + $1,680 + $720 = $7,200Recording jobs completed would include a credit toWork in ProcessReynolds Manufacturers Inc. has estimated Total Factory Overhead Costs of $95,000 and expected Direct Labor hours of 9,500 for the current fiscal year. If Job 117 incurs 2,500 Direct Labor hours, Work in Process will be debited and Factory Overhead will be credited for$25,000 Predetermined Factory Overhead Rate = Estimated Total Factory Overhead Costs / Estimated Activity Base $95,000 / 9,500 labor hours = $10 per labor hour Amount Credited to Factory Overhead = Predetermined Factory Overhead Rate x Direct Labor Hours $10 x 2,500 labor hours = $25,000During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $30,000 for general factory use. Factory overhead applied to production was $32,000. The entry to record the actual factory overhead costs incurred isWork in Process $30,000 Wages Payable $30,000For which of the following businesses would the Job Order Cost System be appropriate?Construction companyWhich types of inventories does a manufacturing business report on the Balance Sheet?Direct Materials Inventory, Work in Process Inventory, and Finished Goods InventoryA manufacturing company applies Factory Overhead based on Direct Labor Hours. At the beginning of the year, it estimated that Factory Overhead Costs would be $360,000 and Direct Labor Hours would be 30,000. Actual Factory Overhead Costs incurred were $375,500, and Actual Direct Labor Hours were 36,000. What is the amount of over-applied or under-applied manufacturing overhead at the end of the year?$56,500 over-applied Predetermined Overhead Rate = Estimated Total Factory Overhead Costs / Estimated Activity Base $360,000 / 30,000 Direct Labor Hours = $12 per Direct Labor Hour Applied Factory Overhead Costs = Predetermined Overhead Rate x Actual Direct Labor Hours $12 x 36,000 Direct Labor Hours = $432,000 Amount of Over-applied Overhead = Applied Factory Overhead Costs - Actual Factory Overhead Costs $432,000 - $375,000 = $56,500For which of the following businesses would the Process Cost System be appropriate?Paper millWhich of the following is a product cost?Drill bits for a drill press used in the plant assembly areaCosts that are incurred in generating revenues during the period, but are NOT involved in the manufacturing process, are referred to asPeriod costsThe materials requisition is used toRelease materials from the storeroom to the factoryThe recording of the application of factory overhead costs to jobs would include a credit toFactory OverheadWhich of the following would MOST likely use a Job Order Costing System?Construction companyCavy Company estimates that the Factory Overhead for the following year will be $1,250,000. The company has decided that the basis for applying Factory Overhead should be machine hours, which is estimated to be 40,000 hours. The machine hours for the month of April for all of the jobs were 4,780. If the Actual Factory Overhead totaled $143,000, determine the over- or under-applied amount for the month.$6,375 over-applied Predetermined Overhead Rate = Estimated Total Factory Overhead Costs / Estimated Activity Base $1,250,000 / 40,000 = $31.25 per machine hour Applied Factory Overhead Costs = Predetermined Overhead Rate x Actual Machine Hours $31.25 x 4,780 machine hours = $149,375 Amount of Over-Applied Overhead = Applied Factory Overhead - Actual Factory Overhead $149,375 - $143,000 = $6,375Winston Company estimates that the Factory Overhead for the following year will be $1,250,000. The company has decided that the basis for applying Factory Overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The Actual Factory Overhead Costs for the year were $1,385,000. Determine the over- or under-applied amount for the year.$27,500 under-applied Predetermined Overhead Rate = Estimated Total Factory Overhead Costs / Estimated Activity Base $1,250,000 / 50,000 = $25 per machine hour Applied Factory Overhead Costs = Predetermined Overhead Rate x Actual Machine Hours $25 x 54,300 machine hours = $1,357,500 Amount of Under-Applied Overhead = Actual Factory Overhead - Applied Factory Overhead $1,385,000 - $1,357,500 = $27,500Recording jobs shipped and customers billed would include a DEBIT toCost of Goods SoldJob Order Costing and Process Costing areCost Accounting SystemsDuring the period, Labor Costs incurred on account amounted to $175,000, including $150,000 for production orders and $35,000 for general factory use. In addition, Factory Overhead charged to production was $32,000. The entry to record the Direct Labor Costs isWork in Process $150,000 Wages Payable $150,000Aspen Technology has the following data: Estimated Direct Labor Hours: 15,000 Estimated Direct Labor Dollars: $90,000 Estimated Factory Overhead Costs: $200,000 If Factory Overhead is to be applied based on Direct Labor Hours, the predetermined overhead rate it$13.33 Predetermined Overhead Rate = Estimated Total Factory Overhead Costs / Estimated Activity Base $200,000 / 15,000 labor hours = $13.33 per Labor HourThe journal entry to record the transfer of 1,500 units of Part No. 1277, with a value of $2.60 each, to Work in Process isWork in Process $3,900 Materials $3,900 Number of Units x Unit Price 1,500 x $2.60 = $3,900 Debit Work in Process Credit MaterialsWhich of the following are the two main types of cost accounting systems for manufacturing operations?Job order cost and process cost systemsRecording jobs shipped and customers billed would include a CREDIT toFinished GoodsThe document authorizing the issuance of materials from the storeroom is aMaterials requisitionAt the end of the year, overhead applied was $42,300,000. Actual Overhead was $40,300,000. Closing over/under-applied overhead into Cost of Goods Sold would cause Net Income toIncrease by $2,000,000 Net Income will increase since overheads have been over-applied Increase in Net Income = Applied Overhead - Actual Overhead $42,300,000 - $40,300,000 = $2,000,000The entry to record the flow of Direct Labor Costs into production in a job order cost accounting system is toDEBIT Work in Process, CREDIT Wages PayableIn a job order cost accounting system, the entry to record the flow of Direct Materials into production is toDEBIT Work in Process, CREDIT MaterialsMaterials purchased on account during the month totaled $200,000. Materials requisitioned and placed in production totaled $175,000. The journal entry to record the material purchase on account isMaterials $200,000 Accounts Payable $200,000Thomlin Company forecasts that Total Factory Overhead for the current year will be $16,000,000 with 250,000 total machine hours. Year to date, the Actual Factory Overhead is $16,200,000, and the Actual Machine Hours are 330,000 hours. The Predetermined Overhead Rate based on machine hours is$64 per machine hour Predetermined Overhead Rate = Estimated Total Overhead Costs / Estimated Activity Base $16,000,000 / 250,000 machine hours = $64 per machine hourDuring the period, Labor Costs incurred on account amounted to $175,000, including $150,000 for production orders and $28,000 for general factory use. Factory Overhead Applied to production was $26,000. The entry to record the Factory Overhead Applied to production isWork in Process $26,000 Factory Overhead $26,000The Direct Labor and Overhead costs of providing services to clients are accumulated inWork in ProcessSanders Inc. has applied $566,755 of overhead to jobs in the cost ledger. Actual Overhead at the end of the year is $575,000. The adjustment for over- or under-applied overhead is$8,245 under-applied, increase Cost of Goods Sold Amount of Under-Applied Overhead = Actual Overhead - Applied Overhead $575,000 - $566,755 = $8,245 This will increase Cost of Goods SoldWhich of the following costs are NOT included in Finished Goods Inventory?Chief financial officer's salaryIn a Job Order Cost accounting system, when goods that have been ordered are received, the receiving department personnel count the goods, inspect the goods, and complete aReceiving reportA difference in quantity of materials used on two comparable jobs may be caused byD. All of these choices A. Inadequately trained employees B. Poor quality materials C. Employee carelessness D. All of these choicesThe journal entry to record the purchase of $45,555 of raw materials isMaterials $45,555 Accounts Payable $45,555Which of the following is a period cost?Salary of telephone receptionist in the sales officeWhen Job 117 was completed, Direct Materials totaled $4,600; Direct Labor, $5,600; and Factory Overhead, $2,400. A total of 1,000 units were produced at a per-unit cost of$12.60 Total Cost = Direct Materials + Direct Labor + Factory Overhead $4,600 + $5,600 + $2,400 =$12,600 Per Unit Cost = $12,600 / 1,000 units = $12.60Period costs areNot involved in the production processInformation for Adams Company: Job No. Balance 356 $475 357 $1,300 358 $378 359 $689 360 $456 Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of $500 on each job. What is the ending balance of Cost of Goods Sold for Adams Company at the end of the first quarter?$1,775 Jobs 356 and 357 were sold during the quarter Ending Balance of Cost of Goods Sold at End of First Quarter = Cost of Job 356 + Cost of Job 357 $475 + $1,300 = $1,775If the amount of Factory Overhead Cost incurred exceeds the amount applied, the Factory Overhead account will have aDebit balance and be under-appliedThe entries to record the cost and sale of a Finished Good on account isDEBIT Cost of Goods Sold CREDIT Finished Goods DEBIT Accounts Receivable CREDIT SalesA manufacturing company applied Factory Overhead based on Direct Labor Hours. At the beginning of the year, it estimated that Factory Overhead Costs would be $360,000 and Direct Labor Hours would be 30,000. Actual manufacturing Overhead Costs incurred were $377,200, and Actual Direct Labor Hours were 39,000. The entry to apply the Factory Overhead Costs for the year would include aCredit to Factory Overhead for $468,000 Predetermined Overhead Rate = Estimated Total Factory Overhead Costs / Estimated Activity Base $360,000 / 30,000 Direct Labor Hours = $12 per Direct Labor Hour Applied Factory Overhead Costs = Predetermined Overhead Rate x Actual Direct Labor Hours $12 x 39,000 Direct Labor Hours = $468,000Which of the following is the correct flow of manufacturing costs?Raw Materials, Work in Process, Finished Goods, Cost of Goods SoldChapter 20: Process Cost SystemsDepartment S had no Work in Process at the beginning of the period. It added 12,000 units of Direct Materials during the period at a cost of $96,000. During the period, 9,000 units were completed, and 3,000 units were 30% completed as to Labor and Overhead at the end of the period. All Materials are added at the beginning of the process. Direct Labor was $49,500, and Factory Overhead was $9,900. The total cost of units completed during the period was$126,000 Number of Equivalent Units for Conversion Costs during Period: 9,000 + (3,000 x 30%) = 9,900 units Direct Materials Cost: 9,000 x ($96,000 / 12,000) = $72,000 Direct Labor Cost: ($49,500 / 9,900) x 9,000 = $45,000 Factory Overhead: ($9,900 / 9,900) x 9,000 = $9,000 Total Cost of Units Completed During this Period: $72,000 + $45,000 + $9,000 = $126,000Department K had 4,000 units 45% completed in process at the beginning of the period, 17,000 units were completed during the period, and 1,200 units 40% completed at the end of the period. What was the number of Equivalent Units of Production for the period for Conversion if the First-In, First-Out method is used to cost inventories? Assume the completion percentage applies to both Direct Materials and Conversion Cost.15,680 Equivalent Units: (4,000 x 55%) + (17,000 - 4,000) + (1,200 x 40%) = 15,680 unitsThe following production data were taken from the records of the Finishing Department for June: Inventory in Process, June 1 (30% completed): 4,000 units Completed Units during June: 65,000 units Ending Inventory (60% completed): 8,000 units What is the number of Conversion Equivalent Units of Production in the June 30 Finishing Department Inventory, assuming that the First-In, First-Out method is used to cost inventories?4,800 units Equivalent Units: 8,000 x 60% = 4,800 UnitsWhen a firm adopts lean manufacturing,Machinery and equipment are moved into small autonomous production lines called manufacturing cellsThe following production data were taken from the records of the Finishing Department for June: Inventory in Process, June 1, 25% completed: 1,500 Units Transferred to Finished Goods during June: 5,000 Units Equivalent Units of Production during June: 5,400 Units Determine the number of Equivalent Units of Production in the June 30, Finishing Department inventory, assuming that the First-In, First-Out method is used to cost inventories. The completion percentage of 25% applies to both Direct Materials and Conversion Costs.775 units Number of Equivalent Units in Ending Inventory: 5,400 - (1,500 x 75%) - (5,000 - 1,500) = 775 unitsWhich of the following would use a Process Costing System?Lumber mill The cost accounting system used by process manufacturers is called the process cost system. A process cost system records product costs for each manufacturing department or processDepartment S had 500 units 60% Completed in process at the Beginning of the period, 8,000 units Completed During the period, and 600 units 30% Completed at the End of the period. What was the Number of Equivalent Units of Production for the period for Conversion if the First-In, First-Out method is used to cost inventories? Assume the completion percentage applies to both Direct Materials and Conversion Cost7,880 Equivalent Units: (500 x 40%) + (8,000 - 500) + (600 x 30%) = 7,880 unitsAll of the following are characteristics of a process cost system EXCEPTThe system accumulates costs per jobThe portion of whole units that were completed with respect to either Materials or Conversion Costs within a given accounting period is the definition ofEquivalent UnitsBlue Lake Water Company has 2 departments, Purifying and Bottling. The Bottling Department received 76,000 liters from the Purifying Department. During the period, the Bottling Department completed 74,000 liters, including 2,000 liters of Work in Process at the Beginning of the period. The Ending Work in Process was 5,000 liters. How many liters were Started and Completed during the period?72,000 Liters Started and Completed during Period: 74,000 units - 2,000 units = 72,000 unitsThe following production data were taken from the records of the Finishing Department for June: Inventory in Process, June 1 (30% completed): 4,000 units Completed Units during June: 65,000 units Ending Inventory (60% complete): 8,000 units What is the number of Material Equivalent Units of Production in the June 30, Finishing Department inventory, assuming that the First-In, First-Out method is used to cost inventories and Materials were added at the Beginning of the process?8,000 units Equivalent Units = Number of Units of Direct Materials in Ending Inventory = 8,000 unitsWhich of the following costs incurred by a tool manufacturer would NOT be included in Conversion Costs?Raw steel Conversion Costs include Direct Labor and Factory Overhead. It does NOT include Direct Materials such as raw steelWhich of the following best describes the effect on Direct Labor when management adopts a lean production process?Workers are often cross-trained to perform more than one functionA process cost system would be appropriate for aNatural gas refineryWhich of the following measures would NOT help managers to control and improve operations?Commissions paid per time periodIn the manufacture of 10,000 units of a product, Direct Materials Cost incurred was $165,000. Direct Labor Cost incurred was $105,000, and Applied Factory Overhead was $56,000. What is the total Conversion Cost?$161,000 Total Conversion Cost = Direct Labor + Factory Overhead $105,000 + $56,000 = $161,000In the manufacture of 8,000 units of a product, Direct Materials Cost incurred was $154,600. Direct Labor Cost incurred was $88,000, and Applied Factory Overhead was $45,500. What is the total Conversion Cost?$133,500 Total Conversion Cost: $88,000 + $45,500 = $133,500Department S had no Work in Process at the Beginning of the period. It added 12,000 units of Direct Materials During the period at a cost of $84,000. During the period, 9,000 units were Completed, and 3,000 units were 30% Completed as to Labor and Overhead at the End of the period. All Materials are added at the Beginning of the process. Direct Labor was $47,500, and Factory Overhead was $9,900. The total Conversion Costs for the period were$57,400 Total Conversion Costs for Period: $47,500 + $9,900 = $57,400The debits to Work in Process - Assembly Department for April, together with data concerning production, are as follows: April 1, Work in Process: Materials cost, 3,000 units: $7,200 Conversion costs, 3,000 units, 40% completed: $6,000 Materials added during April, 10,000 units: $25,000 Conversion costs during April: $30,800 Goods Finished during April, 12,500 units: $0 April 30 Work in Process, 1,000 units, 40% completed: $0 All Direct Materials are added at the Beginning of the process, and the First-In, First-Out method is used to cost inventories. The Conversion Cost per Equivalent Unit for April is$2.63 Equivalent Units: (3,000 x 60%) + (12,500 - 3,000) + (1,000 x 40%) = 11,700 units Conversion Cost per Equivalent Unit: $30,800 / 11,700 = $2.63 per unitWhich of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs?Assembly labor's wagesThe cost system BEST suited to industries that manufacture a large number of identical units of commodities on a continuous basis isProcessLean manufacturing is a business philosophy that focuses on reducing time and cost and eliminating poor quality. This is accomplished in manufacturing and non-manufacturing processes byCombining processing functions into work centers and cross-training workers to perform more than one functionDepartment W had 2,400 units, one-third Completed at the Beginning of the period. 16,000 units were Transferred to Department X from Department W during the period and, 1,900 units were on-half Completed at the End of the period. Assume the completion ratios apply to Direct Materials and Conversion Costs. What is the Total Number of Units to be Assigned Costs on the Cost of Production Report for Department W?17,900 units Number of Units to be Assigned Costs: 2,400 units + (16,000 - 2,400) units + 1,900 units = 17,900 unitsIn a process cost system, the amount of Work in Process Inventory is valued byAllocating departmental costs between completed and partial completed unitsDepartment R had 5,000 units in Work in Process that were 75% completed as to Labor and Overhead at the Beginning of the period. During the period, 30,000 units of Direct Materials were Added, 33,000 units were Completed, and 3,000 units were 40% Completed as to Labor and Overhead at the End of the period. All Materials are added at the Beginning of the process. The First-In, First-Out method is used to cost inventories. The Number of Equivalent Units of Production for Conversion Costs for the period was30,450 Number of Equivalent Units for Conversion Costs during Period: (5,000 units x 25%) + (32,000 units - 5,000 units) + (3,000 units x 40%) = 30,450 unitsIn a process cost system, the cost of completed production in Department A is transferred to Department B by which of the following entries?DEBIT: Work in Process - Dept. B CREDIT: Work in Process - Dept. ADepartment G had 3,600 units 25% completed at the Beginning of the period. 11,000 units were completed During the period. 3,000 units were 20% completed at the End of the period, and the following manufacturing costs were Debited to the departmental Work in Process account During the period: Work in Process, Beg. of period: $40,000 Costs added During period: Direct Materials (10,400 units at $8): $83,200 Direct Labor: $63,000 Factory Overhead: $25,000 All Direct Materials are placed in process at the Beginning of production, and the First-In- First-Out method of inventory costing is used. What is the Total Cost of the units Started and Completed During the period? Do not round unit calculations.$120,060 Number of Equivalent Units for Conversion Costs during Period: (3,600 x 75%) + (11,000 - 3,600) + (3,000 x 20%) = 10,700 units Number of Units Started and Completed during Period: 11,000 - 3,600 = 7,400 units Direct Materials Cost: 7,400 x $8 = $59,200 Total Conversion Cost: [($63,000 + $25,000) / 10,700] x 7,400 = $60,860 Total Cost of Units Started and Completed during Period: $59,200 + $60,860 = $120, 060In process cost accounting, the costs of Direct Materials and Direct Labor are charged directly toProcessing departmentsLean manufacturing attempts to significantly reduceWaste and simplify the production processWhich of the following is NOT a characteristic of a process cost system?The system measures costs for each completed jobWhich of the following is NOT a use of the Cost of Production report?To project productionFor which of the following businesses would a process cost system be appropriate?Shampoo manufacturerEquivalent Production Units are generally determined forDirect Materials and Conversions CostsDepartment W had 2,400 units, one-third completed at the Beginning of the period. 15,000 units were transferred to Department X to Department W During the period, and 1,800 units were one-half completed at the End of the period. Assume the completion ratios apply to Direct Materials and Conversion Costs. Determine the Equivalent Units of Production used to compute the Unit Conversion Cost on the Cost of Production Report for Department W. Assume the company uses FIFO.15,100 units Equivalent Units for Conversion Costs: (2,400 x 66.67%) + (15,000 - 2,400) + (1,800 x 50%) = 15,100 unitsThe two categories of cost comprising conversion costs areDirect Labor and Factory OverheadThe three categories of manufacturing costs comprising the Total Cost of Work in Process are Direct Labor, Direct Materials, andFactory OverheadProcess and job order cost systems are similar in all of the following ways EXCEPTBoth use job order cost cardsWhich of the following is NOT included in conversion costs?Direct MaterialsThe debits to Work in Process - Assembly Department for April, together with data concerning production, are as follows: April 1, Work in Process: Materials cost, 3,000 units: $7,200 Conversion costs, 3,000 units, 60% completed: $6,000 Materials added during April, 12,000 units: $25,000 Conversion costs during April: $35,750 Goods Finished during April, 12,000 units: 0 April 30 Work in Process, 1,000 units, 40% completed: 0 All Direct Materials are added at the Beginning of the process, and the First-In, First-Out method is used to cost inventories. The Materials Cost per Equivalent Unit for April is$2.08 Materials Cost per Equivalent Unit: $25,000 / 12,000 = $2.08 per unitDepartment A had 6,000 units in Work in Process that were 60% Completed as to Labor and Overhead at the Beginning of the period. 34,000 units of Direct Materials were Added During the period. 31,000 units were Completed During the period, and 8,000 units were 80% Completed as to Labor and Overhead at the End of the period. All materials are added at the Beginning of the process. The First-In, First-Out method is used to cost inventories. The Number of Equivalent Units of Production for Conversion Costs for the period was33,800 Equivalent Units: (6,000 x 40%) + (31,000 - 6,000) + (8,000 x 80%) = 33,800 units

ACC - Chapter 18, 19, & 20

Other sets by this creator

Recommended textbook solutions

Fundamentals of Financial Management, Concise Edition

Essentials of Investments

Century 21 Accounting: General Journal

Accounting: What the Numbers Mean

Other Quizlet sets