Midterm1 Spr2010

Terrific taffy makes delicious salt water taffy sugar

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Unformatted text preview: TerrificTaffy to answer questions 27 through 30. Terrific Taffy makes delicious salt water taffy. Sugar and other raw materials are added at the beginning of processing. Conversion takes place evenly as the taffy is pulled until it is a chewy consistency. Data from the month of March follows. Pounds Beginning work in process inventory Taffy started during the period Ending work in process inventory (60% complete) 1,500 pounds 12,000 pounds 3,500 pounds Costs Beginning work in process inventory Direct materials Conversion Total 14,000 12,000 $26,000 Costs added in March Direct materials added in March Direct labor added in March Manufacturing Overhead Total 20,000 17,750 4,000 $41,750 27. Compute Terrific’s equivalent units for direct materials. 6A:002 Spring 2010 – Midterm 1 Page 14 28. Compute Terrific’s equivalent units for conversion costs. 29. Ignore your answers to questions 27 and 28. Instead assume that there are 12,000 equivalent units for direct materials and 10,000 equivalent units for conversion. Compute Terrific’s cost per equivalent unit for conversion costs. 30. Ignore your calculations of cost per equivalent unit. Instead assume that the cost assigned to completed units is $18,000. Compute the amount of cost assigned to ending work in process inventory. 6A:002 Spring 2010 – Midterm 1 Page 15 Use the following information about SunDial to answer questions 31 through 37. SunDial manufactures travel clocks and watches. Overhead costs are currently allocated using direct labor cost as the allocation basis. SunDial’s controller has recommended switching to an activity based costing system and has collected the following information about the two products for the last fiscal year. Product Travel Clocks Watches Totals Total Units Produced 6,000 4,000 10,000 Total Direct Materials Cost $120,000 84,000 $204,000 Total Direct Labor Cost $72,000 56,000 $128,000 Production Runs 15 25 40 Parts per unit 14 29 43 Total Parts Used 84,000 116,000 200,000 The controller also collected the following information about activities during the last fiscal year. Activity Production run set-up Materials Handling Total overhead cost Cost of Activity $40,000 120,000 $160,000 Allocation Base Number of p...
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