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(TCO F) Computing unit product costs involves averaging in:

1. (TCO F) Computing unit product costs involves averaging in:

Job-Order Costing
Process Costing

A
Yes
No


B
Yes
Yes


C
No
Yes


D
No
No


(Points : 5)
Choice A.
Choice B.
Choice C.
Choice D.


2. (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.) (Points : 5)
$8.070
$7.891
$5.928
$4.584


3. (TCO F) Lucas Company uses the weighted-average method in its process costing system. The company adds materials at the beginning of the process in the Forming Department, which is the first of two stages in its production process. Information concerning operations in the Forming Department in October follows:

Units
Material Cost

Work in process on October 1
6,000
$3,000

Units started in October
50,000
$25,560

Units completed and transferred to next Department during October
44,000




What was the materials cost of work in process at on October 31? (Points : 5)
$3,060
$5,520
$6,000
$6,120


4. (TCO F) In a job-order costing system, the use of direct materials that have been previously purchased is recorded as a debit to: (Points : 5)
Raw Materials Inventory.
Work in Process Inventory
Finished Goods Inventory
Manufacturing Overhead


5. (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: (Points : 5)
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.


6. (TCO F) Valles Corporation had $22,000 of raw materials on hand on February 1. During the month, the company purchased an additional $75,000 of raw materials. The journal entry to record the purchase of raw materials would include a: (Points : 5)
credit to Raw Materials of $97,000.
debit to Raw Materials of $97,000.
credit to Raw Materials of $75,000.
debit to Raw Materials of $75,000.

1. (TCO F) Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. A number of companies in different industries are listed below:

i. Specialty coffee roaster (roasts small batches of specialty coffee beans)
ii. Custom aircraft builder
iii. Brick manufacturer
iv. Microbrewery that produces a number of different beers
v. Steel company making chain link fences from iron ore
For each company, indicate whether the company is most likely to use job-order costing or process costing. (Points : 15)



2. (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 hours

Direct labor wage rate
$14 per labor-hour

Machine Hours
1,480 machine hours

Number 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. (Points : 15)



3. (TCO F) Harmon Company uses the weighted-average method in its process costing system. The Curing Department of Harmon Company reported the following information for the month of November.

Units Percentage complete with respect to conversion
Work in process, November 1 10,000 80%
Units started 28,000
Completed and transferred out 30,000
Work in process, November 30 8,000 30%


Costs for November Materials Conversion
Work in process, November 1 $34,500 $48,600
Added during the month $146,000 $194,400

All materials are added at the beginning of the process.

Required: Compute the following items using the weighted-average method:

i. The equivalent units of production for materials.

ii. The cost per equivalent unit for conversion.

iii. The total cost assigned to units transferred out of the Curing Department during November.

iv. The cost assigned to work in process inventory as of November 30. (Points : 15)



4. (TCO F) Burkhammer Inc. has provided the following data for the month of August. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
Work in Process
Finished Goods
Cost of Goods Sold
Total

Direct Materials
$2,260
$12,180
$81,480
$95,920

Direct Labor
$1,900
$14,500
$97,000
$113,400

Manufacturing overhead applied
$1,590
$6,890
$44,520
$53,000

Total
$5,750
$33,570
$223,000
$262,320





Manufacturing overhead for the month was underapplied by $9,000.

The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.

Determine the cost of work in process, finished goods, and cost of goods sold AFTER allocation of the underapplied or overapplied overhead for the period. (Points : 15)


This question was asked on Jan 13, 2013.

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