ACC 220 Chapter 4-6

Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. An average of 2,100 cups are sold each month. What is the break-even sales dollars? a. $1,300 b. $1,715 c. $1,788 d. $3,129

$1,715

Walbin Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in a particular department consisted of 12,000 units, 100% complete with respect to materials cost and 20% complete with respect to conversion costs. The total cost in the beginning work in process inventory was $39,400. A total of 42,000 units were transferred out of the department during the month. The costs per equivalent unit were computed to be $2.40 for materials and $4.50 for conversion costs. The total cost of the units completed and transferred out of the department was:

$289,800

Darden Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 18,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $16,200. An additional 84,000 units were started into production during the month. There were 17,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of $836,880 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to: A.$8.286 B.$9.963 C.$9.000 D.$8.804

$8.804

Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. An average of 2,100 cups are sold each month. What is the CM Ratio for Coffee Klatch? a. 1.319 b. 0.758 c. 0.242 d. 4.139

0.758

Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. An average of 2,100 cups are sold each month. What is the break-even sales in units? a. 872 cups b. 3,611 cups c. 1,200 cups d. 1,150 cups

1,150 cups

Tript Corporation has a process costing system and uses the weighted-average method. The company had 3,000 units in work in process on February 1 that were 60% complete with respect to conversion costs. During the month, 10,000 units were completed. At the end of the month, 4,000 units remained in work in process that were 40% complete with respect to conversion costs. Materials are added at the beginning of the process.The equivalent units for February for conversion costs were: A.9,800 B.11,200 C.11,600 D.12,800

11,600

Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36. The average fixed expense per month is $1,300. Use the formula method to determine how many cups of coffee would have to be sold to attain target profits of $2,500 per month? a. 3,363 cups b. 2,212 cups c. 1,150 cups d. 4,200 cups

3,363 cups

The Assembly Department started the month with 24,000 units in its beginning work in process inventory. An additional 309,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 29,000 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month?

304,000

Jersey Corporation has a process costing system in which it uses the weighted-average method. The equivalent units for conversion costs for the month were 47,500 units. The beginning work in process inventory consisted of 15,000 units, 60% complete with respect to conversion costs. The ending work in process inventory consisted of 10,000 units, 75% complete with respect to conversion costs. The number of units started during the month was: A.34,000 units B.25,000 units C.40,000 units D.35,000 units

35,000 units

Bims Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 2,000 units in its beginning work in process inventory that were 70% complete with respect to conversion costs. An additional 61,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 18,000 units in the ending work in process inventory of the Assembly Department that were 60% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month?

55,800

The clerical activity associated with processing purchase orders to produce an order for a standard product is an example of a: A.Product-level activity. B.Unit-level activity. C.Facility-level activity. D.Batch-level activity.

Batch-level activity.

Property taxes are an example of a cost that would be considered to be: A.Unit-level. B.Batch-level. C.Facility-level. D.Product-level.

Facility-level.

True or False: Activity-based costing uses a number of activity cost pools, each of which is allocated to products on the basis of direct labor-hours.

False

True or False: Companies use three common approaches to assign overhead costs to products - plantwide overhead rate, departmental overhead rates and activity -based costing. The most accurate of there there approaches is usually the departmental overhead rates.

False

True or False: When a company changes from a traditional costing system to an activity-based costing system, the unit product costs of high-volume products typically change more than the unit product costs of low-volume products.

False

True or False: When materials are purchased in a process costing system, a work in process account is debited with the cost of the materials.

False

All of the following statements are correct when referring to process costing except: A.Process costing would be appropriate for a jeweler who makes custom jewelry to order. B.Units produced are indistinguishable from each other. C.Costs are accumulated by department. D.A process costing system has the same basic purposes as a job-order costing system.

Process costing would be appropriate for a jeweler who makes custom jewelry to order.

True or False: Batch level activities are performed each time a batch of goods is processed. The cost of a batch level activity does not depend on the number of units in the batch.

True

True or False: The units in beginning work in process inventory plus the units started into production must equal the units transferred out of the department plus the units in ending work in process inventory.

True

True or False: When a a company changes from a traditional costing system to an activity-based costing system, the unit product costs of low-volume products typically increase more than the unit product costs of high volume products decrease.

True

Assembling a product is an example of a: A.Unit-level activity. B.Product-level activity. C.Facility-level activity. D.Batch-level activity.

Unit-level activity.

When computing the cost per equivalent unit, the weighted-average method of process costing considers:

costs incurred during the current period plus cost of beginning work in process inventory.

When computing the cost per equivalent unit, the weighted-average method of process costing considers: A.costs incurred during the current period only. B.costs incurred during the current period plus cost of beginning work in process inventory. C.costs incurred during the current period plus cost of ending work in process inventory. D.costs incurred during the current period less cost of beginning work in process inventory.

costs incurred during the current period plus cost of beginning work in process inventory.

Assume there was no beginning work in process inventory and the ending work in process inventory is 70% complete with respect to conversion costs. Under the weighted-average method, the number of equivalent units of production with respect to conversion costs would be: A.less than the units started during the period. B.the same as the units completed. C.the same as the units started during the period. D.less than the units completed.

less than the units started during the period.

Departmental overhead rates may not correctly assign overhead costs due to: A.difficulties associated with identifying cost pools for the first stage of the allocation process. B.overreliance on volume as a basis for allocating overhead costs where products differ regarding the number of units produced, lot size, or complexity of production. C.the use of direct labor hours in allocating overhead costs to products rather than machine time or quantity of materials used. D.the high correlation between direct labor-hours and the incurrence of overhead costs.

overreliance on volume as a basis for allocating overhead costs where products differ regarding the number of units produced, lot size, or complexity of production.

Malcolm Company uses a weighted-average process costing system. All materials at Malcolm are added at the beginning of the production process. The equivalent units for materials at Malcolm would be the sum of: A.units in beginning work in process and the units started. B.units in ending work in process and the units started and completed. C.units in ending work in process and the units started. D.units in beginning work in process and the units started and completed.

units in beginning work in process and the units started.

Overhead allocation based solely on a measure of volume such as direct labor-hours: A.must be used for external financial reporting. B.is a key aspect of the activity-based costing model. C.will systematically overcost low-volume products and undercost high-volume products. D.will systematically overcost high-volume products and undercost low-volume products.

will systematically overcost high-volume products and undercost low-volume products.