Managerial Accounting (Quiz #3)

Department G had 3,600 units, 40% completed at the beginning of the period, 12,000 units were completed during the period, 2,000 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, beginning of period $ 60,000 Costs added during period: Direct materials (10,400 at $9.8365) 102,300 Direct labor 79,800 Factory overhead 25,200 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, the materials and conversion cost per unit (rounded to the nearest cent), respectively, are

$9.84 and $9.58 Equivalent Units for Direct Materials = (12,000 - 3,600) + 2,000 = 10,400 units Equivalent Units for Conversion Cost = (3,600 × 60%) + (12,000 - 3,600) + (2,000 × 20%) = 10,960 units Material Cost per Equivalent Unit = $102,300 / 10,400 = $9.84 per unit Material Cost per Equivalent Unit = $105,000 / 10,960 = $9.58 per unit

Zang Co. manufacturers its products in a continuous process involving two departments, Machining and Assembly. Journalize the entries to record the following transactions related to production during June: If an amount box does not require an entry, leave it blank.

a. Materials purchased on account, $180,000 D: Materials 180000 C: Accounts Payable 180000 b. Materials requisitioned by: Machining, $73,000 direct and $9,000 indirect materials; Assembly, $4,900 indirect materials. D: Works in process- machining 73000 D: Factory Overhead-Machining 9000 D: Factory Overhead-Assembly: 4900 C: Materials 86900 c. Direct labor used by Machining, $23,000; Assembly, $47,000. D: Work in Process-Machining 23000 D: Work in Process-Assembly 47000 C: Wages Payable 70000 d. Depreciation expenses: Machining, $4,500; Assembly, $7,800. D: Factory Overhead-Machining 4500 D: Factory Overhead-Assembly 7800 C:Accumulated Depreciation 12300 e. Factory overhead applied: Machining, $9,700; Assembly, $11,300. D: Work in Process-Machining 9700 D: Work in Process-Assembly 11300 C: Factory Overhead-Machining 9700 C: Factory Overhead-Assembly 11300 f. Machining Department transferred $98,300 to Assembly Department; Assembly Department transferred $83,400 to finished goods. D: Work in Process-Assembly 98300 C: Work in Process-Machining 98300 D: Finished Goods 83400 C: Work in Process-Assembly 83400 g. Sold goods on account, $100,000; cost of goods sold, $68,000. D: Accounts Receivable 100000 C: Sales 100000 D: Cost of Goods Sold 68000 C: Finished Goods 68000

Carmelita Inc., has the following information available: Cost from Beginning Inventory direct materials 2,000 conversion cost 6200 Costs from Current Period direct materials 22,252 conversion costs 150,536 At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. The company uses the FIFO process cost method. The cost of completing a unit during the current period was

a.$35.95 Equivalent Units for Direct Materials = Number of Units of Direct Materials Added during the Period = 4,500 + 340 = 4,840 units Equivalent Units for Conversion Costs = (500 × 40%) + 4,500 + (340 × 30%) = 4,802 units Cost of Completing a Unit during the Current Period = ($22,252 ÷ 4,840) + ($150,536 ÷ 4,802) = $35.95 per unit

Department 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 1,800 units were one-half completed at the end of the period. Assume the completion ratios apply to direct materials and conversion costs. The total number of units to be assigned cost on the cost of production report for Department W is

b. 17,800 units Number of Units to Be Assigned Costs = 2,400 units + (16,000 - 2,400) units + 1,800 units = 17,800 units

The portion of whole units that were completed with respect to either materials or conversion costs within a given accounting period is the definition of

b. equivalent units

Carmelita Inc., has the following information available: Cost from Beginning Inventory direct materials 2,000 conversion cost 6200 Costs from Current Period direct materials 22,252 conversion costs 150,536 At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. The company uses the FIFO process cost method. The total costs that will be transferred into Finished Goods for units started and completed were

b.$161,775 Equivalent Units for Direct Materials = Number of Units of Direct Materials Added during the Period = 4,500 + 340 = 4,840 units Equivalent Units for Conversion Costs = (500 × 40%) + 4,500 + (340 × 30%) = 4,802 units Cost of Completing a Unit during the Current Period = ($22,252 / 4,840) + ($150,536 / 4,802) = $35.95 per unit The total costs that will be transferred into Finished Goods for units started and completed = $35.95 × 4,500 = $161,775

Equivalent production units are generally determined for

c. direct materials and conversion costs

Department G had 3,600 units, 40% completed at the beginning of the period, 12,000 units were completed during the period, 2,000 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, beginning of period $ 60,000 Costs added during period: Direct materials (10,400 at $9.8365) 102,300 Direct labor 79,800 Factory overhead 25,200 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, the equivalent units for materials and conversion costs, respectively, are

d. 10,400 and 10,960 Equivalent Units for Direct Materials = (12,000 - 3,600) + 2,000 = 10,400 units Equivalent Units for Conversion Costs = (3,600 × 60%) + (12,000 - 3,600) + (2,000 × 20%) = 10,960 units

Carmelita Inc., has the following information available: Cost from Beginning Inventory direct materials 2,000 conversion cost 6200 Costs from Current Period direct materials 22,252 conversion costs 150,536 At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. The company uses the FIFO process cost method. The equivalent units of production for direct materials and conversion costs, respectively, were

d. 4,840 for direct materials and 4,802 for conversion costs Equivalent Units for Direct Materials = Number of Units of Direct Materials Added during the Period = 4,500 + 340 = 4,840 units Equivalent Units for Conversion Costs = (500 × 40%) + 4,500 + (340 × 30%) = 4,802 units

A report prepared periodically by a processing department, summarizing (1) the units for which the department is accountable and the disposition of those units and (2) the costs incurred by the department and the allocation of those costs between completed and incomplete production, is termed a

d. cost of production report

Which of the following is not included in conversion costs?

d. direct materials