Manage Acc test 1

Burk Company uses activity-based costing. Two of Burk Company's production activities are spinning and molding. Assume the company estimates manufacturing overhead costs to be $20,000 per month for spinning and $35,000 per month for molding. Burk Company allocates spinning costs based on the number of machine hours used. Molding costs are allocated based on number of batches. Suppose Burk Company estimates it will use 50,000 machine hours and have 60,000 batches. What is the predetermined overhead allocation rate for spinning? Predetermined overhead allocation rate = Total estimated overhead costs/Total estimated quantity of the overhead allocation base $0.50 per machine hour $4.00 per machine hour $0.40 per machine hour $.25 per machine hour

$0.40 per machine hour Predetermined overhead allocation rate = Total estimated overhead costs/Total estimated quantity of the overhead allocation base In this case it is for spinning based on machine hours: = $20,000/50,000 machine hours = $0.40 per machine hour

In a company where manufacturing overhead is applied based on machine hours, the predetermined allocation rate is $3 per machine hour. Actual machine hours were 3,000 and actual manufacturing overhead was $8,000. Is overhead underallocated or overallocated and by how much? $1,000 overallocated $1,000 underallocated $5,000 overallocated $5,000 underallocated

$1,000 over allocated The amount of overhead applied is $9,000 ($3 per machine hour x 3,000 actual machine hours). Actual overhead was $8,000 and $9,000 was applied. Therefore it was overallocated by $1,000.

Thompson Company is a consulting firm and applies indirect overhead costs based on billing hours. The firm expects to have $7,700 in indirect costs during the year and bill customers for 700 hours. The cost of direct labor is $60 per hour. Thompson Company completed a consulting job for Joe Lock and billed the customer for 20 hours. What was the total cost of the consulting job? $1,420 $1,500 $1,520 $2,320 First, calculate he predetermined allocation rate. Next, calculate the total amount billed.

$1,420 First, calculate he predetermined allocation rate. Predetermined allocation rate = Estimated indirect labor costs / Estimated billing hours = $7,700 / 700 = $11 per hour Next, calculate the total amount billed. Total amount billed = ($11 per hour for overhead + $60 per hour for direct labor) x 20 hours = $1,420

ABC Company uses activity-based costing. Assume the predetermined overhead allocation rates are $0.80 per machine hour for mixing department and $1.20 per test for sampling department. Assume that each unit requires 2 machine hours and 1 test. What is the mixing and sampling cost assigned to one unit? $1.60 for mixing; $1.20 for sampling $0.80 for mixing; $1.20 for sampling $1.60 for mixing; $2.40 for sampling $0.80 for mixing; $2.40 for sampling

$1.60 for mixing; $1.20 for sampling It would cost a $1.60 for mixing ($0.80 per machine hour * 2 machine hours) and $1.20 for sampling (1 test * $1.20 per test).

Jones Company is a consulting firm and applies indirect overhead costs based on billing hours. The firm expects to have $75,000 in indirect costs during the year and bill customers for 7,500 hours. The cost of direct labor is $55 per hour. What is the predetermined overhead allocation rate for Jones Company? $55 per hour $100 per hour $10 per hour $65 per hour Predetermined allocation rate = Estimated indirect labor costs / Estimated billing hours

$10 per hour Predetermined allocation rate = Estimated indirect labor costs / Estimated billing hours = $75,000 / 7,500 = $10 per hour

What is the journal entry to record inventory costing $1,300 being transferred from the Molding Department to Finished Goods Inventory? Cost of Goods Sold: 1,300 Finished Goods Inventory: 1,300 Finished Goods Inventory: 1,300 Cost of Goods Sold: 1,300 Work-in-Process Inventory - Molding: 1,300 Finished Goods Inventory: 1,300 Finished Goods Inventory: 1,300 Work-in-Process Inventory - Molding: 1,300

Finished Goods Inventory: 1,300 Work-in-Process Inventory - Molding: 1,300 The cost is moved out of Work-in-Process Inventory (credit) and into Finished Goods Inventory (debit).

Which statement is true about just-in-time costing? It is also sometimes called backflush costing because it works backwards. It has a Work-in-Process Inventory account. It does NOT have a Finished Goods account. All of the statements are true.

It is also sometimes called backflush costing because it works backwards. JIT does NOT use a Work-in-Process account and does have a Finished Goods account.

Jones Company has an overallocated amount of $2,000 after balancing the Manufacturing Overhead account. The debit entry to close out the overallocated amount would be __________. Cost of Goods Sold Manufacturing Overhead Finished Goods Sales Revenue

Manufacturing Overhead An overallocated amount means there is a credit balance $2,000 in the Manufacturing Overhead account. To close out the Manufacturing overhead account, there would need to be a debit entry to Manufacturing overhead (for the $2,000 balance). The credit entry would be to Cost of Goods Sold.

The journal entry to allocate manufacturing overhead costs to production would include a credit to ________. Manufacturing Overhead Work-in-Process Inventory Finished Goods Raw Materials Inventory

Manufacturing Overhead The journal entry to allocate manufacturing overhead costs to production would include a debit to Work-in-Process Inventory. The credit would be to Manufacturing Overhead.

For a manufacturer, when indirect labor costs are recorded, the debit entry is to __________. Work-in-Process Inventory Direct Labor Manufacturing Overhead Wages Payable

Manufacturing Overhead When indirect labor costs are recorded, the debit entry is to Manufacturing Overhead and the credit is to Wages Payable.

Which is NOT an indirect material for a producer of wood bed frames? Glue Nails Bolts Wood

Wood

Which account does a manufacturing company have that a service business does not have? Utilities Expense Work-in-Process Salaries Expense Retained Earnings

Work-in-Process

For a manufacturer, when direct labor costs are recorded, the debit entry is to __________. Direct Labor Work-in-Process Inventory Manufacturing Overhead Wages Payable

Work-in-Process Inventory When direct labor costs are recorded, the debit entry is to Work-in-Process Inventory and the credit is to Wages Payable.

$126,000 Total cost accounting for conversion costs = (Transferred out x Cost per EUP for conversion costs ) + (Ending work-in-process x Cost per EUP for conversion costs) = (40,000 x $3.00) + (2,000 x $3.00) = $126,000

Zink Company uses the weighted average method for process costing. The cost per equivalent unit for direct materials is $5.00. The cost per equivalent unit for conversion cost is $3.00. The company completed and transferred out is 40,000 units. The equivalent units of ending work-in-process for materials is an additional 3,000 units, for conversion is an additional 2,000 units. What is the total cost accounting for conversion? Total cost accounting for conversion costs = (Transferred out x Cost per EUP for conversion costs ) + (Ending work-in-process x Cost per EUP for conversion costs) $126,000 $210,000 $215,000 $120,000

define Just-In-Time management system

a cost management system in which a company produces products just in time to satisfy needs. Suppliers deliver materials just in time to begin production and finished units are completed just in time for delivery to customers.

Process Costing

a cost system that assigns costs to each process, or work center, in the production cycle, and then calculates the average cost for all units produced

ABC Company has the following costs for the year: Direct Materials Used: $100,000 Direct Labor Incurred: 50,000 Manufacturing Overhead Incurred: 20,000 Selling Expenses: 40,000 Administrative Expenses: 15,000 What is the amount of period costs for the year? $40,000 $15,000 $170,000 $55,000 Total period costs = selling expenses + administrative

$55,000 Total period costs = selling expenses + administrative = $40,000 + $15,000 = $55,000

how do you calculate cost per unit?

add total costs and divide by units

what would be included in manufacturing overhead?

anything indirect (cost that can't be easily and effectively traced back to a cost object)

statement of RE =

beginning bal + CY earnings - Dividends paid = end bal of RE

find ending balance of DM

buy some, add to T account, use some, take from T account

calculate manufacturing OH

chap 16

make a journal entry

chap 18

What are conversion costs?

direct labor and manufacturing overhead

how do you calculate pre determine rate (PDR)?

estimated OH/estimated driver = the amount of OH that goes to WIP every hour the machine runs

cost per unit

figure out

beg bal of WIP

find? define? idk

define activity based costing

focuses on the cost of activities as the building blocks for allocating indirect costs to products and services (spend $2000 on selling orders, made 400 calls, activity = $5 per call)

figure out job cost per unit

geez

calculate cost per unit

help

DM to production journal entry

hepl

what is debited as overhead?

identify an OH cost

journal entry for PDR

idk man

balance sheet

in order of liquidity assets: cash + AR + inventory total current assets + PPE = total assets (has to match total liabilities)

where would a cost identified as indirect labor go?

in overhead

A production supervisor's salary is considered __________. direct labor selling expense administrative expense manufacturing overhead

manufacturing overhead A production supervisor works in the production plant, but does not actually make the product. It is considered indirect labor which is part of manufacturing overhead.

calculate cost per unit again

omg

A report prepared by a processing department for equivalent units of production, production costs, and the assignment of those costs to the completed and in process units is called a __________. job order cost report department report work-in-process report production cost report

production cost report

process costing is done in the

production report

what report do you calculate cost per unit in?

production report

how much product was completed and transferred

production report parts 1 and 2

income statement =

sales - cogs = gross profit

what is a direct labor cost?

something like an assembly line worker

define cost of goods manufactured (COGM)

the manufacturing cost of the goods that finished the production process in a given accounting period

liabilities statement

AP + equity = total liabilities (has to match total assets)

Which is a benefit of a JIT (just-in-time) system? Lower inventory costs Ability to respond quickly to changes in customer needs More space available for production All listed are benefits.

All listed are benefits.

Using a JIT system, to record the amount incurred for direct labor and overhead, the debit entry would be to __________. Wages Payable Direct Labor Cost of Goods Sold Conversion Costs

Conversion Costs

total job cost =

DM + DL + OH (if a service company no DM)

-Which cost is part of both prime and conversion costs? Direct materials used Manufacturing overhead incurred Direct labor incurred Selling and administrative expenses

Direct labor incurred Prime costs are calculated by direct materials used + direct labor incurred. Conversion costs are calculated by direct labor incurred + manufacturing overhead incurred. Therefore, direct labor incurred is part of both prime and conversion costs.

calculate cost per unit-weighted average

EUP

Jones Company has the following information: Total estimated manufacturing overhead costs: $200,000 Total estimated machine hours: 100,000 hours Actual machine hours for month: 5,000 hours Actual manufacturing overhead costs: $210,000 What is the allocated manufacturing overhead costs for the month based on machine hours as a single plantwide rate? $5,000 $10,000 $10,500 $200,000 First, calculate the predetermined overhead allocation rate Second, calculate the allocated manufacturing overhead costs

$10,000 First, calculate the predetermined overhead allocation rate: Predetermined overhead allocation rate = Total estimated overhead costs/Total estimated quantity of the overhead allocation base = $200,000/100,000 est. machine hours = $2.00 per machine hour Second, calculate the allocated manufacturing overhead costs: Allocated manufacturing overhead costs = Predetermined overhead allocation rate * Actual quantity of the allocation base = $2.00 * 5,000 machine hours = $10,000

Jones Company manufactures chairs. Assume the following information: 1. Manufacturing overhead is allocated based on machine hours. 2. Manufacturing overhead is estimated to be $120,000 and machines hours are expected to be 20,000 hours. 3. The actual manufacturing overhead is $111,000 and there are 18,000 actual machine hours. How much manufacturing overhead would Jones Company allocate? $120,000 $111,000 $110,000 $108,000 Predetermined overhead allocation rate = Total estimated overhead cost / Total estimated quantity of the overhead allocation base Allocated manufacturing overhead cost = Predetermined overhead allocation rate x actual quantity of the allocation

$108,000 First, determine the predetermined overhead allocation rate. Predetermined overhead allocation rate = Total estimated overhead cost / Total estimated quantity of the overhead allocation base = $120,000 / $20,000 = $6.00 per machine hour Then calculate the allocated manufacturing overhead cost. Allocated manufacturing overhead cost = Predetermined overhead allocation rate x actual quantity of the allocation = $6.00 x 18,000 actual machine hours = $108,000

White Company is a consulting firm and applies indirect overhead costs based on billing hours. The firm expects to have $102,000 in indirect costs during the year and bill customers for 8,500 hours. The cost of direct labor is $60 per hour. What is the predetermined overhead allocation rate for White Company? $60 per hour $10 per hour $65 per hour $12 per hour Predetermined allocation rate = Estimated indirect labor costs / Estimated billing hours

$12 per hour Predetermined allocation rate = Estimated indirect labor costs / Estimated billing hours = $102,000 / 8,500 = $12 per hour

ABC Company has the following costs for the year: Direct Materials Used: $100,000 Direct Labor Incurred: 50,000 Manufacturing Overhead Incurred: 20,000 Selling Expenses: 40,000 Administrative Expenses: 15,000 What is the amount of prime costs for the year? $170,000 $55,000 $70,000 $150,000 Prime costs = direct materials used + direct labor incurred

$150,000 Prime costs = direct materials used + direct labor incurred = $100,000 + $50,000 = $150,000

White Company has the following information at the end of the current year: Beginning Direct Materials Inventory: $12,000 Ending Direct Materials Inventory: 10,000 Purchases of Direct Materials: 15,000 Beginning Work-in-Process: 5,000 Ending Work-in-Process Inventory: 3,000 What is the cost of direct materials used? $37,000 $17,000 $15,000 $25,000 Direct Materials Used = beginning direct materials inventory + purchases of direct materials - ending direct materials inventory

$17,000 Direct Materials Used = beginning direct materials inventory + purchases of direct materials - ending direct materials inventory = $12,000 + $15,000 - $10,000 = $17,000

ABC Company has the following costs for the year: Direct Materials Used: $100,000 Direct Labor Incurred: 50,000 Manufacturing Overhead Incurred: 20,000 Selling Expenses: 40,000 Administrative Expenses: 15,000 What is the amount of product costs for the year? $170,000 $55,000 $225,000 $150,000 Product costs = direct materials used + direct labor incurred + manufacturing overhead incurred

$170,000 Product costs = direct materials used + direct labor incurred + manufacturing overhead incurred = $100,000 + $50,000 + $20,000 = $170,000

Deluxe Company has the following information: Total estimated manufacturing overhead costs: $300,000 Total estimated machine hours: 100,000 hours Actual machine hours for month: 6,000 hours Actual manufacturing overhead costs: $310,000 What is the allocated manufacturing overhead costs for the month based on machine hours as a single plantwide rate? $18,000 $15,000 $17,500 $300,000 First, calculate the predetermined overhead allocation rate: Second, calculate the allocated manufacturing overhead costs:

$18,000 First, calculate the predetermined overhead allocation rate: Predetermined overhead allocation rate = Total estimated overhead costs/Total estimated quantity of the overhead allocation base = $300,000/100,000 est. machine hours = $3.00 per machine hour Second, calculate the allocated manufacturing overhead costs: Allocated manufacturing overhead costs = Predetermined overhead allocation rate * Actual quantity of the allocation base = $3.00 * 6,000 machine hours = $18,000

White Company has the following costs for the year: Direct Materials Used: $120,000 Direct Labor Incurred: 60,000 Manufacturing Overhead Incurred: 10,000 Selling Expenses: 50,000 Administrative Expenses: 20,000 What is the amount of prime costs for the year? $180,000 $190,000 $70,000 $260,000 Prime costs = direct materials used + direct labor incurred

$180,000 Prime costs = direct materials used + direct labor incurred = $120,000 + $60,000 = $180,000

ABC Computer Company had the following information from the Income Statement. The company sold 200 computers (all the same model): Sales: $160,000 Cost of Goods Sold: 80,000 Total Expenses: 20,000 What is the unit cost per item (computer)? $400 $800 $200 $500 Unit Cost per Item = cost of goods sold / number of items sold

$400 Unit Cost per Item = cost of goods sold / number of items sold = $80,000 / 200 computers = $400 per unit (computer)

White Company has the following costs for the year: Direct Materials Used: $120,000 Direct Labor Incurred: 60,000 Manufacturing Overhead Incurred: 10,000 Selling Expenses: 50,000 Administrative Expenses: 20,000 What is the amount of product costs for the year? $240,000 $260,000 $190,000 $180,000 Product costs = direct materials used + direct labor incurred + manufacturing overhead incurred

$190,000 Product costs = direct materials used + direct labor incurred + manufacturing overhead incurred = $120,000 + $60,000 + $10,000 = $190,000

Brooks Company is a consulting firm and applies indirect overhead costs based on billing hours. The firm expects to have $75,000 in indirect costs during the year and bill customers for 750 hours. The cost of direct labor is $55 per hour. Brooks Company completed a consulting job for George Peterson and billed the customer for 15 hours. What was the total cost of the consulting job? $1,500 $825 $2,000 $2,325 First, calculate he predetermined allocation rate. Next, calculate the total amount billed.

$2,325 First, calculate he predetermined allocation rate. Predetermined allocation rate = Estimated indirect labor costs / Estimated billing hours = $75,000 / 750 = $100 per hour Next, calculate the total amount billed. Total amount billed = ($100 per hour for overhead + $55 per hour for direct labor) x 15 hours = $2,325

ABC Company has the following information at the end of the current year: Beginning Direct Materials Inventory: $10,000 Ending Direct Materials Inventory: 8,000 Purchases of Direct Materials: 18,000 Beginning Work-in-Process: 2,000 Ending Work-in-Process Inventory: 5,000 What is the cost of direct materials used? $20,000 $36,000 $43,000 $25,000 Direct Materials Used = beginning direct materials inventory + purchases of direct materials - ending direct materials inventory

$20,000 Direct Materials Used = beginning direct materials inventory + purchases of direct materials - ending direct materials inventory = $10,000 + $18,000 - $8,000 = $20,000

Buckman Company uses the weighted average method for process costing. The cost per equivalent unit for direct materials is $5.00. The cost per equivalent unit for conversion costs is $3.00. The company completed and transferred out is 40,000 units. The equivalent units of ending work-in-process for materials is an additional 3,000 units, for conversion is an additional 2,000 units. What is the total cost accounting for direct materials? $200,000 $15,000 $215,000 $210,000 Total cost accounting for direct materials = (Transferred out x Cost per EUP for direct materials ) + (Ending work-in-process x Cost per EUP for direct materials)

$215,000 Total cost accounting for direct materials = (Transferred out x Cost per EUP for direct materials ) + (Ending work-in-process x Cost per EUP for direct materials) = (40,000 x $5.00) + (3,000 x $5.00) = $215,000

Jones Company has the following information: Direct materials cost per unit: $10.00 Direct labor cost per unit: $12.00 Total manufacturing overhead: $50,000 Number of units produced: 10,000 units What is the total cost per unit? $22.00 $27.00 $25.00 $26.00

$27.00 Manufacturing overhead per unit is $50,000 / 10,000 units = $5.00 per unit. Add direct materials cost per unit + direct labor cost per unit + manufacturing overhead per unit = total cost per unit. In this case, $10.00 + $12.00 + $5.00 = $27.00 per unit.

White Company manufactures furniture. Assume the following information: 1. Manufacturing overhead is allocated based on machine hours. 2. Manufacturing overhead is estimated to be $150,000 and machines hours are expected to be 10,000 hours. 3. The actual manufacturing overhead is $31,000 and there are 2,000 actual machine hours. How much manufacturing overhead would White Company allocate? $150,000 $31,000 $50,000 $30,000 First, determine the predetermined overhead allocation rate. Then calculate the allocated manufacturing overhead cost.

$30,000 First, determine the predetermined overhead allocation rate. Predetermined overhead allocation rate = Total estimated overhead cost / Total estimated quantity of the overhead allocation base = $150,000 / $10,000 = $15.00 per machine hour Then calculate the allocated manufacturing overhead cost. Allocated manufacturing overhead cost = Predetermined overhead allocation rate x actual quantity of the allocation = $15.00 x 2,000 actual machine hours = $30,000

Simons Taxi Services allocates overhead based on $5 per trip plus $1.20 per mile. During the past week, Simons provided taxi service for 21 customers with average driving distance of 11 miles each. What is the amount of overhead allocated for the week? $277.20 $282.20 $105.00 $382.20

$382.20 To calculate the overhead take (21 customers * $5 trip fee) + (11 miles * $1.20 per mile * 21 customers) = $382.20

ABC Company has the following information at the end of the current year: Direct Materials Used: $25,000 Beginning Work-in-Process Inventory: 2,000 Ending Work-in-Process Inventory: 5,000 Direct Labor: 10,000 Manufacturing Overhead: 7,000 What is the cost of goods manufactured? $43,000 $25,000 $49,000 $39,000 Cost of Goods Manufactured = beginning work-in-process + direct materials used + direct labor + manufacturing overhead - ending work-in-process

$39,000 Cost of Goods Manufactured = beginning work-in-process + direct materials used + direct labor + manufacturing overhead - ending work-in-process = $2,000 + $25,000 + $10,000 + $7,000 - $5,000 = $39,000

Assume that direct material costs in beginning Work-in-Process Inventory is $500 and an additional $1,500 worth of materials is added during the month. Equivalent units for direct materials is 500 units. What is the cost per equivalent unit for direct materials? $4.00 $1.00 $3.00 Not enough information to determine Cost per EUP for direct materials = Total direct materials costs Equivalent units of production for direct materials

$4.00 Cost per EUP for direct materials = Total direct materials costs Equivalent units of production for direct materials ($500 + $1,500) / 500 units = $4.00 per unit. Cost per EUP for direct materials is calculated by dividing the total direct materials costs by the equivalent units of production for direct materials.

Jones Company manufactures chairs. Assume the following information: 1. Manufacturing overhead is allocated based on machine hours. 2. Manufacturing overhead is estimated to be $120,000 and machines hours are expected to be 20,000 hours. 3. The actual manufacturing overhead is $111,000 and there are 18,000 actual machine hours. What is Jones Company's predetermined overhead allocation rate (to the nearest cent)? $5.55 per machine hour $6.17 per machine hour $0.16 per machine hour $6.00 per machine hour Predetermined overhead allocation rate = Total estimated overhead cost / Total estimated quantity of the overhead allocation base

$6.00 per machine hour Predetermined overhead allocation rate = Total estimated overhead cost / Total estimated quantity of the overhead allocation base = $120,000 / $20,000 = $6.00 per machine hour

Brown Company has the following information at the end of the current year: Cost of Goods Manufactured: $65,000 Beginning Finished Goods Inventory: 3,000 Ending Finished Goods Inventory: 6,000 Manufacturing Overhead: 9,000 What is the amount of cost of goods sold? $62,000 $74,000 $65,000 $57,000 Cost of Goods Sold = beginning finished goods inventory + cost of goods manufactured - ending finished goods inventory

$62,000 Cost of Goods Sold = beginning finished goods inventory + cost of goods manufactured - ending finished goods inventory = $3,000 + $65,000 - $6,000 = $62,000

Jones company sold 100 chairs for $120 each. The cost to produce each chair is $70. For what amount should Cost of Goods Sold be debited? $12,000 $7,000 $120 $70

$7,000 To calculate Cost of Goods Sold take the cost per chair of $70 * 100 chairs sold = $7,000 total.

ABC Company has the following costs for the year: Direct Materials Used: $100,000 Direct Labor Incurred: 50,000 Manufacturing Overhead Incurred: 20,000 Selling Expenses: 40,000 Administrative Expenses: 15,000 What is the amount of conversion costs for the year? $150,000 $170,000 $70,000 $55,000 Conversion costs = direct labor incurred + manufacturing overhead incurred

$70,000 Conversion costs = direct labor incurred + manufacturing overhead incurred = $50,000 + $20,000 = $70,000

White Company has the following costs for the year: Direct Materials Used: $120,000 Direct Labor Incurred: 60,000 Manufacturing Overhead Incurred: 10,000 Selling Expenses: 50,000 Administrative Expenses: 20,000 What is the amount of period costs for the year? $190,000 $70,000 $240,000 $180,000 Total period costs = selling expenses + administrative

$70,000 Total period costs = selling expenses + administrative = $50,000 + $20,000 = $70,000

how do you calculate COGM?

(Beginning WIP inventory + Total manufacturing costs/purchases) - ending WIP inventory = COGM

statement of stockholders equity

(C/S) paid in capitol + RE = total equity

calculate equivalent units

(DM was put in at the beginning)

Journal Entries

(buy RM, put in WIP, transfer, sell) house problem chap 17

calculate job cost

(job 1, job 2, etc)

Baxter Company uses the weighted-average method in its process costing system. The Finishing Department started the month with 300 units in process that were 70% complete, receiving 2,000 units from the Cutting Department. The finishing department had 200 units in process at the end of the period that are 40% complete. All materials are added at the beginning of the process and conversion is added uniformly. From the Finishing Department, units are transferred to Finished Goods. For conversion costs, the equivalent units of production for the Finishing Department is ________. 2,180 units 2,000 units 2,200 units 2,500 units Completed & transferred out = Beginning work-in-process + Transferred in - Ending work-in-process Next, calculate the equivalent units of production for conversion costs:

2,180 units First, determine how many units were completed and transferred out of the Finishing Department: Completed & transferred out = Beginning work-in-process + Transferred in - Ending work-in-process = 300 + 2,000 - 200 = 2,100 units completed and transferred Next, calculate the equivalent units of production for conversion costs: Completed units: 2,100 units x 100% = 2,100 EUP for conversion costs In process units: 200 units x 40% = 80 EUP for conversion costs Total EUP for conversion costs = 2,180 EUP for conversion costs

The Cutting Department has 6,000 units in process at the end of September that are 100% complete for direct materials. The units are 70% complete for direct labor and manufacturing overhead, which is added uniformly. What are the equivalent units of production for direct materials? 4,200 units 10,200 units 6,000 units 12,000 units

6,000 units There are 6,000 units x 100% complete for materials = 6,000 equivalent units

Jones Company uses the weighted-average method in its process costing system. The Finishing Department started the month with 400 units in process that were 70% complete, receiving 2,500 units from the Cutting Department. Jones Company had 200 units in process at the end of the period that are 40% complete. All materials are added at the beginning of the process and conversion is added uniformly. From the Finishing Department, units are transferred to Finished Goods. How many units were completed and transferred out of the Finishing Department? 2,700 units 2,500 units 2,900 units 2,300 units Completed & transferred out = Beginning work-in-process + Transferred in - Ending work-in-process

2,700 units Completed & transferred out = Beginning work-in-process + Transferred in - Ending work-in-process = 400 + 2,500 - 200 = 2,700 units completed and transferred

The Mixing Department has 5,000 units in process at the end of August that are 100% complete for direct materials. The units are 60% complete for direct labor and manufacturing overhead which is added uniformly. What are the equivalent units of production for direct materials? 2,000 units 5,000 units 3,000 units 2,500 units

3,000 units There are 5,000 units x 100% complete for materials = 5,000 equivalent units.

Williams Company uses the weighted-average method in its process costing system. The Packaging Department started the month with 400 units in process that were 80% complete, receiving 3,000 units from the Cutting Department. The packaging department had 300 units in process at the end of the period that are 50% complete. All materials are added at the beginning of the process and conversion is added uniformly. From the Packaging Department, units are transferred to Finished Goods. For conversion costs, the equivalent units of production for the Finishing Department is ________. 3,250 units 3,000 units 3,100 units 3,400 units Completed & transferred out = Beginning work-in-process + Transferred in - Ending work-in-process Next, calculate the equivalent units of production for conversion costs:

3,250 units First, determine how many units were completed and transferred out of the Finishing Department: Completed & transferred out = Beginning work-in-process + Transferred in - Ending work-in-process = 400 + 3,000 - 300 = 3,100 units completed and transferred Next, calculate the equivalent units of production for conversion costs: Completed units: 3,100 units x 100% = 3,100 EUP for conversion costs In process units: 300 unit x 50% = 150 EUP for conversion costs Total EUP for conversion costs = 3,250 EUP for conversion costs

Williams Company uses the weighted-average method in its process costing system. The Packaging Department started the month with 400 units in process that were 80% complete, receiving 3,000 units from the Cutting Department. The packaging department had 300 units in process at the end of the period that are 50% complete. All materials are added at the beginning of the process and conversion is added uniformly. From the Packaging Department, units are transferred to Finished Goods. For direct material, the equivalent units of production for the Finishing Department is ________. 3,400 units 3,000 units 3,250 units 3,300 units Completed & transferred out = Beginning work-in-process + Transferred in - Ending work-in-process Next, calculate the equivalent units of production for direct material:

3,400 units First, determine how many units were completed and transferred out of the Finishing Department: Completed & transferred out = Beginning work-in-process + Transferred in - Ending work-in-process = 400 + 3,000 - 300 = 3,100 units completed and transferred Next, calculate the equivalent units of production for direct material: Completed units: 3,100 units x 100% = 3,100 EUP for direct materials In process units: 300 units x 100% = 300 EUP for direct materials Total EUP for direct materials = 3,400 EUP for direct materials For in process units, use 100% because the direct materials are added at the beginning of the process If the units are started, then 100% of the materials have been added.

Tampa Company has the following information: Total estimated manufacturing overhead costs: $300,000 Total estimated direct labor costs: 900,000 Actual direct labor costs: 60,000 Actual manufacturing overhead costs: 310,000 What is the predetermined overhead allocation rate based on direct labor costs as a single plantwide rate? 26.2% 41.3% 33.3% 92.1% Predetermined overhead allocation rate = Total estimated overhead costs/Total estimated quantity of the overhead allocation base

33.3% Predetermined overhead allocation rate = Total estimated overhead costs/Total estimated quantity of the overhead allocation base In this case we used estimated direct labor costs as the overhead allocation base = $300,000/$900,000 = .333 or 33.3%

The Cutting Department has 6,000 units in process at the end of September that are 100% complete for direct materials. The units are 70% complete for direct labor and manufacturing overhead which is added uniformly. What are the equivalent units of production for conversion costs? 6,000 units 12,000 units 8,400 units 4,200 units

4,200 units There are 6,000 units x 70% complete for conversion costs = 4,200 equivalent units.

White Company uses the weighted-average method in its process costing system. The Mixing Department has 5,000 units in beginning Work-in-Process Inventory. The Mixing Department completed 40,000 units and transferred those units to Finished Goods Inventory. Mixing Department has ending Work-in-Process Inventory of 6,000 units. How many total units will be accounted for in the Mixing Department? 40,000 units 46,000 units 41,000 units 45,000 units Accounted for = Transferred out + In process

46,000 units Accounted for = Transferred out + In process = 40,000 + 6,000 = 46,000 units

Thompson Company uses the weighted-average method in its process costing system. The Cutting Department has 6,000 units in beginning Work-in-Process Inventory. The Cutting Department completed 42,000 units and transferred those units to Finished Goods Inventory. Cutting Department has ending Work-in-Process Inventory of 7,000 units. How many total units will be accounted for in the Cutting Department? 41,000 units 49,000 units 42,000 units 55,000 units Accounted for = Transferred out + In process

49,000 units Accounted for = Transferred out + In process = 42,000 + 7,000 = 49,000 units

Depreciation on factory equipment would be recorded as a debit to ________ and credit to ________. Depreciation Expense; Accumulated Depreciation Accumulated Deprecation; Manufacturing Overhead Manufacturing Overhead; Accumulated Depreciation Depreciation Expense; Manufacturing Overhead

Manufacturing Overhead; Accumulated Depreciation The entry would be debit Manufacturing Overhead and credit Accumulated Depreciation. Depreciation Expense is not debited since it is a factory related expense.

Which of the following businesses would be MOST likely to use process costing? Accounting firm Automotive repair shop Potato chip manufacturer Interior decorator

Potato chip manufacturer A potato chip manufacturer mass produces chips keeping track of costs in each department, so a process costing system would be used.

When direct materials are used in production, costs are assigned by debiting Work-In-Process Inventory and crediting __________. Direct Materials Raw Materials Inventory Work-in-Process Inventory Manufacturing Overhead

Raw Materials Inventory When direct materials are used in production, costs are assigned by debiting Work-In-Process and crediting Raw Materials Inventory.

how to calculate gross profit

Sales/revenue - COGS = GP

-Which of the following is considered a period cost? Selling expenses Depreciation on plant equipment Direct materials used Direct labor incurred

Selling expenses (Selling expenses are a period cost. The other items listed are product costs.)

Which of the following is a direct cost of manufacturing an automobile? Salary of engineer who designs the engine for the automobile Tires for the automobile Salesperson's commission Depreciation on plant equipment

Tires for the automobile Tires are a direct material for the automobile. The salary of an engineer and plant depreciation are manufacturing overhead costs. A salesperson's commission is a selling expense.

In a company where manufacturing overhead is applied based on machine hours, $2,600 of overhead has been applied, while actual overhead is $2,800. Is overhead underallocated or overallocated and by how much? Overallocated by $200 Underallocated by $200 There is no overallocated or underallocated amount. Cannot determined if there is an overallocated or underallocated amount from the given information.

Underallocated by $200 Actual overhead was $2,800, however only $2,600 was applied to overhead. Therefore it is underallocated by $200.

Jones Company sold goods for $10,000 on account. The cost of the goods was $7,000. The journal entry to record the sale at retail price would be: debit Accounts Receivable: 10,000 credit Sales Revenue: 10,000 debit Accounts Receivable: 7,000 credit Sales Revenue: 7,000 debit Sales Revenue: 10,000 credit Accounts Receivable: 10,000 debit Sales Revenue: 7,000 credit Accounts Receivable: 7,000

debit Accounts Receivable: 10,000 credit Sales Revenue: 10,000 The journal entry to record the sale at retail price would be a debit to Accounts Receivable and a credit to Sales Revenue for the retail selling price of $10,000. Remember that the sale of good always includes two journal entries, one to record the sale at retail price and a second to record the cost of goods sold.

Jones Company sold goods for $10,000 on account. The cost of the goods was $7,000. The journal entry to record the cost of the goods sold would be: debit Finished Goods Inventory: 7,000 credit Cost of Goods Sold: 7,000 debit Cost of Goods Sold: 7,000 credit Finished Goods Inventory: 7,000 debit Accounts Receivable: 7,000 credit Sales Revenue: 7,000 debit Sales Revenue: 7,000 credit Accounts Receivable: 7,000

debit Cost of Goods Sold: 7,000 credit Finished Goods Inventory: 7,000 The journal entry to record the cost of the goods sold would be a debit to Cost of Goods Sold and a credit to Finished Goods for the cost of goods sold of $7,000. Remember that the sale of good always includes two journal entries, one to record the sale at retail price and a second to record the cost of goods sold.

The cost of goods manufactured for the period is $100,000. The journal entry to record the transfer of the finished goods to a storage area before being sold would be: debit Finished Goods Inventory: 100,000 credit Cost of Goods Sold: 100,000 debit Cost of Goods Sold: 100,000 credit Finished Goods Inventory: 100,000 debit Work-in-Process Inventory: 100,000 credit Finished Goods Inventory: 100,000 debit Finished Goods Inventory: 100,000 credit Work-in-Process Inventory: 100,000

debit Finished Goods Inventory: 100,000 credit Work-in-Process Inventory: 100,000 The journal entry to record goods that are finished but not yet sold is a debit to Finished Goods and a credit to Work-in-Process Inventory for the cost of goods manufactured.

Cutting Department completed work on 1,000 units and transferred them to the Molding department. The cost of the units was $1,500. What is the journal entry to record the transfer? debit Work-in-Process Inventory-Molding Department: 1,500 credit Work-in-Process Inventory-Cutting Department: 1,500 debit Work-in-Process Inventory - Cutting Department: 1,500 credit Work-in-Process Inventory - Molding Department: 1,500 debit Work-in-Process Inventory - Molding Department: 1,500 credit Finished Goods Inventory: 1,500 debit Work-in-Process Inventory - Cutting Department: 1,500 credit Finished Goods Inventory: 1,500

debit Work-in-Process Inventory-Molding Department: 1,500 credit Work-in-Process Inventory-Cutting Department: 1,500 Units are moved from Cutting Department (credit) into Molding Department (debit).