| Question 6.6.(TCO F) Wedd Corporation had $35,000 of raw materials on hand on May 1. During the month, the company purchased an additional $68,000 of raw materials. During May, $92,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $5,000. The debits to the Work in Process account as a consequence of the raw materials transactions in May total: (Points : 5) |
$92,000.
$0.
$68,000.
$87,000.
| 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. Custom boat builder
ii. Frozen cranberry juice processor
iii. Concrete block manufacturer
iv. Winery that produces a number of varietal wines
v. Aluminum refiner that makes aluminum ingots from bauxite ore
For each company, indicate whether the company is most likely to use job-order costing or process costing.
(Points : 15) |
Question 2.2.(TCO F) Job 728 was recently completed. The following data have been recorded on its job cost sheet:
| Direct materials |
$81,000 |
| Direct labor hours |
1,220 labor hours |
| Direct labor wage rate |
$15 per labor-hour |
| Machine Hours |
1,520 machine hours |
| Number of units completed |
4,400 units |
The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $16 per machine-hour.
Compute the unit product cost that would appear on the job cost sheet for this job. (Points : 15) |
Question 3.3.(TCO F) Auger Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company’s first processing department for a recent month.
| Work in process, beginning |
|
| Units in process |
700 |
| Percent complete with respect to materials |
80% |
| Percent complete with respect to conversion |
40% |
| Costs in the beginning inventory: |
|
| Materials cost |
$1,904 |
| Conversion cost |
$8,624 |
| Units started into production during the month |
29,000 |
| Units completed and transferred out |
28,800 |
| Costs added to production during the month: |
|
| Materials cost |
$104,044 |
| Conversion cost |
$875,266 |
| Work in process, ending: |
|
| Units in process |
900 |
| Percent complete with respect to materials |
70% |
| Percent complete with respect to conversion |
20% |
Required:
i. Determine the equivalent units of production.
ii. Determine the costs per equivalent unit.
iii. Determine the cost of ending work in process inventory.
iv. Determine the cost of the units transferred to the next department (Points : 15) |
Question 4.4.(TCO F) Hunsicker Corporation has provided the following data for the month of January:
| Inventories |
|
Beginning |
Ending |
|
Raw materials |
$30,000 |
$33,000 |
|
Work In process |
$20,000 |
$18,000 |
|
Finished goods |
$52,000 |
$60,000 |
| Additional Information |
|
|
Raw material purchases |
$63,000 |
|
Direct labor costs |
$92,000 |
|
Manufacturing overhead cost incurred |
$75,000 |
|
Indirect materials included in manufacturing overhead costs incurred |
$6,000 |
|
Manufacturing overhead cost applied to work in process |
$69,000 |
Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.
(Points : 15) |
|
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