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21.Unit costs for each job are computed by dividing a.estimated total costs by planned units to be produced. b.actual costs by actual units sold. c.cost of direct materials, direct labor, and overhead by number of units produced. d.estimated total costs by actual units produced. 22.The _________ provide(s) the most direct means of calculating unit costs.
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5.Bakersfield Company manufactures a variety of chips and utilizes a process costing system. The following information was provided by the accounting department as of May 31, 20xx: a. Units started during the month of May totaled 35,000. b. Units partially complete as of May 31 equaled 8,400. c. Ending work in process inventory.
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31.The following partially completed T accounts summarize the transactions of Carlton Company for last year: Materials Inventory Beg Bal5,00020,000(2) (1)17,000 Work in Process Inventory Beg Bal9,00063,600(7) (2)13,000 (4)16,000 (6)29,000 Overhead (2)7,00029,000(6) (3)14,000 (4)6,000 (5)3,000 Cost of Goods Sold Accounts Payable 17,000(1) 3,000(5) Finished Goods Inventory Beg Bal16,000 (7)63,600 End Bal13,000 Payroll Payable           5,000Beg Bal 31,000(4) Office Salaries Expense (4)9,000 Accumulated Depreciation (Factory) 80,000Beg Bal 14,000(3) At the end of the year, the company closes out the balance in the Overhead.
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11.For a company having two or more production departments, at the end of the accounting period  a separate process cost report for each department is prepared. 12.The most commonly used method to assign costs to products in process costing is the FIFO costing method. 13.The FIFO costing method is a costing method.
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17.Ressano Manufacturing had the following transactions during March. There were no beginning inventory balances. a. Purchased $96,000 of direct materials, on account. b. Incurred direct labor costs, $83,000. c. Applied $88,000 of overhead to production. d. Completed units costing $252,000. e. Sold units costing $250,000. Using backflush costing, show the flow of costs using the T.
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  MULTIPLE CHOICE 1.Full product cost includes a.all direct labor and direct material costs and all production and nonproduction costs. b.only nonproduction costs. c.only the costs of direct material. d.only the costs of direct labor. 2.Activity-based management includes all of the following except identifying a.customer satisfaction with a product or service. b.the resources that are consumed by each activity. c.activities.
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14.Susan's Plastics, Inc., manufactures a line of office desk accessories. The company's newest and most popular product is a plastic paper holder for holding the paper up while working at the computer. Production began on February 1, 20xx. Plastic is poured into molds to form the product, and the entire.
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6.Bear Country produces hand-carved wooden bears and uses a job order costing system. The following are data on the three jobs worked on in the company's first month of operations: SmokeyRockyCurious Number of bears18010080 Direct labor hours worked400200140 Direct materials cost$4,500$2,700$2,000 Direct labor cost$6,000$3,000$2,100 Overhead cost is applied to job orders on the basis of direct.
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4.Pretty Pillows, Mfg., manufactures silk throw pillows. Last month the company produced 3,890 pillows. Using job order costing, determine the product unit cost for one pillow based on the following costs: production facility utilities, $1,600; depreciation on production equipment, $650; indirect materials, $400; direct materials, $5,300; indirect labor, $1,000; direct.
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  1.How can activity-based systems help managers in a global marketplace? 2.How do managers measure an activity's performance? 3.Distinguish between a supply chain and a value chain. How do they relate to each other? 4.Last year, Amanda Jones opened a candy store in a busy shopping center. She spent a lot on advertising and.
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  SHORT ANSWER 1.Explain the similarities and differences between job order costing and process costing. Focus on the characteristics of each type of system. 2.The Work in Process Inventory account for Corbett Company for the month ended June 30 appears below. Work in Process Inventory Beginning Balance               0Completed                 135,800 Direct Materials           38,200 Direct Labor                 48,000 Overhead                     86,400 Overhead is.
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6.Identify the following activities, for an automobile manufacturer, as either value-adding (V) or nonvalue-adding (NV). _____ a. Moving products _____ b. Storing parts _____ c. Research and development _____ d. Inventory control _____ e. Production _____ f.  Customer service _____ g. Cost accounting _____ h. Engineering d. NV        h. V 7.A goal of process value analysis (PVA) is to reduce nonvalue-adding.
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13.Data for Orlando Company for the month of June 20xx are as follows: Beginning work in process inventory:Operations for the month of June: Units—800Units started—14,000 Direct materials—100% completeDirect materials costs—$57,400 Conversion costs—70% completeConversion costs—$50,122 Direct materials costs—$2,860 Conversion costs—$2,150 Ending work in process inventory: Units—1,500 Direct materials—100% complete Conversion costs—30% complete Assume the company uses a FIFO flow of costs. a.  Prepare.
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21.A cost hierarchy and a bill of activities are tools for the implementation of activity-based costing. 22.Only value-adding activities are included in the cost hierarchy. 23.For a bank, a credit check of a loan applicant is an example of a batch-level activity. 24.Typically, there are seven levels in the cost hierarchy. 25.Activity costs per.
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21.Engineering design is an activity vital to the success of any motor vehicle manufacturer. Identify the level at which engineering design would be classified in the cost hierarchy used with ABC for a maker of unique luxury automobiles. a.Unit-level activity b.Batch-level activity c.Product-level activity d.Facility-level activity 22.Product unit costs computed using activity-based costing compared to.
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15.Surf's Up manufactures surfboards. Production has just been completed for May 20xx. The beginning balances in Work in Process Inventory were direct materials costs, $31,400, and conversion costs, $16,400. Cost of direct materials used in March was $394,800, and March's conversion costs were $598,400. A schedule of equivalent production for.
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14.President/CEO to her Controller: “On the golf course yesterday I overheard John Jeffers, the CEO for Octal, say that the problem with many manufacturing companies today is their antiquated manufacturing cost accounting systems. It appears to me that our cost accounting system has served us well as our company has grown.
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11.Taylor Company manufactures guitars and uses a job order costing system with a predetermined overhead rate of 110 percent per direct labor dollar. On September 11, 20xx, Those Guys ordered 200 beginner guitars which were completed on October 13, 20xx. The Job Order number is 1031. Complete the job order cost.
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31.In moving toward the just-in-time continuous work flow concept, a key objective is the elimination of waste. 32.A just-in-time philosophy seeks to minimize inventories. 33.Traditional environments emphasize functional departments that tend to group similar activities together. 34.When managing inventory in a just-in-time environment, there is less need to control personnel. 35.In a just-in-time environment,.
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11.Activity-based management is useful for both strategic planning and operational decision making. 12.For a manufacturer, the final customer is part of the supply chain and customer service is part of the value chain. 13.For service organizations, customer relations are part of the supply chain and customers are part of the value chain. 14.The.
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11.Direct materials for 6,800 units were added at the beginning of the second process during November. During the month, 7,100 units were completed and transferred to the third process. On November 1, there were 600 units in beginning inventory, and on November 30, there were 300 units still remaining in.
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TRUE/FALSE 1.Nonproduction costs are not included in full product cost. 2.Value-based systems are information systems that provide only customer-related information but not activity-based information. 3.Full product cost is relevant for companies providing services as well as those providing products. 4.A non-value-adding activity is one that adds cost to a product or service and also.
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TRUE/FALSE 1.In a process costing system, each product is assigned the same amount of costs. 2.In a process costing system, product costs are traced to individual products. 3.A company that manufactures potato chips would probably use a process costing system. 4.Conversion costs per equivalent unit will be same under both FIFO and average costing.
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7.Production has just been completed for January 20xx by Colombo, Inc. The company utilizes a process costing system, and the following accounting and operating information was obtained from company records: a. Beginning work in process inventory consisted of units totaling 8,200 that were 60 percent complete as of January 1, 20xx.
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10.Define activity-based costing. Explain why this approach to cost assignments is superior to the traditional method of using a plantwide overhead cost rate. Will activity-based costing always result in lower product costs? Defend your answer. 11.Listed below are the activities of Tammy's Toy Store. Identify the level at which each activity.
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31.Which of the following statements is true? a.The Work in Process Inventory account is the focal point of process costing. b.Labor costs are accounted for differently from overhead costs in a process costing system. c.Equivalent units usually are computed for direct materials and overhead combined. d.To compute unit costs using the FIFO process costing.
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31.The initial step in achieving the efficiency of a just-in-time system is to a.redesign the plant layout. b.replace laborers with machines. c.stop ordering materials for inventory. d.identify products that are not profitable. 32.In a traditional operating environment, a company usually a.plans by using pull-through production scheduling. b.has long production runs with infrequent setups. c.maintains a minimum inventory level. d.uses.
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51.In the JIT environment, direct materials and conversion costs should be nearly uniform for each product in a work cell. 52.The time a product spends waiting to be worked on is called storage time. 53.The JIT operating philosophy must be adopted by everyone in a company before its total benefits can be.
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51.The Bakersfield Company has the following information available: Costs from Beginning InventoryCosts from Current Period Direct materials$3,650$ 31,620 Conversion costs9,120143,100 At the beginning of the period, there were 800 units in process that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs. During the current period,.
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21.Because process costing is normally associated with a continuous production flow, products that are in process at the beginning of the period are assumed to be the first products completed during the current period. 22.In a process costing system, products flow in a LIFO manner, from department to department. 23.In a process.
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9.Jackson Electronics, Inc., manufactures a variety of microelectronic component parts and utilizes a process costing system. The following information was provided by the accounting department as of July 31, 2010: a. Units started during the month of July totaled 118,200. b. Units partially complete as of July 31 equaled 7,400. c. Ending work.
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41.A just-in-time environment has smaller inventories than the traditional manufacturing environment. As a result, a.larger production lot sizes are the rule, in order to realize the cost-effectiveness of long production runs. b.the amount of working capital required for inventory typically increases. c.the just-in-time environment experiences a lower inventory turnover than the traditional environment. d.the.
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  MULTIPLE CHOICE 1.A company should use process costing rather than job order costing if a.production is only partially completed during the accounting period. b.the product is produced in batches only as orders are received. c.the product is composed of mass-produced homogeneous units. d.the product goes through single stage of production. 2.Which of the following items most.
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TRUE/FALSE 1.Cost behavior is the way prices are adjusted due to changes in costs. 2.Cost behavior is defined as the manner in which costs respond to changes in volume or activity. 3.When managers plan, they may use cost behavior to decide how to change the mix of products to meet changing demand. 4.Cost behavior.
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51.Backflush costing aims at reducing waste in the a.accounting system. b.cost of goods sold. c.storage of raw materials. d.production process. 52.For work done during August, Printing Press Company incurred direct materials costs of $139,000 and conversion costs of $260,000. The company employs a just-in-time operating philosophy and backflush costing. At the end of August, it.
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8.During the first month of the current accounting period, Southern California Company experienced a devastating loss due to a fire. Many of the accounting records were lost and the company is now trying to recreate the lost information. Fragments of data found include the following: 1. A portion of the budget.
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11.Use the following information to perform the calculations requested below, assuming that the average costing approach to a process costing system is being used. Beginning work in process inventory: 6,000 units, 100 percent complete as to direct materials, 75 percent complete as to conversion costs Ending work in process inventory: 18,000 units,.
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18.M. E. Taylor Enterprises had the following transactions during October. There were no beginning inventory balances. a. Purchased $37,300 of direct materials, on account. b. Incurred direct labor costs, $29,250. c. Applied $37,500 of overhead to production. d. Completed units costing $88,450. e. Sold units costing $76,130. Using backflush costing, show the flow of costs using.
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41.The just-in-time operating environment typically is characterized by the positioning of all similar machines together on the factory floor. 42.Push-through method is used in traditional manufacturing operations. 43.A work cell is an autonomous production line that can perform only one required operation efficiently at a time. 44.In a just-in-time manufacturing environment, both push-through.
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11.Any cost can be classified as either a variable cost or a fixed cost. 12.Theoretical operating capacity is the level at which management expects to operate during a normal business environment. 13.Practical capacity is theoretical or ideal capacity reduced by normal and anticipated work stoppages, such as machine breakdowns. 14.Normal capacity is the.
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41.Unit costs are determined by dividing the total costs of the period by the equivalent units. 42.One of the steps in preparing the process cost report under FIFO method requires dividing current costs charged to the Work in Process Inventory account of each department or production process by equivalent units to.
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10.Logan Company uses a job order costing system. A predetermined overhead rate of $7 per machine hour in Department A and 220 percent per direct labor dollar in Department B has been established based upon the following information at the beginning of the year: Department ADepartment B Estimated overhead$40,600$88,000 Estimated machine hours5,80012,500 Estimated direct.
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21.During March, Department A started 300,000 units of product in a particular production process. The beginning work in process inventory was 50,000 units, and the ending inventory was 40,000 units. Direct materials are introduced at the start of processing, and beginning and ending inventories are considered to be 40 percent.
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11.A nonvalue-adding activity is defined as a(n) a.administrative or support activity that adds overhead cost to the product and increases its market value. b.activity that adds cost to a product but does not increase its market value. c.activity that adds no cost to the product but increases its market value. d.wasteful but unavoidable production.
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31.Equivalent units are defined as the number of units completed and transferred out of work in process inventory during the current period. 32.In many instances, direct materials are added at the beginning of the process. 33.Separate equivalent units of production usually are calculated for materials and conversion costs. 34.The number of equivalent units.
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  SHORT ANSWER 1.Jackson Electronics, Inc., manufactures a variety of microelectronic component parts and utilizes a process costing system. The following information was provided by the accounting department as of July 31, 20xx: a. Units started during the month of July totaled 118,200. b. Units partially complete as of July 31 equaled 7,400. c. Ending.
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3.Use the following information to perform the calculations requested below, assuming that the FIFO costing approach to a process costing system is being used. Beginning work in process inventory: 6,000 units, 100 percent complete as to direct materials, 75 percent complete as to conversion costs Ending work in process inventory: 18,000 units,.
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61.The three inventory accounts used in traditional costing are replaced by two inventory accounts in backflush costing. 62.The Cost of Goods Sold account will have the same ending balance whether using traditional or backflush costing. 63.Backflush costing aims at decreasing waste in the production process. 64.Backflush costing eliminates the need to make journal.
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41.During October, Department A started 320,000 units of product in a particular manufacturing process. The beginning work in process inventory was 50,000 units, and the ending inventory was 30,000 units. Direct materials are introduced at the start of processing, and beginning and ending inventories are considered to be 50 percent.
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