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21 - 1 Process Costing Ex. 181 The Polishing Department of Eia Manufacturing Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process. Production: Beginning inventory 2,000 units that are 100% complete as to materials and 30% complete as to conversion costs; units started.
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22 - 1 Cost-Volume-Profit 138.The amount by which actual or expected sales exceeds break-even sales is referred to as a.contribution margin. b.unanticipated profit. c.margin of safety. d.target net income. 139.In evaluating the margin of safety, the a.break-even point is not relevant. b.higher the margin of safety ratio, the greater the margin of safety. c.higher the dollar amount, the lower.
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21 - 1 Process Costing Ex. 173 The Assembly Department uses a process cost accounting system and a weighted-average cost flow assumption. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July, $190,000 of materials costs and $136,500 in conversion costs were charged.
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21 - 1 Process Costing BRIEF EXERCISES BE 153 Superior Painting Company has the following production data for January: Beginning work in process, 0 units Units transferred out, 35,000 Units in ending work in process, 8,000, which are 40% complete for conversion costs Materials are added only at the beginning of the process. Instructions Compute equivalent units of production for.
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22 - 1 Cost-Volume-Profit BRIEF Exercises BE 162 Nison Company accumulates the following data concerning a mixed cost, using miles as the activity level. Miles Driven Total Cost Miles Driven Total Cost January 10,000 $14,750 March 9,000 $12,500 February 8,000 $14,500 April 7,500 $12,000 Instructions Compute the variable and fixed cost elements using the high-low method. BE 163 Excel Company makes 2 products, footballs and baseballs. Additional information follows: FootballsBaseballs Units4,0002,500 Sales revenue$60,000 $25,000 Variable costs36,0008,000 Fixed.
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22 - 1 Cost-Volume-Profit 11.A mixed cost has both selling and administrative cost elements. 12.The fixed cost element of a mixed cost is the cost of having a service available. 13.For planning purposes, mixed costs are generally grouped with fixed costs. 14.The difference between the costs at the high and low levels of activity.
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21 - 1 Process Costing 88.Materials costs of $500,000 and conversion costs of $535,500 were charged to a processing department in the month of September. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process,.
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21 - 1 Process Costing 78.The Molding Department of Bidwell Company has the following production data: beginning work process 40,000 units (60% complete), started into production 680,000 units, completed and transferred out 640,000 units, and ending work in process 80,000 units (40% complete). Assuming materials are entered at the beginning of the.
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21 - 1 Process Costing 58.A process with no beginning work in process, completed and transferred out 95,000 units during a period and had 50,000 units in the ending work in process inventory that were 30% complete. The equivalent units of production for the period were: a.95,000 equivalent units. b.145,000 equivalent units. c.110,000 equivalent units. d.47,500.
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21 - 1 Process Costing 118. A department had the following information for the month: Total materials costs$220,000 Conversion cost per unit$3.00 Total manufacturing cost per unit$5.00 What are the equivalent units of production for materials? a.110,000. b.73,333. c.44,000. d.Cannot be determined 119.Mortan Manufacturing decided to analyze certain costs for June of the current year. Units started into production equaled 28,000.
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21 - 1 Process Costing BE 158 Sandhurst Widget Company has the following production data for March. Ending Work in Process Month Beginning Work in Process Units Transferred Out Units % Complete as to Conversion Cost March 1,100 8,100 800 20% BE 158(cont.) Instructions Compute the physical units for March. BE 159 Sequa Company has the following production data for June: units transferred out 60,000, and ending work in process 6,000.
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22 - 1 Cost-Volume-Profit 118.Blake Company is planning to sell 800,000 units for $1.50 per unit. The contribution margin ratio is 20%. If Blake will break even at this level of sales, what are the fixed costs? a.$240,000. b.$560,000. c.$800,000. d.$960,000. 119.Demsey Company reported the following results from the sale of 6,000 units in May: sales.
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21 - 1 Process Costing Ex. 186 Rosa Winery manufactures a fine wine in two departments, Fermenting and Bottling. In the Fermenting Department, grapes are aged in casks for a period of 30 days. In the Bottling Department, the wine is bottled and then sent to the finished goods warehouse. Labor and overhead.
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21 - 1 Process Costing COMPLETION STATEMENTS               189.Process cost systems are used to apply costs to similar products that are ____________ in a ____________ fashion.               190.Separate _________________ accounts are maintained for each production department or manufacturing process in a process cost system.               191.In a process cost system, manufacturing costs are summarized in.
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21 - 1 Process Costing Ex. 167 Hanson Company manufactures a single product by a continuous process, involving two production departments. The records indicate that $120,000 of direct materials were issued to and $200,000 of direct labor was incurred by Department 1 in the manufacture of the product. The factory overhead rate is.
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21 - 1 Process Costing Ex. 165 The Tomato Factory manufactures spaghetti sauce through two production departments: Cooking and Packaging. For the month of February, the work in process accounts show the following debits: CookingPackaging Beginning work in process$    -0-$  6,000 Materials40,00026,000 Labor16,0008,000 Overhead30,00019,000 Costs transferred in65,000 Instructions Journalize the February transactions that involved the work in process accounts. Ex. 166 Baylor Industries.
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21 - 1 Process Costing Ex. 169 The Oxygen Fixation Department of Tomco Manufacturing began the month of December with beginning work in process of 3,000 units that are 100% complete as to materials and 30% complete as to conversion costs. Units transferred out are 12,000 units. Ending work in process contains 5,000.
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21 - 1 Process Costing Ex. 179 Wilson Company has gathered the following information. Units in beginning work in process-0- Units started into production60,000 Units in ending work in process10,000 Percent complete for conversion costs in ending work in process40% Costs incurred: Direct materials$  81,000 Direct labor$  98,000 Overhead$131,500 Instructions (a)Compute equivalent units of production for materials and for conversion costs. (b)Determine the unit costs.
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22 - 1 Cost-Volume-Profit 88.If a company had a contribution margin of $750,000 and a contribution margin ratio of 40%, total variable costs must have been a.$1,125,000. b.$450,000. c.$1,875,000. d.$300,000. 89.Which of the following would not be an acceptable way to express contribution margin? a.Sales minus variable costs b.Sales minus unit costs c.Unit selling price minus unit variable costs d.Contribution.
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21 - 1 Process Costing Ex. 187 The Assembly Department of Mane Company has the following production and cost data at the end of May, 2014. Production:25,000 units started into production; 20,000 units transferred out and 5,000 units 100% completed as to materials and 40% completed as to conversion costs. Manufacturing Costs:Materials added at beginning.
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21 - 1 Process Costing Ex. 177 The ledger of Kegan Company has the following work in process account. Work in Process—Painting 5/1 5/31 5/31 5/31 Balance Materials Labor Overhead 5,390 7,740 4,110 2,470 5/31 Transferred out ? 5/31 Balance ? Production records show that there were 800 units in the beginning inventory, 30% complete, 2,800 units started, and 3,100 units transferred. The beginning work in process had materials cost of $3,060 and.
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21 - 1 Process Costing Ex. 164 Sandlen Company has two production departments: Fabricating and Finishing. Beginning inventories are: Work in Process—Fabricating, $6,030; Work in Process—Finishing, $4,100; and Finished Goods, $5,600. During the month the following transactions occurred: 1.Purchased $40,000 of raw materials on account. 2.Incurred $65,000 of factory labor. Wages are unpaid. 3.Incurred $50,000 of.
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21 - 1 Process Costing EXERCISES Ex. 163 Temple Manufacturing Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system. (a)Purchased raw materials for $50,000 on account. (b)Raw materials requisitioned for production were: Direct materials Mixing department$20,000 Finishing department14,000 (c)Incurred labor costs of $69,000. (d)Factory labor used: Mixing department$34,000 Finishing department25,000 (e)Manufacturing overhead is.
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22 - 1 Cost-Volume-Profit 31.The activity level is represented by an activity index such as direct labor hours, units of output, or sales dollars. 32.The trend in most companies is to have more variable costs and fewer fixed costs. 33.For purposes of CVP analysis, mixed costs must be classified into their fixed and.
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21 - 1 Process Costing a138.Which of the following is not a benefit of activity-based costing? a.More accurate product costing. b.Enhanced control over overhead costs. c.Better management decisions. d.Less costly to use. a139.Which of the following is a limitation of activity-based costing? a.More cost bases. b.Less control over overhead costs. c.Poorer management decisions. d.Some arbitrary allocations continue. 140.A process cost system would.
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21 - 1 Process Costing Ex. 174 The Finishing Department of Edison Manufacturing has the following production and cost data for July: 1.Transferred out, 5,000 units. 2.Started 1,000 units that are 80% completed at July 31. 3.Materials added, $30,000; conversion costs incurred, $23,200. Materials are entered at the beginning of the process. Conversion costs are incurred uniformly.
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21 - 1 Process Costing Ex. 171 Wesley Company adds materials at the beginning of the process and conversion costs are incurred uniformly throughout the process. Instructions Complete the following calculation of equivalent units for materials and conversion costs.     Equivalent Units      Physical UnitsMaterialsConversion Costs Completed and transferred out40,000             Ending work in process Materials             Conversion costs, 80% complete10,000 Total units             Ex. 172 The general ledger.
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22 - 1 Cost-Volume-Profit 78.Ryden Company's activity for the first three months of 2014 are as follows: Machine HoursElectrical Cost January              2,100              $3,600 February              2,600              $4,350 March              2,900              $5,000 Using the high-low method, how much is the cost per machine hour? a.$1.75 b.$2.17 c.$1.72 d.$1.50 79.Taylon's Seafood used high-low data from June and July to determine its variable cost of $18.
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22 - 1 Cost-Volume-Profit 48.If a firm increases its activity level, a.costs should remain the same. b.most costs will rise. c.no costs will remain the same. d.some costs will change, others will remain the same. 49.An activity index might be referred to as a cost a.driver. b.multiplier. c.element. d.correlation. 50.Cost activity indexes might help classify costs as a.temporary. b.permanent. c.variable. d.transient. 51.Which of the following is.
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21 - 1 Process Costing Ex. 185 Meyer Manufacturing Company uses a process cost system. The Molding Department adds materials at the beginning of the process and conversion costs are incurred uniformly throughout the process. Work in process on May 1 was 75% complete and work in process on May 31 was 40%.
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22 - 1 Cost-Volume-Profit 98.Harvey, Inc. sells a product with a contribution margin of $12 per unit, fixed costs of $150,000, and sales for the current year of $200,000. How much is Harvey break-even point? a.9,200 units b.$50,000 c.12,500 units d.4,167 units 99.Surrie Company produces flash drives for computers, which it sells for $20.
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21 - 1 Process Costing 128.Many U.S. firms are switching to JIT processing because a.they desire a "push" approach to manufacturing. b.it eliminates conversion costs. c.it can reduce the funds invested in inventories. d.it is a means of building up inventories. 129.The elements of JIT do not include a.dependable suppliers. b.efficient competitors. c.a total quality control system. d.a multiskilled work force. 130.In.
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21 - 1 Process Costing 48.Which of the following manufacturing cost elements occurs in a process cost system? a.Direct materials. b.Direct labor. c.Manufacturing overhead. d.All of these answer choices are correct. 49.In a process cost system, product costs are summarized: a.on job cost sheets. b.on production cost reports. c.after each unit is produced. d.when the products are sold. 50.When manufacturing overhead costs.
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21 - 1 Process Costing Ex. 175 Mason Corporation uses a process cost system and the weighted-average cost flow assumption. Production begins in the Fabricating Department where materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. On March 1, the beginning work in process.
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22 - 1 Cost-Volume-Profit 58.Which of the following is not a plausible explanation of why variable costs often behave in a curvilinear fashion? a.Labor specialization b.Overtime wages c.Total variable costs are constant within the relevant range d.Availability of quantity discounts 59.Firms operating at 100% capacity a.are common. b.are the exception rather than the rule. c.have no fixed costs. d.have no.
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21 - 1 Process Costing Ex. 188 Romaro Company—Perth Division is a new state of the art production facility that manufactures landing gears for airplanes. The ending September 30th work in process is comprised of labor and overhead and is approximately 60% complete. All materials are assumed to be 100% complete. Total materials.
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21 - 1 Process Costing Ex. 182 Grayson Building Supplies' total materials costs are $40,000 and total conversion costs are $30,000. Equivalent units of production for materials are 10,000, and 6,000 for conversion costs. Instructions Compute the unit costs for materials, conversion costs, and total manufacturing costs for the month. Ex. 183 Gazette, Inc. has the following.
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22 - 1 Cost-Volume-Profit 108.Fixed costs are $750,000 and the variable costs are 75% of the unit selling price. What is the break-even point in dollars? a.$562,500 b.$187,500 c.$1,000,000 d.$3,000,000 109.Fixed costs are $2,400,000 and the contribution margin per unit is $120. What is the break-even point? a.$2,000,000 b.$20,000,000 c.2,000 units d.20,000 units 110.Skye Company has the following data: Variable costs are.
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22 - 1 Cost-Volume-Profit TRUE-FALSE STATEMENTS 1.An activity index identifies the activity that has a causal relationship with a particular cost. 2.A variable cost remains constant per unit at various levels of activity. 3.A fixed cost remains constant in total and on a per unit basis at various levels of activity. 4.If volume increases, all.
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21 - 1 Process Costing SHORT-ANSWER ESSAY QUESTIONS S-A E  203 Why do some companies need a cost accounting system while others do not?  What are the determining characteristics or factors that influence the type of cost accounting system that is appropriate for a company? S-A E  204 The production cost report summarizes the activities that.
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22 - 1 Cost-Volume-Profit 128.Bearrs, Inc. produces hair brushes. The selling price is $20 per unit and the variable costs are $8 per brush. Fixed costs per month are $4,800. If Bearrs sells 30 more units beyond breakeven, how much does profit increase as a result? a.$360 b.$400 c.$240 d.$600 129.The following monthly data are available.
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21 - 1 Process Costing Ex. 176 Given below are the production data for Department No. 3 for the first month of operation: Costs charged to Department 3: Materials$12,000 Labor3,275 Overhead13,600 During this first month of operations, 3,000 units were started into production; 2,500 units were transferred out; and the remaining 500 units are 100% completed with respect.
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21 - 1 Process Costing MATCHING 202.Match the items in the two columns below by entering the appropriate code letter in the space provided. A.Just-in-time processing              F.              Units transferred out B.Equivalent units of production              G.Activity-based costing C.Total units accounted for              H.              Physical units D.Production cost report              I.              Unit production costs E.Cost reconciliation schedule              J.              Total manufacturing cost per.
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22 - 1 Cost-Volume-Profit MULTIPLE CHOICE QUESTIONS 38.For an activity base to be useful in cost behavior analysis, a.the activity should always be stated in dollars. b.there should be a correlation between changes in the level of activity and changes in costs. c.the activity should always be stated in terms of units. d.the activity level should.
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22 - 1 Cost-Volume-Profit a148.              If more units are produced than are sold during a period, variable costing income a.will be greater than absorption costing income. b.will be less than absorption costing income. c.will be the same as absorption costing income. d.may be either greater or less than absorption costing income. 149.Within the relevant range, the.
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22 - 1 Cost-Volume-Profit 21.Both variable and fixed costs are included in calculating the contribution margin. 22.The break-even point is where total sales equal total variable costs. 23.The break-even point is equal to the fixed costs plus net income. 24.If the unit contribution margin is $1 and unit sales are 10,000 units above the.
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21 - 1 Process Costing 108.The last department in a production process shows the following information at the end of the period: Units Beginning Work in Process25,000 Started into Production175,000 Ending Work in Process50,000 How many units have been transferred out to finished goods during the period? a.175,000. b.200,000. c.225,000. d.150,000. 109.A process began the month with 3,000 units in the beginning.
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