Accounting Expert Answers & Study Resources : Page 473

7) Hogan Ltd. uses a standard cost system in its manufacturing process. During a recent job, it noticed that its spoilage rate was high. Normal spoilage rate averages 8% of units started. Direct materials are added at the beginning of the process. Inspection occurs at the 75% point. Other information.

30) Assuming Hawk uses the weighted average method of process costing, the cost per equivalent unit for direct materials and conversion costs respectively are A) $3.20; $6.40. B) $3.44; $6.89. C) $2.81; $6.09. D) $3.64; $6.40. E) $3.22; $6.42. 31) Assuming Hawk uses the FIFO method of process costing, the cost per equivalent unit for direct.

41) New Image Sports uses a process costing system. Direct materials are placed into production at the beginning of the process. All spoilage is normal and is detected at the end of the process. For March the company had the following activities: Beginning work-in-process inventory6,000 units, one-third complete Units placed in production24,000.

41) Vita-Heath Company manufactures three different types of vitamins: vitamin C, vitamin B, and vitamin D. The company uses four operations to manufacture the vitamins: mixing, tabletting, encapsulating, and bottling. Vitamins C and B are produced in tablet form (in the tabletting department) and vitamin D is produced in capsule.

66) The IBP Grocery orders most of its items in lot sizes of 10 units. Average annual demand per side of beef is 720 units per year. Ordering costs are $25 per order with an average purchasing price of $100. Annual inventory carrying costs are estimated to be 40 percent.

25) Robotoys Incorporated manufactures and distributes small robotic toys. Reworked units are common. The average cost of the reworked orders is $11.30: $4.15 for labour, $5.00 for more materials, and $2.15 for overhead. This ratio of costs holds for the average original order. On a recent day, the shop reworked.

18.3   Apply the standard-costing method to account for spoilage. 1) Under standard costing, there is no need to calculate a cost per equivalent unit. 2) Process costing is simplified when using standard costs. 3) The calculation of equivalent units under standard costing is the same as under FIFO. 4) Which of the following.

46) Silver Spoon Incorporated is a manufacturer of kitchen utensils. It produces all of its products in one department. The information for the current month is as follows: Beginning work-in-process37,500 units Units started55,000 units Units completed75,000 units Ending work-in-process14,500 units Spoilage3,000 units Beginning work-in-process direct materials$25,000 Beginning work-in-process conversion$ 10,000 Direct materials added during month$113,750 Direct manufacturing labour.

For each of the following items identify whether it is spoilage, reworked units, or scrap. A) scrap B) spoilage C) spoilage and rework 44) Defective jeans sold as seconds 45) Shavings 46) Edges from plastic moldings 47) Carpets sold as seconds 48) Precision tools that are not built successfully to the necessary tolerance, but which can be successfully.

17.5   Apply process-costing methods to report transferred-in costs. 1) Transferred-in costs are an allocated indirect cost in process costing. 2) Transferred in costs are costs which have been incurred in a preceding department. 3) An operation-costing system is a hybrid costing system, applied to batches of similar products. 4) Operation-costing captures the non-financial impact.

Use the information below to answer the following question(s). Waldorf Computer Systems, Inc. manufactures computer memory cards, and uses process-costing. All direct materials are added at the inception of the production process. The accounting department noted that there was no beginning inventory for January. Direct Materials purchases totalled $150,000 during the.

73) Morrissette Ltd. sells 240,000 units a year. Its carrying costs are $0.10 per unit and its ordering costs are $187.50 per order. Required: a.Calculate the economic order quantity. b.The supplier has offered a $0.02 discount per unit (on all units) if the order size is 80,000 units. Should Morrissette increase its order.

51) What are the Wood Furniture Company annual total relevant costs, assuming the quantity ordered equals 500 units? A) $3,500 B) $500 C) $4,000 D) $3,750 E) $3,350 52) How many deliveries will Wood Furniture Company require at the economic order quantity? A) 1.0 delivery B) 5.1 deliveries C) 8.2 deliveries.

19) The Laramie Factory produces expensive boots. It has two departments that process all the items. During January, the beginning work in process in the tanning department was 40% complete as to conversion and 100% complete as to direct materials. The beginning inventory included $6,000 for materials and $18,000 for.

15) Lexington Company produces baseball bats and cricket paddles. It has two departments that process all products. During July, the beginning work in process in the cutting department was half completed as to conversion, and complete as to direct materials. The beginning inventory included $40,000 for materials and $60,000 for.

27) Marvin Randall had a background in the manufacturing of building bricks. The building brick industry used clay and other material which were first mixed, then aged. After aging, they were molded into shapes, retouched and fired in kilns. The materials were fairly durable and spoilage was not significant. As.

38) You are the chief financial officer of a lumber mill, and you are becoming quite concerned about the spoilage, scrap, and reworked items associated with your production processes. Your firm produces mainly products for the building industry. Required: Discuss the problems associated with these items and the methods your company.

10) A company manufactures draperies. Because of strict production specifications, the manufacturing department often has spoiled items. If the spoiled items are under 10 percent of a job's total items they are treated as normal spoilage. During February job #101 for 200 draperies had 16 spoiled items. The spoiled items.

18.4   Apply job cost allocation procedures to account for spoilage in job costing. 1) Spoilage can be attributed to a particular job in a process costing system. 2) The costs of normal spoilage are usually assigned to individual jobs in job costing. 3) When normal spoilage is detected, the work-in-process control account is.

20) Which of the following journal entries correctly represents the transfer of completed goods for the current period using the FIFO method of process costing? A) Finished Goods $10,560.28         Loss from Spoilage $10,560.28 B) Loss from Spoilage $5,026.80         Finished Goods $5,026.80 C) Finished Goods $311,500.00         Work-in-Process $311,500.00 D) Finished Goods $401,700.00         Work-in-Process $401,700.00 E) Finished Goods $322,224.20         Work-in-Process $322,224.20 21) Boss Cycle generally has spoiled goods.

36) Busy Hands Craft Company is a small manufacturing company that specialized in arts and crafts items. It recently bought an old textile mill that it has refurbished to manufacture and dye special cloth to be sold in its craft shops. However, it discovered something new for its accounting system..

18) The president of Sampson Ltd. has approached the controller for the company with concerns over the projected year end results. The company needs to present its financial statements to the bank to renew its loan and the president is concerned that the loan may either be denied, or the.

69) The annual demand for a company's product is 3,750 units, and monthly demand varies from 200 to 400 units with the following probability of demand: 200 units have a 25 percent probability 300 units have a 50 percent probability 400 units have a 25 percent probability The EOQ model provides an optimal order.

  19.1   Evaluate relevant data and decide on the economic order quantity (EOQ). 1) Ordering costs consist of the costs of goods acquired from suppliers including freight and transportation costs. 2) Purchasing costs consist of the costs of preparing and issuing a purchase order. 3) Carrying costs arise when a customer demands a unit.

31) How many deliveries will be required at the economic order quantity level? A) 18 deliveries B) 37 deliveries C) 42 deliveries D) 52 deliveries E) 20 deliveries 32) The level of inventory which should trigger a new order is called A) the customer demand level. B) the supply equal demand level. C) the stockout level. D) the reorder point. E).

45) Playtime Ltd. manufactures toys in two departments: Forming and Finishing. During August, the beginning WIP in the Forming Department was 38% complete with respect to conversion, direct materials are added at the beginning of the process. The beginning inventory in Forming included $36,400 for materials and $9,400 for conversion.

40) The Skate Board Company uses a process cost system for making skateboard wheels. Materials are added at the beginning of the process and conversion costs are uniformly incurred. At the beginning of September the work-in-process is 40 percent complete and at the end of the month it is 60.

11) Conceptually transferred-in costs from another department are similar to A) direct labour. B) finished goods inventory. C) direct labour and materials. D) manufacturing overhead. E) materials provided by external suppliers. 12) An operation costing system would be applicable to A) batches of similar products where each batch is a variation of a single design. B) the construction.

41) What are the objectives in accounting for spoilage? 42) Spoilage can be a significant cost for many organizations. Discuss when spoilage might happen and how the costs of normal spoilage get allocated. 43) For each of the following items identify whether it is spoilage, reworked units, or scrap. ________a.Defective jeans sold.

63) The annual demand for red, medium polo shirts, for Clothes, Inc. is 25,000 units. The cost of placing an order is $80, and the cost of carrying one unit in inventory for one year is $25. Required: a.Use the economic order quantity model to determine the optimal order size. b.Determine the reorder.

22) Boutin Company uses a job costing system. During October, the following costs are incurred on Job 110 to manufacture 200 motors: Original costs: Direct materials$6,600 Direct manufacturing labour8,000 Manufacturing overhead allocated (150% of direct manufacturing labour)12,000 Total $26,600 Direct cost of reworking 10 motors: Direct materials$1,000 Direct manufacturing labour1,600 Total$2,600 Required: a.Prepare the journal entry to record the rework costs, assuming.

11) Shrinkage is measured by comparing the cost of inventory on the books to the cost of inventory physically counted. 12) All inventory costs are available in financial accounting systems. 13) To determine the Economic Order Quantity, the relevant ordering costs are minimized and the relevant carrying costs are maximized. 14) The.

16) General Fabricators assembles its product in several departments. It has two departments that process all units. During October, the beginning work in process in the cutting department was half completed as to conversion, and complete as to direct materials. The beginning inventory included $12,000 for materials and $3,000 for.

11) IFRS/ASPE permits normal spoilage costs to be part of cost of goods sold. 12) Deducting the disposal value from the costs of the spoiled goods accumulated to the point of inspection equals A) the net cost of discarded goods. B) the net cost of reworked goods. C) the net cost of spoilage. D) the.

21) Costs incurred when preparing and issuing purchase orders are included in which of the following categories? A) carrying costs B) ordering costs C) purchasing costs D) stockout costs E) stockin costs 22) An important component in several of the cost categories which are not typically recorded in accounting systems is A) labour costs. B) opportunity costs. C) ordering.

42) What is the difference between a weighted-average method of process costing and a first-in, first-out method of process costing? 43) Universal Industries operates a division in Brazil, a country with very high inflation rates. Traditionally, the company has used the same costing techniques in all countries so as to.

  18.1   Distinguish among spoilage, rework, and scrap, and apply the appropriate methods to account for normal and abnormal spoilage. 1) Scrap products may be reprocessed and subsequently sold as a finished good. 2) The costs of abnormal spoilage are written off as a loss; however, the costs of normal spoilage are treated.

18.5   Apply cost allocation procedures to account for reworked units and scrap. 1) An example of rework is when a shoe manufacturer uses leftover leather from shoes to make leather watch bands. 2) Accounting for rework in process-costing requires that abnormal rework be distinguished from normal rework. 3) One of the major aspects.

44) Dutton Industries is a manufacturer of cleaning products. Its main product goes through two departments: Mixing and Bottling. During June, the beginning WIP in the Mixing department was 32% complete as to conversion cost. The beginning inventory included $15,200 for materials and $19,800 for conversion costs. Ending WIP in.

Use the information below to answer the following question(s). Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some.

11) When abnormal rework is distinguished from normal rework, and charged to a separate loss account, which of the following is a likely result? A) Prices will have to increase on the company's products accordingly. B) The amount of normal spoilage unfavourable efficiency variances will be less. C) The amount of normal spoilage.

41) Which of the following statements is TRUE? A) The reorder point is the point at which the amount of inventory on hand equals the amount needed to cover sales during the lead time. B) The reorder point is the minimum level of inventory allowed during a particular period. C) The safety stock.

43) Weather Instruments assembles products from component parts. It has two departments that process all products. During January the beginning work-in-process in the assembly department was half completed as to conversion and complete as to direct materials. The beginning inventory included $12,000 for materials and $4,000 for conversion costs. Overhead.

38) Viking Sports is a manufacturer of sport swear. It produces all of its products in one department. The information for the current month is as follows: Beginning work-in-process20,000 units Units started40,000 units Units completed50,000 units Ending work-in-process8,000 units Spoilage2,000 units Beginning work-in-process direct materials$12,000 Beginning work-in-process conversion$4,000 Direct materials added during month$60,000 Direct manufacturing labour during month$20,000 Beginning work-in-process.

17) Caulfield Ltd. has two production departments in the manufacturing of its products. In the first department, Fabricating, component parts are manufactured. In the second department, Assembly, the components are assembled and finished. Direct materials are added at the start of production in Fabricating and at the 90% point of.

34) Redwing Shoes manufactures shoes. All direct materials are included at the inception of the production process. For March there were 2,000 units in beginning inventory with a direct material cost of $1,000. Direct materials totalled $20,000 for the month. Work-in-process records revealed that 40,000 shoes were started in March.

76) Beta Industries is currently experiencing problems with its inventory of hammer heads. Its manager, Laura Engles currently orders the hammer heads in batches of 6,000. Six orders are placed during the year to meet the estimated sales demand of 36,000 units. Each order costs $75 and each unit costs.

31) Marble Shop manufactures marble products. All direct materials are included at the inception of the production process. For April there was no beginning inventory in the processing plant. Direct materials totalled $420,000 for the month. Work-in-process records revealed that 7,500 tonnes were started in April and that 5,500 tonnes.

28) When a unit has to be reworked, the rework may be classified in three ways. What are those ways, and how does the accounting for each differ? 29) There are two alternative points in time for recognizing scrap in the accounting records. What are these two points in time?.

21) Which of the following is the correct journal entry if the scrap created by Job 124 is subsequently used by another job? A) Materials Control 90     Manufacturing Overhead Control 90 B) Work-in-Process Control 90     Manufacturing Overhead Control 90 C) Manufacturing Overhead Allocated 90     Manufacturing Overhead Control 90 D) Work-in-Process Control 90     Manufacturing Overhead Allocated 90 E) Work-in-Process Control 90     Materials Control 90 .