Managerial Accounting Question Paper
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1. | Question : | (TCO F) Assume there is no beginning work in process inventory and the ending work in process inventory is 100% complete with respect to materials costs. The number of equivalent units with respect to materials costs under the weighted-average method is: | | | Student Answer: | | the same as the number of units put into production. | | | | less than the number of units put into production. | | | | the same as the number of units completed. | | | | less than the number of units completed. | | Instructor Explanation: | Chapter 4 | | | | Points Received: | 0 of 5 | | Comments: | | | |
2. | Question : | (TCO F) Luft Company uses the weighted-average …show more content…
| Question : | (TCO F) Whether a company uses process costing or job-order costing depends on its industry. A number of companies in different industries are listed below: i. Brick manufacturer ii. Contract printer that produces posters, books, and pamphlets to order iii. Natural gas production company iv. Dairy farm
v. Coal mining company vi. Specialty coffee roaster (roasts small batches of specialty coffee beans)
For each company, indicate whether the company is most likely to use job-order costing or process costing. | | | Student Answer: | | i. Process Costing ii. Job-order Costing iii. Process Costing iv. Process Costing v. Process costing vi. Job-order Costing | | Instructor Explanation: | i. Brick manufacturer | Process Costing | ii. Contract printer that produces posters, books, and pamphlets to order | Job Order Costing | iii. Natural gas production company | Process Costing | iv. Dairy farm | Process Costing | v. Coal mining company | Process Costing | vi. Specialty coffee roaster (roasts small batches of specialty coffee beans) | Job Order Costing | | | | | Points Received: | 15 of 15 | | Comments: | | | …show more content…
Equivalent units of production for materials and conversion costs. Materials Conversion Units completed and transferred out...........450,000 450,000 Ending work in process: Materials (150,000 x 100%)......................150,000 Conversion (150,000 x 50%).......................................75,000 ------------------------ Equivalent units of production....................600,000 525,000 ===== ====== Ending work in process: Work in process beginning....................100,000 Units started in production...................500,000 --------- Total work in process for the period......600,000 Less: Units completed..........................450,000 ---------- Ending work in process........................150,000 ii. Cost transferred to finished goods. Materials cost per equivalent unit: (100,000+ 650,000)/ 600,000 = $1.25 per equivalent unit Conversion cost per equivalent unit: (157,500+997,500) / 525,000 = $2.2 per equivalent unit Cost transferred out 450,000 x (1.25+2.2)=$1,552,500 ======== iii.Cost assigned to ending work in process inventory Materials costs: 150,000 x $1.25 = $187,500 Conversion costs: (150,000 x 50%) x $2.2) = $165,000 -------------- Cost assigned to ending work in process inventory $352,500 =======
1. | Question : | (TCO F) Assume there is no beginning work in process inventory and the ending work in process inventory is 100% complete with respect to materials costs. The number of equivalent units with respect to materials costs under the weighted-average method is: | | | Student Answer: | | the same as the number of units put into production. | | | | less than the number of units put into production. | | | | the same as the number of units completed. | | | | less than the number of units completed. | | Instructor Explanation: | Chapter 4 | | | | Points Received: | 0 of 5 | | Comments: | | | |
2. | Question : | (TCO F) Luft Company uses the weighted-average …show more content…
| Question : | (TCO F) Whether a company uses process costing or job-order costing depends on its industry. A number of companies in different industries are listed below: i. Brick manufacturer ii. Contract printer that produces posters, books, and pamphlets to order iii. Natural gas production company iv. Dairy farm
v. Coal mining company vi. Specialty coffee roaster (roasts small batches of specialty coffee beans)
For each company, indicate whether the company is most likely to use job-order costing or process costing. | | | Student Answer: | | i. Process Costing ii. Job-order Costing iii. Process Costing iv. Process Costing v. Process costing vi. Job-order Costing | | Instructor Explanation: | i. Brick manufacturer | Process Costing | ii. Contract printer that produces posters, books, and pamphlets to order | Job Order Costing | iii. Natural gas production company | Process Costing | iv. Dairy farm | Process Costing | v. Coal mining company | Process Costing | vi. Specialty coffee roaster (roasts small batches of specialty coffee beans) | Job Order Costing | | | | | Points Received: | 15 of 15 | | Comments: | | | …show more content…
Equivalent units of production for materials and conversion costs. Materials Conversion Units completed and transferred out...........450,000 450,000 Ending work in process: Materials (150,000 x 100%)......................150,000 Conversion (150,000 x 50%).......................................75,000 ------------------------ Equivalent units of production....................600,000 525,000 ===== ====== Ending work in process: Work in process beginning....................100,000 Units started in production...................500,000 --------- Total work in process for the period......600,000 Less: Units completed..........................450,000 ---------- Ending work in process........................150,000 ii. Cost transferred to finished goods. Materials cost per equivalent unit: (100,000+ 650,000)/ 600,000 = $1.25 per equivalent unit Conversion cost per equivalent unit: (157,500+997,500) / 525,000 = $2.2 per equivalent unit Cost transferred out 450,000 x (1.25+2.2)=$1,552,500 ======== iii.Cost assigned to ending work in process inventory Materials costs: 150,000 x $1.25 = $187,500 Conversion costs: (150,000 x 50%) x $2.2) = $165,000 -------------- Cost assigned to ending work in process inventory $352,500 =======