Accounting 2: Test Bank

The portion of whole units that were completed with respect to either materials conversion costs within a given accounting period is the definition of:

One of the differences in accounting for a process costing system compared to a job order system is that the amounts used to transfer goods from one department to the next comes from the cost of production report instead of job cost cards.

Department B had 3,000 units in Work in process tat were 25% completed at the beginning of t period at a cost of $12,500. 13,700 units were completed during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for conversion if the FIFO, is used to cost inventories was:

For which of the following businesses would a process cost system be appropriate?

If the products of a manufacturing process are produced to customer specifications, a process cost system is more appropriate than a job order cost system.

Company manufacturers widgets and they use process costing. The status of their beginning and ending inventory is as follows: Beg. Inventory: 30% of the manufacturing process is compete. Ending Inventory: 55% of the manufacturing process is complete. Direct materials are added to the manufacturing process in stages. None are added when production begins. Approximately 1/2 of the materials are added when the product is 25% complete. The other half is added when the product is 50% complete. What % complete are Beginning Inventory and Ending Inventory with respect to Direct materials (DM) and Conversion Cost (CC)?

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $100,000, $125,000, and $150,000 respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 3 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 3 totaled $75,000 and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 3 during the period for direct materials is:

Equivalent units of production are the number of units that could have been manufactured from start to finish during an accounting period.

Which of the following is not a characteristic of a process cost system?

The first step in determining the cost of goods completed and ending inventory valuation using process costing is to calculate equivalent units of production.

Just-in-time operations attempt to significantly reduce inspection time and moving time.

In applying the FIFO method of costing inventories, if 8,000 units which are 30% completed are in process at June 1. 28,000 units are completed during June, and 4,000 units were 80% completed at June 30, the number of equivalent units of production or June was 28,600.

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $100,000, $125,000, and $150,000 respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000 and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 2 during the period for direct materials is:

which of the following is NOT a way in which process and job order cost systems are similar?

In a process cost system, the amount of work in process inventory is valued by:

The following production data were taken from the records of the Finishing Department for June: Inventory in process, 6-1 ( 30% completed) 4,000 units Completed units during June 71,000 units Ending inventory (60% complete) 7,000 units Determine the number of conversion equivalent units of production in the June 30 Finishing Department inventory, assuming that the FIFO method is used to cost inventories.

The following unit data were assembled for the assembly process of the Super Co. for the month of June. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO process. Units Beginning work in process 5,000 (60% complete) Units started in September 51,000 Ending work in process 4,000 (30% complete) The number of equivalent units produced with respect to conversion costs is:

e debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows: April 1, work in process: Materials cost, 3,000 units $ 7,200 Conversion costs, 3,000 units, 40% completed 6,000 Materials added during April, 10,000 units 25,000 Conversion costs during April 30,800 Goods finished during April, 12,000 units --- April 30 work in process, 1,000 units, 40% completed --- All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The conversion cost per equivalent unit for April is:

Department R had 5,000 units in work in process that were 75% completed as to labor and overhead at the beginning of the period, 30,000 units of direct materials were added during the period, 32,000 units were completed during the period, and 3,000 units were 40% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for conversion costs for the period was:

If the unit selling price is $40, the volume of sales is $3,000,000, sales at the break-even point amount to $2,500,000, and the maximum possible sales are $3,300,000, the margin of safety is 11,500 units.

If sales are $914,000, variable costs are $514,800, and operating income is $260,000, what is the contribution margin ratio?

If fixed costs are $750,000 and variable costs are 60% of sales, what is the break-even point (dollars)?

Which of the following activity bases would be the most appropriate for food costs of a hospital?

Carter Co. sells two products, Arks and Bins. Last year Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Arks $120 $80 $40 Bins 80 60 20 What was Carter Co.'s weighted average variable cost?

If a business had a margin of safety ratio of 20%, variable costs of 75% of sales, fixed costs of $240,000, a break-even point of $960,000, and operating income of $60,000 for the current year, what are the current year's sales?

Costs that vary in total in direct proportion to changes in an activity level are called:

Zorino Corporation sells product W for $125 per unit, the variable cost per unit is $90, the fixed costs are $450,000, and Zorino is in the 30% corporate tax bracket. What are the sales (dollars) required to earn a net income (after tax) of $25,000?

Break-even analysis is one type of cost-volume-profit analysis

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the cost-volume-profit chart.

The adoption of variable costing for managerial decision making is based on the premise that fixed factory overhead costs are related to productive capacity of the manufacturing plant and are normally not affected by the number of units produced.

If fixed costs are $39,600, the unit selling price is $42, and the variable costs are $24, what is the break-even sales (units)?

Given the following cost and activity observations for Taco Company's utilities, use the high-low method to calculate Taco's variable utilities costs per machine hour. Cost Machine Hours May $8,300 15,000 June 10,400 20,000 July 7,200 12,000 August 9,500 18,000

Manley Co. manufactures office furniture. During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625. In its slowest month, the company made 1,800 desks at a cost of $49,500. Using the high-low method of cost estimation, total fixed costs are:

If fixed costs are $850,000 and the unit contribution margin is $50, profit is zero when 15,000 units are sold.

If fixed costs are $1,500,000, the unit selling price is $250, and the unit variable costs are $130, what is the amount of sales required to realize an operating income of $200,000?

The dollars available from each unit of sales to cover fixed cost and profit is the unit variable cost.

If a business had a capacity of $8,000,000 of sales, actual sales of $5,000,000, break-even sales of $3,500,000, fixed costs of $1,400,000, and variable costs of 60% of sales, what is the margin of safety expressed as a percentage of sales?

Costs that remain constant in total dollar amount as the level of activity changes are called:

The following production data were taken from the records of the Finishing Department for June: Inventory in process, 6-1, 25% completed 1,500 units Transferred to finished goods during June 5,000 units Equivalent units of production during June 5,200 units Determine the number of equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories. Assume the completion percentage of 25% applies to both direct materials and conversion costs.

Which of the following best describes the effect on direct labor when management adopts a just-in-time environment?

The company maintains several standards for the allocation of indirect labor to factory overhead. 70% of Stockhandlers wages are allocated to Stamping and 30% to Finishing. Supervisors are allocated at 60% to Stamping and 20% to Finishing while the balance is left as a period expense due to activities outside production. Because of the ratio of production equipment to office equipment 40% of depreciation is allocated to Stamping, 30% is allocated to Finishing while the balance is left as a period expense representing office equipment. If the stockhandlers wages are $2,750, the supervisors wages are $4,550, and the depreciation for the period is $15,000, the proper journal entry would be:

The following unit data were assembled for the assembly process of the Super Co. for the month of June. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO process. Units Beginning work in process 5,000 (60% complete) Units started in September 51,000 Ending work in process 4,000 (30% complete) The number of equivalent units produced with respect to direct materials costs is:

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 1 during the period for direct materials is:

Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: On July 1: Beginning inventories 850 units, 60% complete Direct materials cost $5,000 Conversion costs $4,000 During July: Number of units started 15,000 Direct materials added $155,000 Conversion costs added $83,520 On July 31: Ending inventories 1,600 units, 40% complete Using the FIFO method, the cost per equivalent unit for materials used during July was

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs from Department 1 into Department 2 during the period is:

If a company uses a process costing system to account for the costs in its four production departments, how many Work-in-Process will it use?

The amount journalized showing the cost added to finished goods is taken from the cost of production report.

Equivalent production units, usually are determined for

Equivalent units of production are the number of units that could have been manufactured from start to finish during an accounting period.

The closer a company moves towards Just in Time production, the differences in unit costs between average costing and FIFO will be reduced.

Which of the following is not characteristic of a process cost system?

In a process cost system, the cost of completed production in Department A is transferred to Department B by which of the following entries?

The two categories of cost comprising conversion costs are:

If the costs for direct materials, direct labor, and factory overhead were $277,300, $52,600, and $61,000, respectively, for 14,000 equivalent units of production, the total conversion cost was $390,900.

The Harold Corporation just started business in January of 2010. They had no beginning inventories. During 2010 they manufactured 12,000 units of product, and sold 10,000 units. The selling price of each unit was $20. Variable manufacturing costs were $4 per unit, and variable selling and administrative costs were $2 per unit. Fixed manufacturing costs were $24,000 and fixed selling and administrative costs were $6,000. What would be the Harold Corporations Net income for 2010 using direct costing

If fixed costs are $200,000 and the unit contribution margin is $20, what amount of units must be sold in order to have a zero profit?

Variable costs as a percentage of sales for Lemon Inc. are 80%, current sales are $600,000, and fixed costs are $130,000. How much will operating income change if sales increase by $40,000?

If sales are $820,000, variable costs are 58% of sales, and operating income is $260,000, what is the contribution margin ratio?

If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution margin ratio is 60%.

Garmo Co. has an operating leverage of 5. Next year's sales are expected to increase by 10%. The company's operating income will increase by 50%.

The dollars available from each unit of sales to cover fixed cost and profit is the unit variable cost.

With the aid of computer software, managers can vary assumptions regarding selling prices, costs, and volume and can immediately see the effects of each change on the break-even point and profit. Such an analysis is called:

A mixed cost has characteristics of both a variable and a fixed cost.

If fixed costs are $750,000 and variable costs are 80% of sales, what is the break-even point in sales dollars?

Which of the following describes the behavior of the variable cost per unit?

Variable costs are costs that vary in total in direct proportion to changes in the activity level

If fixed costs are $39,600, the unit selling price is $42, and the variable costs are $24, what is the break-even sales (unit ) if the variable costs are decreased by $2?

The relevant range is useful for analyzing cost behavior for management decision-making purposes.

Which of the following statements is correct concerning variable and fixed costs?

When the fixed costs are $120,000 and the contribution margin is $20, the break-even point is

The difference between the current sales revenue and the sales at the break-even point is called the:

Carter Co. sells two products, Arks and Bins. Last year Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Arks $120 $80 $40 Bins 80 60 20 What was Carter Co.'s weighted average unit contribution margin?

The Harold Corporation just started business in January of 2010. They had no beginning inventories. During 2010 they manufactured 12,000 units of product, and sold 10,000 units. The selling price of each unit was $20. Variable manufacturing costs were $4 per unit, and variable selling and administrative costs were $2 per unit. Fixed manufacturing costs were $24,000 and fixed selling and administrative costs were $6,000. What would be the difference in Harold Corporation's Net income for 2010 if they used direct costing instead of absorption costing?

The debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows: April 1, work in process: Materials cost, 3,000 units $ 7,500 Conversion costs, 3,000 units, 80% completed 6,000 Materials added during April, 10,000 units 29,000 Conversion costs during April 35,000 Goods finished during April, 11,500 units --- April 30 work in process, 1,500 units, 60% completed --- All direct materials are placed in process at the beginning of the process and the average cost method is used to cost inventories. The materials cost per equivalent unit (to the nearest cent) for April is:

Department A had 4,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 29,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for material costs for the period was:

The FIFO method of process costing is simpler than the Average cost method.

If 10,000 units which were 40% completed are in process at November 1, 80,000 units were completed during November, and 12,000 were 20% completed at November 30, the number of equivalent units of production for November was 75,600. (Assume no loss of units in production and that inventories are costed by the first-in, first-out method.)

Companies that use the average costing method for process costing have unit costs that include costs from more that one accounting period.

The debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows: April 1, work in process: Materials cost, 3,000 units $ 8,000 Conversion costs, 3,000 units, 66.7% completed 6,000 Materials added during April, 10,000 units 30,000 Conversion costs during April 31,000 Goods finished during April, 11,500 units --- April 30 work in process, 1,500 units, 50% completed --- All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The materials cost per equivalent unit for April is:

The first step in determining the cost of goods completed and ending inventory valuation using process costing is to calculate equivalent units of production.

Department S had no work in process at the beginning of the period. 12,000 units of direct materials were added during the period at a cost of $84,000, 9,000 units were completed during the period, and 3,000 units were 30% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $49,500 and factory overhead was $9,900. The total cost of units completed during the period were:

Companies recognizing the need to simultaneously produce products with high quality, low cost, and instant availability have adopted a just-in-time processing philosophy.

In applying the first-in, first-out method of costing inventories, if 8,000 units which are 30% completed are in process at June 1, 28,000 units are completed during June, and 4,000 units were 80% completed at June 30, the number of equivalent units of production for June was 28,600.

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. Work in process at the beginning of the period for Department 1 was $75,000, and work in process at the end of the period totaled $60,000. The records indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 2 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 3 during the period is:

Industries that typically use process cost systems include chemicals, oil, metals, food, paper, and pharmaceuticals.

The following unit data were assembled for the assembly process of the Super Co. for the month of June. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO process. Units Beginning work in process 5,000 (60% complete) Units started in September 51,000 Ending work in process 4,000 (30% complete) The number of equivalent units produced with respect to direct materials costs is:

The amount journalized showing the cost added to finished goods is taken from the cost of production report

Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs?

The debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows: April 1, work in process: Materials cost, 3,000 units $ 7,500 Conversion costs, 3,000 units, 80% completed 6,000 Materials added during April, 10,000 units 29,000 Conversion costs during April 35,000 Goods finished during April, 11,500 units --- April 30 work in process, 1,500 units, 60% completed --- All direct materials are placed in process at the beginning of the process and theaverage cost method is used to cost inventories. The conversion cost per equivalent unit (to the nearest cent) for April is:

If Department H had 500 units, 60% completed, in process at the beginning of the period, 6,000 units were completed during the period, and 600 units were 30% completed at the end of the period, what was the number of equivalent units of production for the period if the first-in, first-out method is used to cost inventories?

If 16,000 units of materials enter production during the first year of operations, 12,000 of the units are finished, and 4,000 are 75% completed, the number of equivalent units of production would be 15,000.

The two categories of cost comprising conversion costs are:

If the costs for direct materials, direct labor, and factory overhead were $277,300, $52,600, and $61,000, respectively, for 14,000 equivalent units of production, the total conversion cost was $390,900

Manley Co. manufactures office furniture. During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625. In its slowest month, the company made 1,800 desks at a cost of $49,500. Using the high-low method of cost estimation, total fixed costs are:

The contribution margin ratio is the same as the profit-volume ratio.

If the costs for direct materials, direct labor, and factory overhead were $522,200, $82,700, and $45,300, respectively, for 16,000 equivalent units of production, the conversion cost per equivalent unit was $8.00.

Assume that Corn Co. sold 8,000 units of Product A and 2,000 units of Product B during the past year. The unit contribution margins for Products A and B are $30 and $60 respectively. Corn has fixed costs of $378,000. The break-even point in units is:

The Rocky Company reports the following data. Sales $700,000 Variable costs $300,000 Fixed costs $120,000 Rocky Company's operating leverage is:

Which of the following describes the behavior of the fixed cost per unit?

Given the following costs and activities for Downing Company electrical costs, use the high-low method to calculate Downings's variable electrical costs per machine hour. Costs Machine Hours April $11,700 15,000 May $13,200 17,500 June $11,400 14,500

The relative distribution of sales among the various products sold by a business is termed the:

Which of the following is NOT an example of a cost that varies in total as the number of units produced changes?

Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $ 250 Unit variable cost 100 Total fixed costs $840,000 The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be:

If sales are $400,000, variable costs are 75% of sales, and operating income is $50,000, what is the operating leverage?

The adoption of variable costing for managerial decision making is based on the premise that fixed factory overhead costs are related to productive capacity of the manufacturing plant and are normally not affected by the number of units produced.

A mixed cost has characteristics of both a variable and a fixed cost.

Zipee Inc.'s unit selling price is $90, the unit variable costs are $40.50, fixed costs are $170,000, and current sales are 12,000 units. How much will operating income change if sales increase by 5,000 units?

Which of the following is NOT an example of a cost that varies in total as the number of units produced changes?

If fixed costs are $850,000 and the unit contribution margin is $50, profit is zero when 15,000 units are sold.

Rusty Co. sells two products, X and Y. Last year Rusty sold 5,000 units of X's and 35,000 units of Y's. Related data are: Unit Selling Price Unit Variable Unit contribution Product Price Cost Margin X $110 $70 $40 Y 70 50 $20 What was Rusty Co.'s weighted average unit selling price?

Department G had 3,600 units, 40% completed at the beginning of the period, 12,000 units were completed during the period, 2,000 units were one-fifth completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period: Work in process, beginning of period $60,000 Costs added during period: Direct materials (10,400 at $9.8365) 102,300 Direct labor 79,800 Factory overhead 25,200 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the equivalent units for materials and conversion costs, respectively.

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs from Department 1 into Department 2 during the period is:

Both job order and process cost accounting use equivalent units of production to determine costs.

The debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows: April 1, work in process: Materials cost, 3,000 units $ 7,200 Conversion costs, 3,000 units, 60% completed 6,000 Materials added during April, 10,000 units 25,000 Conversion costs during April 35,750 Goods finished during April, 12,000 units --- April 30 work in process, 1,000 units, 40% completed --- All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The materials cost per equivalent unit for April is:

One of the primary uses of a cost of production report is to assist management in controlling production costs.

Department S had no work in process at the beginning of the period. 12,000 units of direct materials were added during the period at a cost of $84,000, 9,000 units were completed during the period, and 3,000 units were 30% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $49,500 and factory overhead was $9,900. The total conversion costs for the period were:

The FIFO method of process costing is simpler than the Average cost method.

Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories was:

Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. Of the $12,500, $8,000 was for material and $4,500 was for conversion costs. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. If the average cost method is used the material cost per unit (to the nearest cent) would be:

Department G had 3,600 units, 25% completed at the beginning of the period, 15,000 units were completed during the period, 3,000 units were one-fifth completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period: Work in process, beginning of period $40,000 Costs added during period: Direct materials (10,400 at $8) 83,200 Direct labor 63,000 Factory overhead 25,000 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the total cost of the units "started and completed" during the period (round unit cost calculations to four decimal places)?

Process manufacturers typically use large machines to process a continuous flow of raw materials into a finished state.

Department J had no work in process at the beginning of the period, 18,000 units were completed during the period, 2,000 units were 30% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period (Assuming the company uses FIFO and rounds average cost per unit to two decimal places): Direct materials (20,000 at $5) $ 100,000 Direct labor 142,300 Factory overhead 57,200 Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the departmental work in process inventory at the end of the period?

Which of the following entities would probably use a process costing system?

Department B had 3,000 units in Work in Process that were 25% completed at the beginning of the period at a cost of $12,500. 13,700 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories was:

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 1 during the period for direct labor is:

Carmelita Inc., has the following information available: Costs from Costs from Beginning Inventory Current Period Direct materials $2,500 $22,252 Conversion Costs 6,200 150,536 At the beginning of the period, there were 500 units in process that were 60 percent complete as to conversion costs and 100 percent complete as to direct materials costs. During the period 4,500 units were started and completed. Ending inventory contained 340 units that were 30 percent complete as to conversion costs and 100 percent complete as to materials costs. (Assume that the company uses the FIFO process cost method.)

If the costs for direct materials, direct labor, and factory overhead were $277,300, $52,600, and $61,000, respectively, for 14,000 equivalent units of production, the total conversion cost was $390,900.

Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: On July 1: Beginning inventories 850 units, 60% complete Direct materials cost $5,000 Conversion costs $4,000 During July: Number of units started 15,000 Direct materials added $155,000 Conversion costs added $83,520 On July 31: Ending inventories 1,600 units, 40% complete Using the FIFO method, the number of units started and completed in July was

If Department H had 600 units, 60% completed, in process at the beginning of the period, 8,000 units were completed during the period, and 500 units were 30% completed at the end of the period, what was the number of equivalent units of production for the period if the first-in, first-out method is used to cost inventories?

If the products of a manufacturing process are produced to customer specifications, a process cost system is more appropriate than a job order cost system.

The following production data were taken from the records of the Finishing Department for June: Inventory in process, 6-1, 25% completed 1,500 units Transferred to finished goods during June 5,000 units Equivalent units of production during June 5,200 units Determine the number of equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories. Assume the completion percentage of 25% applies to both direct materials and conversion costs.

Equivalent production units, usually are determined for direct materials and conversion costs. In a process cost system, the cost of completed production in Department A is transferred to Department B by which of the following entries?

The four steps necessary to determine the cost of goods completed and the ending inventory valuation in a process cost system are: 1. allocate costs to transferred and partially completed units 2. determine the units to be assigned costs 3. determine the cost per equivalent unit 4. calculate equivalent units of production The correct ordering of the steps is:

In a process cost system, product costs are accumulated by processing department rather than by job.

The closer a company moves towards Just in Time production, the differences in unit costs between average costing and FIFO will be reduced.

Department G had 3,600 units, 40% completed at the beginning of the period, 12,000 units were completed during the period, 2,000 units were one-fifth completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period: Work in process, beginning of period $60,000 Costs added during period: Direct materials (10,400 at $9.8365) 102,300 Direct labor 79,800 Factory overhead 25,200 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the material and conversion cost per unit (to the nearest penny), respectively.

In process cost accounting, the costs of direct materials and direct labor are charged directly to:

Conversion costs include materials, direct labor, and factory overhead.

If a company uses average costing instead of FIFO they will still get the same unit costs.

Conversion costs are usually incurred evenly throughout a process.

If Department K had 2,000 units, 45% completed, in process at the beginning of the period, 12,000 units were completed during the period, and 1,200 units were 40% completed at the end of the period, what was the number of equivalent units of production for the period if the first-in, first-out method is used to cost inventories?

Department G had 3,600 units, 25% completed at the beginning of the period, 15,000 units were completed during the period, 3,000 units were one-fifth completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period: Work in process, beginning of period $40,000 Costs added during period: Direct materials (10,400 at $8) 83,200 Direct labor 63,000 Factory overhead 25,000 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the total cost of the units "started and completed" during the period (round unit cost calculations to four decimal places)?

If a business had a capacity of $8,000,000 of sales, actual sales of $5,000,000, break-even sales of $3,500,000, fixed costs of $1,400,000, and variable costs of 60% of sales, what is the margin of safety expressed as a percentage of sales?

Which of the following statements is true regarding fixed and variable costs? Variable costing is useful to managers for all but the following: reporting to the public in certified financial statements

Carter Co. sells two products, Arks and Bins. Last year Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Arks $120 $80 $40 Bins 80 60 20 What was Carter Co.'s weighted average unit contribution margin?

The reliability of cost-volume-profit analysis does NOT depend on the assumption that costs can be accurately divided into fixed and variable components.

If the volume of sales is $7,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 45.8%.

As production increases, what should happen to the fixed costs per unit?

For purposes of analysis, mixed costs can generally be separated into their variable and fixed components.

The Rocky Company reports the following data. Sales $700,000 Variable costs $300,000 Fixed costs $120,000 Rocky Company's operating leverage is:

Variable costs are costs that remain constant on a per-unit basis as the level of activity changes.

A mixed cost has characteristics of both a variable and a fixed cost.

The Harold Corporation just started business in January of 2010. They had no beginning inventories. During 2010 they manufactured 12,000 units of product, and sold 10,000 units. The selling price of each unit was $20. Variable manufacturing costs were $4 per unit, and variable selling and administrative costs were $2 per unit. Fixed manufacturing costs were $24,000 and fixed selling and administrative costs were $6,000. What would be the Harold Corporations Net income for 2010 using direct costing?

Assume that Corn Co. sold 8,000 units of Product A and 2,000 units of Product B during the past year. The unit contribution margins for Products A and B are $30 and $60 respectively. Corn has fixed costs of $378,000. The break-even point in units is:

Variable cost per unit = $5.00 Average Fixed Cost per unit = $7.00 Units sold and produced in July 25,000 What is total estimate cost for August if 30,000 units are projected to be produced and sold?

If sales are $525,000, variable costs are 56% of sales, and operating income is $50,000, what is the contribution margin ratio?

Which of the following describes the behavior of the variable cost per unit?

Cost-volume-profit analysis cannot be used if which of the following occurs?

If a business had a margin of safety ratio of 20%, variable costs of 75% of sales, fixed costs of $240,000, a break-even point of $960,000, and operating income of $60,000 for the current year, what are the current year's sales?

Which of the following describes the behavior of the fixed cost per unit?

Zeke Company sells 25,000 units at $21 per unit. Variable costs are $10 per unit, and fixed costs are $75,000. The contribution margin ratio and the unit contribution margin are:

If fixed costs are $450,000 and the unit contribution margin is $50, the sales necessary to earn an operating income of $50,000 are 10,000 units.

The contribution margin ratio is the same as the profit-volume ratio.

Zipee Inc.'s unit selling price is $90, the unit variable costs are $40.50, fixed costs are $170,000, and current sales are 12,000 units. How much will operating income change if sales increase by 5,000 units?

Selling price = $80 per unit Variable cost = $30 per unit Units = 20,000 Fixed costs = $240,000 This company is considering a 20% drop in selling price that they believe will raise units sold by 20%. All other costs stay the same. How much will income go up or down if they make this change?

Assume that Corn Co. sold 8,000 units of Product A and 2,000 units of Product B during the past year. The unit contribution margins for Products A and B are $30 and $60 respectively. Corn has fixed costs of $378,000. The break-even point in units is:

The adoption of variable costing for managerial decision making is based on the premise that fixed factory overhead costs are related to productive capacity of the manufacturing plant and are normally not affected by the number of units produced.

Given the following cost data, what type of cost is shown? Total Cost # of units $500 1 $1,000 2 $1,500 3 $2,000 4

If fixed costs are $650,000 and the unit contribution margin is $30, the sales necessary to earn an operating income of $30,000 are 14,000 units.

Forde Co. has an operating leverage of 4. Sales are expected to increase by 8% next year. Operating income is:

Variable costing is useful to managers for all but the following:

In cost-volume-profit analysis, all costs are classified into the following two categories:

If variable costs per unit increased because of an increase in hourly wage rates, the break-even point would:

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the profit-volume chart.

Break-even analysis is one type of cost-volume-profit analysis.

Calzone Co. has budgeted salary increases to factory supervisors totaling 10%. If selling prices and all other cost relationships are held constant, next year's break-even point will:

If fixed costs are $490,000, the unit selling price is $35, and the unit variable costs are $20, what is the break-even sales (units) if fixed costs are reduced by $40,000?

A mixed cost has characteristics of both a variable and a fixed cost.