Use the following information for questions 1--10. Top That manufactures baseball-style hats. Material is introduced at the beginning of the process in the Cutting Department. Conversion costs are incurred (and allocated) uniformly throughout the process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Data for the Cutting Department for the month of February 2005 follow: Work in process, January 31-- 50,000 units 100% complete for direct materials, 40% completed for conversion costs actual costs of direct materials, $70,500; actual costs of conversion, $34,050 Units started during February, 225,000 Units completed during February, 200,000 …show more content…
$1.52 $1.81
6. Assuming Top That uses the first-in, first-out (FIFO) method to account for inventories, the assignment of costs to units completed and transferred to the Sewing Department during February is a. $658,350. b. $636,450. c. $666,000. d. $652,000.
The following additional data apply to questions 7--9. Standard costs for the Cutting Department: Direct materials - $1.50 per unit;
After reading Chapter 6 of the textbook and the materials I found that I was struggling to understand the material more than usual. Before reading this chapter I had a slight idea of how much effort went into keeping track of the costs and inventory. The most that I knew was that you had to keep track of it, I didn’t know that there are different ways to keep track of those costs. After reading more into the different ways to keep track of inventory I found that the one that stuck out most to me and was the one that I spent the most time trying to understand was the LIFO (Last In First Out).
In the current situation, the order is set to every Monday which means a total number of 50 orders for the whole period, and the average Inventory calculated from the given data is 5 units. Therefore, total cost of the current situation calculation will be as follows:
The inventory method that assigns the most recent costs to cost of goods sold is
The modern scenario of the hat making industry has revolutionized the scene with a number of options in color, patterns and material. They blend the modern trends with the traditional camo cowboy hats, without losing its unique identity. Most of the companies also offer provisions for do-it yourself ideas. You can get the product customized according to your personal preferences.
The Last in first out (LIFO) liquidation Inventory valuation method was changed as Inventory level in1984, 1983 and 1984 was decreased by Harnischfeger. By adopting this process, inventory that was purchased at lower cost in previous years was sold at higher prices.
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The board of directors of the Cortez Beach Yacht Club (CBYC) is developing plans to acquire more equipment for lessons and rentals and to expand club facilities. The board plans to purchase about $50,000 of new equipment each year and wants to begin a fund to purchase a $600,000 piece of property for club expansion.
In response to Brittany Hill’s thread on Job & Process Costing Systems, I can easily say that she was very articulate in her passage. The thread is well detailed and presented in a manner that is not confusing to the reader. To begin with, it is important that she starts out by highlighting the differences between the two. For most people, costing systems can mean almost the same but as described by Cohen & Kaimenaki (2011), different situations will allow specific systems to be utilized. This is exactly what Hill has been able to communicate.
Midwest Office Products’ (MOP) current costing system, is not very accurate because it includes all expenses in each order, although that specific order may not utilize a certain activity that causes that expense. For instance, all orders include both desktop delivery expense and freight expense, when only one of those delivery methods are utilized. Through the ABC method you can see which delivery methods are more damaging to your bottom line, since ABC allows you to focus on the activities causing that cost. By
Flowserve measures the cost of inventory using the first-in, first-out method. This relates to how inventory is handled and represents that the oldest inventory ships to customers first. The “inventories are stated at the lower of cost or market” (Flowserve Corporation, 2017). This ensures that the inventory balances as reported on the financial statements are not overstated. Inventory is stated at cost when appropriate and stated at market value when the cost of the inventory was higher than the current market value. In no circumstances are inventories listed at higher than cost value in keeping with the historical cost principal. Flowserve had an inventory turnover of approximately 2.88 for 2016 and days in inventory of approximately 121.57. The inventory ratios show that Flowserve is a very strong company and the inventories are well managed. Also, the inventory has a reasonable
(FIFO) policy, minimum stock reorder for each item and periodic stock evaluation. One of the
After winning a hat in a hockey skills competition, it became apparent by the envious, questioning looks from my peers that the style was quite popular. I attempted to find the hat online so my friends could have one too, but when I came up empty handed I asked the question, “Why not make my own?” While the idea seemed impossible at the time, I began to research. The realization that achieving this goal wasn't going to be as easy as it sounded struck me when I attempted to read endless pages of fine print and legal documents. After many hours of research, insightful meetings with business owners, and quite a few letters, I was ready to proceed with my
FIFO is the procedure of first inventory received would be the first inventory to be sold. FOFI would be the process of last inventory received would be sold first ,accounting
Nonvalue-added activities do not add value to the goods or services. 1–4. Differential costs are important for managerial decision making, but other cost data can provide management with additional important information. For example, inventory values and costs of goods sold are important for income tax and financial reporting purposes as well as for most bonus and cost-plus contracting purposes. Costs for performance evaluation are not necessarily differential costs. Companies try to recover all costs, hence some estimate of total costs is needed. (This could be an opportunity to discuss short-run and long-run costs with students, noting that in the long run, all costs must be covered.)
FIFO stands for first-in, first-out, meaning that the oldest inventory items are recorded as sold first but do not necessarily mean that the exact newest physical object has been tracked and sold; this is just an inventory technique.