irect material irect labor
Q: Explain unit product cost under variable costing.
A: Variable Costing: “Variable costing is a method that allocates only variable manufacturing costs to…
Q: a. what is the amount of prime costs? b. what is the amount of conversion costs?
A: Prime cost is the total direct cost incurred to manufacture a product or render a service typically…
Q: Define the following terms: joint products, joint costs, and split-off point.
A: Joint Products: When two are more products are produced in a process using the same basic raw…
Q: Explain in simple terms the notion of equivalent units of production (EUP). Why is it necessary to…
A: Process costing: It is a type of costing method, where the direct costs are accumulated and indirect…
Q: Explain why standard costing is more suitable for controlling the cost of unit-level activities
A: Standard costing is a cost accounting method in which predetermined levels of sales, production,…
Q: 1. What is the unit product cost under absorpotion costing? 2. What is the unit product cost…
A:
Q: Show income comparison's of absorption and variable costing?
A: Absorption costing method can be defined as the all the costs that is associated with the production…
Q: Consumption ratios are useful in determining: A. the existence of product-line diversity. B.…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: Identify the flow of cost in manufacturing firm step by step and how it is related to prime costand…
A: Costs Cost is the amount expended on any particular product or amount related to a specific product.…
Q: . Assume that the company uses absorption costing:
A: In Absorption Costing along with variable costs we also consder fixed costs as cost…
Q: Define prime cost and conversion. Why can't prime cost prime cost be added to conversion cost to get…
A: Classification of costs is important to arrive at per head cost. It helps the management to take…
Q: Why aren’t common costs allocated to segments under the contribution approach?
A: Segment margin is a useful measure to assess the performance of an operating unit. A common fixed…
Q: Volume-based cost systems tend to:
A: Meaning of Volume Based Cost System Volume based costing is also known as traditional costing. It is…
Q: Define the following concepts: a) Absorption costing- b) Cost behavour-
A: Costing - Absorption costing is the costing also known as Full Costing. Cost Behavior - Cost…
Q: Which of the following is an advantage of using cost-based transfer prices? Multiple Choice Such…
A: Cost based transfer pricing is a costing method where the selling cost of the product is based on…
Q: Why cant prime cost be added to conversion cost to get total product cost?
A: Product Costs: Product costs are the costs that are incurred to produce a product or providing a…
Q: What is the difference between prime costs and conversion costs?
A: Prime cost includes direct expenses related to Manufacturing of a goods. Major component of Prime…
Q: How are joint costs allocated? Explain and analyze using numerical example.
A: Joint Costs In business different costs are incurred in the production process, but in certain…
Q: Explain how fixed manufacturing overhead costs are shifted from one period to another under…
A: Absorption Costing: It is a type of costing where all the manufacturing costs are absorbed by the…
Q: Define the following terms: joint production process, joint costs, joint products, split-off point,…
A: Joint production process: A joint production process results in two or more products, called as…
Q: Define absorption costing.
A: Absorption costing refers to managerial accounting cost method for expending each costs associated…
Q: how to solve plantwide overhead rate versus departmental rates, effects on pricing decisions?
A: Since there are multiple sub parts in the question, calculation will be given for first three sub…
Q: Briefly explain how to use the physical-units method of joint cost allocation.
A: Cost: It is the economic value of resources incurred by a firm to manufacture a product or render…
Q: Define Joint costs?
A: Joint Products: When two are more products are produced in a process using the same basic raw…
Q: “Under the general guideline for transfer pricing, the minimum transfer price will vary depending on…
A: Transfer Pricing: This refers to a process of pricing in which one sub-unit of an organization…
Q: A transfer of a particular cost from one cost to another
A: Yes, We can transfer of a particular cost from one cost to another.
Q: Define the terms sunk cost and differential cost.
A: Differential cost: Differential cost is the change in total cost due to increase or decrease in…
Q: Explain unit product cost under absorption costing.
A: Absorption costing (also known as the “Cost-Plus” approach), is a method that is centered upon the…
Q: What is meant by the term cost driver? What is a volume-based cost driver?
A: Activity-based costing: It is a method that helps in finding the activities performed by a company…
Q: How is conversion costs per equivalent unit calculated?
A: The cost per unit is calculated as total cost divided by number of units.
Q: . What was Product Z’s unit cost under absorption costing? 2. What was Product Z’s unit cost under…
A: Total variable manufacturing cost = Direct material + direct labor + variable manufacturing overhead…
Q: The minimum transfer price for a selling division with excess capacity to accommodate the transfer…
A: The lower limit is the lowest price that the buyer can negotiate. The transfer price…
Q: How would merging of two systems affect the costing of the new system including the impact on…
A: The act of distinguishing, investigating, , measuring, interpreting, and conveying the monetary data…
Q: What is the Total joint costs?
A: Formula: Total sales values at split off = Product Y Sales value + Product Z sales value.
Q: One element of the general transfer-pricing rule is opportunity cost. Briefly define the term…
A: Opportunity cost is the benefit foregone from choosing the next best alternative in a decision…
Q: Identify the relative advantages and disadvantages of basing transfer prices on total costs,…
A: Please find the answers to the above questions below:
Q: What is a potential disadvantage of the reciprocal method? a. It is the most complex method of cost…
A: Reciprocal method: It is the method in which the allocation of costs spent on other departments by…
Q: Using the following data, what would the transfer price per unit if Division A purchased Component X…
A: As per market based tranfer pricing, purchasing division will pay the market price at which it can…
Q: Describe allocation of joint costs across products.
A: Joint costs: It refers to direct labor, direct material and overhead costs incurred during the joint…
Q: Explain why using cost as a transfer price is inappropri-ate when the center producing the product…
A: Profit Center: A profit center may be a part of a business that is expected to form an identifiable…
What would be the transfer price if Division X uses full absorption cost plus markup?
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- Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual variable unit cost is as follows: Fixed overhead was 320,000. Fixed selling expenses consisted of advertising copayments totaling 110,000. Fixed administrative expenses were 236,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was 148,000 for 4,000 juicers. The value of ending inventory reported on the financial statements was Refer to the information in 2.24. The gross margin percentage for last year was a. 12.57% b. 55.67% c. 28.95% d. 38.33%The following information pertains to Vladamir, Inc., for last year: There are no work-in-process inventories. Normal activity is 100,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next. Required: 1. How many units are in ending inventory? 2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income. 3. Assume the selling price per unit is 29. Prepare an income statement using (a) variable costing and (b) absorption costing.
- Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: Assume that 8,500 million of cost of goods sold and 4,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. b. Explain the difference between the amount of operating income reported under the absorption costing and variable costing concepts. Round numbers to nearest million.Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual variable unit cost is as follows: Fixed overhead was 320,000. Fixed selling expenses consisted of advertising copayments totaling 110,000. Fixed administrative expenses were 236,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was 148,000 for 4,000 juicers. The value of ending inventory reported on the financial statements was a. 55,500 b. 92,500 c. 66,500 d. 39,900
- Orinder Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 275,800, direct labor cost was 153,000, and overhead cost was 267,300. There were 25,000 units produced. Unit manufacturing cost (rounded to the nearest cent) is a. 28.40 b. 27.98 c. 34.95 d. 27.55At the end of the first year of operations, 21,500 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows: Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept.The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?
- The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?Wyandotte Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 256,900, direct labor cost was 176,000, and overhead cost was 308,400. There were 40,000 units produced. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 6.62 is direct materials and 7.71 is overhead. What is the prime cost per unit? Conversion cost per unit?Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 70,000. b. Requisitioned raw materials to production, 70,000. c. Distributed direct labor costs, 15,000. d. Factory overhead costs incurred, 45,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 195,000, on account. (Hint: Use a single account for raw materials and work in process.)