Required information Problem 20-7AA (Algo) FIFO: Cost per equivalent unit; costs assigned to products LO C2 [The following information applies to the questions displayed below.] Dengo Company makes a trail mix in two departments: Roasting and Blending. Direct materials are added at the beginning of each process, and conversion costs are added evenly throughout each process. The company uses the FIFO method of process costing. October data for the Roasting department follow. Beginning work in process inventory Units started and completed Units completed and transferred out. Ending work in process inventory Beginning work in process inventory Costs added this period Direct materials Conversion Total costs to account for Units 3,100 19,300 22,400 2,500 $ 252,880 1,107,594 Direct Materials Conversion Percent Percent Complete 100% Complete 30% 100% $ 121,150 1,360,474 $ 1,481,624 70% Problem 20-7AA (Algo) Part 3 Assign costs to the department's output-specifically, to the units transferred out and to the units that remain in work in process

Required information Problem 20-7AA (Algo) FIFO: Cost per equivalent unit; costs assigned to products LO C2 [The following information applies to the questions displayed below.] Dengo Company makes a trail mix in two departments: Roasting and Blending. Direct materials are added at the beginning of each process, and conversion costs are added evenly throughout each process. The company uses the FIFO method of process costing. October data for the Roasting department follow. Beginning work in process inventory Units started and completed Units completed and transferred out. Ending work in process inventory Beginning work in process inventory Costs added this period Direct materials Conversion Total costs to account for Units 3,100 19,300 22,400 2,500 $ 252,880 1,107,594 Direct Materials Conversion Percent Percent Complete 100% Complete 30% 100% $ 121,150 1,360,474 $ 1,481,624 70% Problem 20-7AA (Algo) Part 3 Assign costs to the department's output-specifically, to the units transferred out and to the units that remain in work in process

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 3ADM: Production run size and activity improvement Littlejohn, Inc. manufactures machined parts for the...

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Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units of Simple and 146,100 of Removable, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: Â How much is the overhead allocated to each unit of Simple and Removable?
(Appendix 3A) Separating Fixed and Variable Costs, Service Setting Louise McDermott, controller for the Galvin plant of Veromar Inc., wanted to determine the cost behavior of moving materials throughout the plant. She accumulated the following data on the number of moves (from 100 to 800 in increments of 100) and the total cost of moving materials at those levels of moves: Required: 1. Prepare a scattergraph based on these data. Use cost for the vertical axis and number of moves for the horizontal axis. Based on an examination of the scattergraph, does there appear to be a linear relationship between the total cost of moving materials and the number of moves? 2. Compute the cost formula for moving materials by using the high-low method. Calculate the predicted cost for a month with 550 moves by using the high-low formula. (Note: Round the answer for the variable rate to three decimal places and the answer for total fixed cost and total cost to the nearest dollar.) 3. CONCEPTUAL CONNECTION Compute the cost formula for moving materials using the method of least squares. (Note: For the method of least squares, round the variable rate to two decimal places and total fixed cost and total cost to the nearest dollar.) Using the regression cost formula, what is the predicted cost for a month with 550 moves? What does the coefficient of determination tell you about the cost formula computed by regression? 4. CONCEPTUAL CONNECTION Evaluate the cost formula using the least squares coefficients. Could it be improved? Try dropping the third data point (300, 3,400), and rerun the regression.
Production run size and activity improvement Littlejohn, Inc. manufactures machined parts for the automotive industry. The activity cost associated with Part XX-10 is as follows: Activity Activity-Base Usage Activity Rate = Activity Cost Fabrication 250 dlh 80per dlh 20,000 Setup 10 setups 80 per setup 800 Production control 10 prod, runs 30 per prod, run 300 Moving 10 moves 25 per move 250 Total activity cost per unit 21,350 Estimated units of production 500 Activity cost per unit 42.70 Each unit requires 30 minutes of fabrication direct labor. Moreover, part XX-10 is manufactured in production run sizes of 50 units. Each production run is set up, scheduled (production control), and moved as a batch of 50 units. Management is considering improvements in the setup, production control, and moving activities in order to cut the production run sizes by half. As a result, the number of setups, production runs, and mows will double from 10 to 20. Such improvements are expected to speed the companys ability to respond to customer orders. Setup is reengineered so that it takes 60% of the original cost per setup. Production control software will allow production control effort and cost per production run to decline by 60%. Moving distance was reduced by 40%, thus reducing the cost per mow by the same amount. A. Determine the revised activity cost per unit under the proposed changes. B. Did these improvements reduce the activity cost per unit? C. What cost per unit for setup would be required for the solution in (A) to equal the base solution?
Crafts 4 All has these costs associated with production of 12,000 units of accessory products: direct materials, $19; direct labor, $30; variable manufacturing overhead, $15; total fixed manufacturing overhead, $450,000. What is the cost per unit under both the variable and absorption methods?
Question 15 The assembly division of Quality Time Pieces, Inc. uses the FIFO method of process costing. Consider the following data for May 2020: Physical units Direct Materials Conversion Costs Beginning WIP 100 $459,888 $142,570 Started in May 2020 510 Completed during May 2020 450 Total costs added during May 2020 $3,237,000 $1,916,000 Degree of completion: Beginning WIP: direct materials 80%; conversion costs 35% Degree of completion: Ending WIP: direct materials 80%; conversion costs 40% What would be the cost of units completed and transferred out using FIFO method? Group of answer choices $4,065,000 $4,667,140 $1,088,000 $4,207,570
30. Process costing techniques should be used in assigning costs to products a. when production is customized to individual customer's requests b. if the products are manufactured on the basis of each order received. c. when production is only partially completed during the accounting period. d. if the products are composed of mass-produced, homogeneous units. 31. D Company uses the FIFO method of process costing. The beginning work-in-process inventory consisted of $6,400 of materials cost and $9,600 of conversion cost. Current month costs were $31,740 for materials and $51,100 for conversion. Equivalent Units have already been calculated for you under the FIFO method and were 69,000 equivalent units for materials and 70,000 equivalent units for conversion. Ending inventory of 5,000 units were 100% completed as to materials and 40% completed as to conversion. The cost assigned to ending work-in-process inventory would be _____. a. $3,760 b. $3,200 c. none of the other answers…
Weighted-average method, equivalent units.Consider the following data for the assembly division of Fenton Watches, Inc.:The assembly division uses the weighted-average method of process costing. Physical Units (Watches) Direct Materials Conversion CostsBeginning work inprocess (May 1) a 80 $493,360 $91,040Started in May 2012 500Completed duringMay 2012 460Ending work inprocess (May 31)b 120Total costs addedduring May 2012 $3,220,000 $1,392,000a Degree of completion: direct materials, 90%; conversion costs, 40%.b Degree of completion: direct materials, 60%; conversion costs, 30%.Required:1. Compute equivalent units for direct materials and conversion costs. Show physicalunits in the first column of your schedule.2. Summarize total costs to account for, calculate cost per equivalent unit for directmaterials…
Deuter Int’l Business manufactures two products, Product L11 and Product L12. The company is considering adopting an activity-based costing system with the following activity pools, activity measures, and expected activity: Expected Activity Activity Cost Pools Estimated Overhead Cost Product L11 Product 12 Total Machine setups required $200,000 600 1,400 2,000 Purchase orders issued 38,382 500 100 600 Machine-hours required 92,650 6,800 10,200 17,000 $331,032 The amount overhead costs assigned to Product L11 would be closest to: Question 15 options: 1) $331,032 2) $129,045 3) $165,516 4) $130,758
13. Monson Company has two products: G and P. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools: Activity Expected Activity Cost Pool Estimated Ovhd. Cost Product G Product P Total Activity 1 $30,000 200 400 600 Activity 2 $24,000 600 900 1,500 Activity 3 $80,000 400 3,600 4,000 The annual production and sales of Product G is 10,640 units. The annual production and sales of Product P is 26,600.The activity rate under the activity-based costing system for Activity 2 is closest to: $21.97. $89.33. $16.00. $26.67.
Questions 14 – 17 are based on the following Chen Company produces a product in a two-department process, Assembly and Finishing. The following information is available on their first department, Assembly: Beginning Work-in-process Units started Units completed and transferred to Finishing Ending Work-in-process Direct Material Added Direct Labour Factory Overhead Total cost to account for The units still in process are 100% complete with respect to direct materials and 75% complete with respect to conversion costs. -0- 200,000 168,000 32,000 $700,000 960,000 480,000 2,140,000 14. The unit cost of direct materials is: (A) $3.50 (C) $3.65 (B) $4.17 (D) $0.29 15. The unit cost for conversion costs is: (A) $5.00 (B) $2.50 (C) $7.20 (D) $7.50 16. The total cost of units completed and transferred to finished goods is: (A) $2,112,000 (B) $2,140,000 (C) $1,848,000 (D) $352,000 17. The total cost of ending work-in-process is: (A) $352,000 (B) $292,000 (C)…
The Trece Co. manufactures joint products X and Y as well as by-product Z. Cumulative costs data for the period show P204,000 representing 20,000 units completed processed through the Refining Department at an average cost of P10.20. Costs are assigned to X and Y by the market value method which considers further processing costs in subsequent operations.Additional data: Z X YQuantity processed 2,000 units 8,000 units 10,000 unitsSales price per unit P5 P20 P25Further processing cost per unit 1 5 7Marketing and administrativeexpense per unit 1Operating profit per unit 1 Required:a. Assuming by-product value is material determine the joint cost allocated to Z using Net realizable value method and joint cost to X and Y.b. Assuming by-product value is immaterial and insignificant,…
A Chemical Company manufactures joint products Pep and Vim, and a by product Zest. Costs are assigned to the joint products by the market value method, which considers further processing costs in subsequent operations. For allocating cost to the by-product, the market value or reversal cost method is used. Total manufacturing costs for 10,000 units were P172,000 during the quarter. Production and cost data follow: Pep Vim Zest Unit Produced 5000 4000 1000 Sales price per unit 50 40 5 Further processing cost per unit 10 5 0 Selling and adm. Expense per unit 0 0 2 operating profit per unit 0 0 1 Required: The gross profit for pep is The value of Zest to deducted from the joint cost is