Spartan Computer Systems, Inc., manufactures printers. Materials are added at the beginning of theproduction process. In April, Spartans started 14,500 printers. Of these, 12,350 were completed andtransferred to the next department, 1,480 were spoiled (as anticipated) and 670 were unexpectedly spoiled.Spoilage is not detected until the process is complete. There was no beginning or ending work in processinventory. Direct materials of $320,000 were used during the month.The Materials Rate per Equivalent is [Select]How much of the materials costs will be transferred to the next department? [Select]How much of the materials costs will be written off as "Loss from Abnormal Spoilage"?[Select]

Step 1: To Calculate the materials rate per equivalent, equivalent units of production is to be…

Answered: Spartan Computer Systems, Inc.,…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 6PA: Narwhal Swimwear has a beginning work in process inventory of 13,500 units and transferred in...

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AAA Appliances Inc. has two production departments. The nature of the process is such that no units remain in process in Finishing at the end of the period. At the beginning of the period, 10,000 units with a cost of 30,000 were transferred from Assembly to Finishing. Finishing incurred costs of 8,800 for materials, 7,200 for labor, and 8,800 for factory overhead, and finished 10,000 units during the month. Using the data in E5-9, prepare a statement of cost of goods manufactured for the month ended January 31, 2016, assuming that no further work was done in Assembly during January.
AAA Appliances Inc. has two production departments. The nature of the process is such that no units remain in process in Finishing at the end of the period. At the beginning of the period, 10,000 units with a cost of 30,000 were transferred from Assembly to Finishing. Finishing incurred costs of 8,800 for materials, 7,200 for labor, and 8,800 for factory overhead, and finished 10,000 units during the month. a. Determine the unit cost for the month in Finishing. b. Determine the unit cost of the products transferred to finished goods.
Lloyd Industries manufactures electrical equipment from specifications received from customers. Job X10 was for 1,000 motors to be used in a specially designed electrical complex. The followingcosts were determined for each motor: At final inspection, Lloyd discovered that 33 motors did not meet the exacting specifications established by the customer. Anexamination indicated that 18 motors were beyond repair andshould be sold as spoiled goods for 75 each. The remaining15 motors, though defective, could be reconditioned as first-qualityunits by the addition of 1,650 for materials, 1,500 for labor, and1,200 for factory overhead. Required: Prepare the journal entries to record the following: 1. The scrapping of the 18 motors, with the income from spoiledgoods treated as a reduction in the manufacturing cost of thespecific job. 2. The correction of the 15 defective motors, with the additionalcost charged to the specific job. 3. The additional cost of replacing the 18 spoiled motors with newmotors. 4. The sale of the spoiled motors for 75 each. 5. If the reconditioned motors sell for 400 each, is Lloyd betteroff reconditioning the defective motors or selling them as isfor 75 as spoiled goods?
One of the tennis rackets that Ace Sporting Goods manufactures is a titanium model (Slam) that sells for 149. The cost of each Slam consists of: Job 100 produced 100 Slams, of which six were spoiled and classified as seconds. Seconds are sold to discount stores for 50 each. Required: 1. Under the assumption that the loss from spoilage will be distributed to all jobs produced during the current period, use general journal entries to (a) record the costs of production, (b) put spoiled goods into inventory, and (c) record the cash sale of spoiled units. 2. Under the assumption that the loss due to spoilage will be charged to Job 100, use general journal entries to (a) record the costs of production, (b) put spoiled goods into inventory, and (c) record the cash sale of spoiled units.
Kraus Steel Company has two departments, Casting and Rolling. In the Rolling Department, ingots From the Casting Department are rolled into steel sheet. The Rolling Department received 4,000 tons from the Casting Department in October. During October, the Rolling Department completed 3,900 tons, including 200 tons of work in process on October 1. The ending work in process inventory on October 31 was 300 tons. How many tons were started and completed during October?
Shumaker Company manufactures a line of high-top basketball shoes. At the beginning of the year, the following plans for production and costs were revealed: During the year, a total of 50,000 units were produced and sold. The following actual costs were incurred: There were no beginning or ending inventories of raw materials. In producing the 50,000 units 63,000 hours were worked, 5% more hours than the standard allowed for the actual output. Overhead costs are applied to production using direct labor hours. Required: 1. Using a flexible budget, prepare a performance report comparing expected costs for the actual production with actual costs. 2. Determine the following: (a) Fixed overhead spending and volume variances and (b) Variable overhead spending and efficiency variances.
A machine shop manufactures a stainless steel part that is used in an assembled product. Materials charged to a particular jobamounted to 600. At the point of final inspection, it was discoveredthat the material used was inferior to the specifications required bythe engineering department; therefore, all units had to be scrapped. Record the entries required for scrap under each of the following conditions: a. The revenue received for scrap is to be treated as a reductionin manufacturing cost but cannot be identified with a specificjob. The value of stainless steel scrap is stable and estimatedto be 125 for this job. The scrap is sold two months later forcash at the estimated value of 125. b. Revenue received for scrap is to be treated as a reduction inmanufacturing cost but cannot be identified with a specificjob. A firm price is not determinable for the scrap until it issold. It is sold eventually for 75 cash. c. The production job is a special job, and the 85 received onaccount for the scrap is to be treated as a reduction inmanufacturing cost. (A firm price is not determinable for thescrap until it is sold.) d. Only 40 cash was received for the scrap when it was sold inthe following fiscal period. (A firm price is not determinablefor the scrap until it is sold, and the amount to be received forthe scrap is to be treated as other income.)
Larkin Company produces leather strips for western belts using three processes: cutting, design and coloring, and punching. The weighted average method is used for all three departments. The following information pertains to the Design and Coloring Department for the month of June: a. There was no beginning work in process. b. There were 400,000 units transferred in from the Cutting Department. c. Ending work in process, June 30: 50,000 strips, 80 percent complete with respect to conversion costs. d. Units completed and transferred out: 330,000 strips. The following costs were added during the month: a. Direct materials are added at the beginning of the process. b. Inspection takes place at the end of the process. All spoilage is considered normal. Required: 1. Calculate equivalent units of production for transferred-in materials, direct materials added, and conversion costs. 2. Calculate unit costs for the three categories of Requirement 1. 3. What is the total cost of units transferred out? What is the cost of ending work-in-process inventory? How is the cost of spoilage treated? 4. Assume that all spoilage is considered abnormal. Now, how is spoilage treated? Give the journal entry to account for the cost of the spoiled units. Some companies view all spoilage as abnormal. Explain why. 5. Assume that 80 percent of the units spoiled are abnormal and 20 percent are normal spoilage. Show the spoilage treatment for this scenario.
Chavez Concrete Inc. has two production departments. Blending had 1,000 units in process at the beginning of the period, two-fifths complete. During the period 7,800 units were received from Mixing, 8,200 units were transferred to the finished goods storeroom, and 600 units were in process at the end of the period, 1/3 complete. The cost of the beginning work in process was: The costs during the month were: 1. Using the data in E5-15, prepare a cost of production summary for the month ended January 31, 2016. 2. Prepare a journal entry to transfer the cost of the completed units from Blending to the finished goods storeroom.
Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?
Narwhal Swimwear has a beginning work in process inventory of 13,500 units and transferred in 130,000 units before ending the month with 14,000 units that were 100% complete with regard to materials and 30% complete with regard to conversion costs. The cost per unit of material is $5.80 and the cost per unit for conversion is $8.20 per unit. Using the weighted-average method, what is the amount of material and conversion costs assigned to the department for the month?
Pinter Company had the following environmental activities and product information: 1. Environmental activity costs 2. Driver data 3. Other production data Required: 1. Calculate the activity rates that will be used to assign environmental costs to products. 2. Determine the unit environmental and unit costs of each product using ABC. 3. What if the design costs increased to 360,000 and the cost of toxic waste decreased to 750,000? Assume that Solvent Y uses 6,000 out of 12,000 design hours. Also assume that waste is cut by 50 percent and that Solvent Y is responsible for 14,250 of 15,000 pounds of toxic waste. What is the new environmental cost for Solvent Y?

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