FUNDAMENTALS OF COST ACCT.(LL) >CUSTOM<
5th Edition
ISBN: 9781259912733
Author: LANEN
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 8, Problem 25E
Equivalent Units and Cost of Production
By mistake, the production supervisor transposed the digits on the production report and reported a higher percentage of completion for each inventory component. Assume that there was no beginning inventory.
Required
What is the effect of this error on the following?
- a. The computation of total equivalent units.
- b. The computation of costs per equivalent unit.
- c. Costs assigned to cost of goods transferred out for the period.
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What effect would an underestimated degree of completion of ending inventory have on a.) production cost per unit, b.) equivalent units, and c.) costs transferred out
d. What was the cost of products completed during Febuary?
e. What was the balance of the Work-in-Process Inventory account at the end of Fabuary?
f. What was the operating profit for Febuary? Any over- or underapplied overhead is written off to Cost of Goods Sold?
Please provide an explanation it would be of great help with my learning. Thank you <3
1.
I. The EUP will be the same under FIFO method and weighted average methos if there is no beginning work in process inventory.Il. In process costing the cost per unit in a department is found by spreading the period's production costs over the production activity.a. Both statements are false.b. Only statement I is true.c. Only statement Il is true.d. Both statements are true
2.
I. Under the weighted average method, the equivalent units used to compute the unit costs of ending inventories relate only to work done during the current period.Il. Discrete production losses are assumed to occur uniformly throughout the process.
a. Both statements are true.b. Only statement Il is truec. Both statements are false.d. Only statement I is true.
Chapter 8 Solutions
FUNDAMENTALS OF COST ACCT.(LL) >CUSTOM<
Ch. 8 - What are the characteristics of industries most...Ch. 8 - A manufacturing company has records of its...Ch. 8 - If costs increase from one period to another, will...Ch. 8 - What are the five steps to follow when computing...Ch. 8 - What is the distinction between equivalent units...Ch. 8 - Which method, weighted-average or FIFO, better...Ch. 8 - It has been said that a prior departments costs...Ch. 8 - The more important individual unit costs are for...Ch. 8 - Assume that the number of units transferred out of...Ch. 8 - The management of a liquid cleaning product...
Ch. 8 - We have discussed two methods for process costing,...Ch. 8 - A friend owns and operates a consulting firm that...Ch. 8 - The controller of a local firm that uses a...Ch. 8 - Throughout the chapter, we treated conversion...Ch. 8 - Consider a manufacturing firm with multiple...Ch. 8 - Prob. 16CADQCh. 8 - Would process costing work well for a service...Ch. 8 - Compute Equivalent Units: Weighted-Average Method...Ch. 8 - Compute Equivalent Units: FIFO Method Refer to the...Ch. 8 - Compute Equivalent Units: Weighted-Average Method...Ch. 8 - Compute Equivalent Units: FIFO Method Refer to the...Ch. 8 - Compute Equivalent Units Magic Company adds...Ch. 8 - Equivalent Units: Weighted-Average Process Costing...Ch. 8 - Compute Equivalent Units: Ethical Issues Aaron...Ch. 8 - Equivalent Units and Cost of Production By...Ch. 8 - Compute Costs per Equivalent Unit:...Ch. 8 - Prob. 27ECh. 8 - Compute Equivalent Units: FIFO Method Materials...Ch. 8 - Compute Equivalent Units and Cost per Equivalent...Ch. 8 - Cost Per Equivalent Unit: Weighted-Average Method...Ch. 8 - Compute Costs per Equivalent Unit:...Ch. 8 - Prob. 32ECh. 8 - Compute Costs per Equivalent Unit: FIFO Method...Ch. 8 - Prob. 34ECh. 8 - Compute Costs per Equivalent Unit:...Ch. 8 - Assign Costs to Goods Transferred Out and Ending...Ch. 8 - Prob. 37ECh. 8 - Assign Costs to Goods Transferred Out and Ending...Ch. 8 - Prepare a Production Cost Report: FIFO Method...Ch. 8 - Prepare a Production Cost Report: Weighted-Average...Ch. 8 - Prepare a Production Cost Report: Weighted-Average...Ch. 8 - Prepare a Production Cost Report: FIFO Method...Ch. 8 - Cost of Production: Weighted-Average and FIFO...Ch. 8 - Operation Costing: Ethical Issues Brokia...Ch. 8 - Prob. 45ECh. 8 - Prob. 46PCh. 8 - Prob. 47PCh. 8 - Prob. 48PCh. 8 - Prob. 49PCh. 8 - Prob. 50PCh. 8 - Prob. 51PCh. 8 - Prepare a Production Cost Report and Show Cost...Ch. 8 - Prob. 53PCh. 8 - Prob. 54PCh. 8 - Prepare a Production Cost Report: Weighted-Average...Ch. 8 - Prob. 56PCh. 8 - Prob. 57PCh. 8 - Prob. 58PCh. 8 - Prob. 59PCh. 8 - Process Costing and Ethics: Increasing Production...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The FIFO method of process costing intermingles current costs of production with costs of beginning inventory in computing the cost per equivalent unit. True Falsearrow_forwardThe FIFO method provides a major advantage over the weighted-average method in that: a. the calculation of equivalent units is less complex under the FIFO method. b. the FIFO method treats units in the beginning inventory as if they were started and completed during the current period. c. the FIFO method provides measurements of work done during the current period. d. the weighted-average method ignores units in the beginning and ending work in process inventories.arrow_forwardTrue or False 1. The weighted average method includes the work in process beginning inventory cost in computing the unit cost 2. The weighted average method assumed that units in work in process beginning inventory are the first units to be transferred 3. The FIFO method assumed that units in work in process beginning inventory are the first units to be transferred.arrow_forward
- In the immediate write-off approach, under-applied overhead is regarded as: a. an increase in current income b. an increase in the cost of inventory c. a decrease in cost of goods sold d. an increase in cost of goods soldarrow_forwardThe first step in determining the cost per EUP per cost component under the weighted average method is to * a. add the beginning Work in Process Inventory cost to the current period's production cost.b. divide the current period's production cost by the equivalent units.c. subtract the beginning Work in Process Inventory cost from the current period's production cost.d. divide the current period's production cost into the EUP.arrow_forwardThe weighted-average method of process costing: a. can be used under any cost flow assumption. b. does not require the use of predetermined overhead rates. c. keeps costs in the beginning inventory separate from current period costs. d. does not consider the degree of completion of units in the beginning work in process inventory when computing equivalent units of production.arrow_forward
- Which of the following is not relevant is not relevant in determining weighted average unit cost in process costing? a. Equivalent unit of production in beginning inventory. b. Equivalent unit of production in ending inventory. c. Cost of beginning inventory. d. Units completed.arrow_forwardI.-When assigning costs to partially completed units in the ending work in process inventory, it is not necessary to consider the percentage completion of the units under the weighted-average method. II.-The cost per equivalent unit for conversion costs will always be the same under both the FIFO and the weighted-average methods if there is no ending work in process inventory A. Only statement I is true B. Both statements are false C. Both statements are true D. Only statement II is truearrow_forwardThe First- In- First- Out method, which is mainly utilized to assign the average cost of production to a given product, is most commonly employed when inventory items are so intertwined that it becomes difficult to assign a specific cost to an individual unit. Select one: O True O Falsearrow_forward
- the ---- account is credited to adjust for underallowcated overhead costs. A. sales revenue B. Finished goods inventory C. manufacturing overhead D.cost of goods soldarrow_forwardCost accounting systems used by manufacturing companies are based on the: A. LIFO inventory system. B. Perpetual inventory system. C. Finished goods inventories. D. Weighted average inventories. E. Periodic inventory system. Reset Selectionarrow_forwarda. Based on the data in Exercise 20-11 (attached), determine the following:1. Cost of beginning work in process inventory completed this period2. Cost of units transferred to finished goods during the period3. Cost of ending work in process inventory4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest centb. Did the production costs change from the preceding period? Explain.c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?arrow_forward
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