ACCT 241 Week 4 Assignment Help 2

ACCT 241 Week 4 Assignment Help | American University 

1.

Required information

We describe the flow of costs in a process costing system and prepare appropriate journal entries to record costs. A process costing system accumulates costs by department and assigns these costs uniformly to all units that pass through the department during a period. We also introduce the concept of equivalent units of production. Equivalent units is computed as the product of the number of partially completed units and the percentage completion of those units with respect to the processing in the department. We also learn about operation costing, a hybrid system, and understand how it differs from both job-order and process costing.

Knowledge Check

Which of the following statements about processing costing is false?

·         Process costing accumulates costs by department.

·         Process costing assigns departmental costs uniformly to all identical units that pass through the department during a period.

·         Process costing systems compute unit costs by department.

·         Process costing is used when a company produces a continuous flow of units that are distinguishable from one another.

2.

Required information

We describe the flow of costs in a process costing system and prepare appropriate journal entries to record costs. A process costing system accumulates costs by department and assigns these costs uniformly to all units that pass through the department during a period. We also introduce the concept of equivalent units of production. Equivalent units is computed as the product of the number of partially completed units and the percentage completion of those units with respect to the processing in the department. We also learn about operation costing, a hybrid system, and understand how it differs from both job-order and process costing.

Knowledge Check

Sneaker Styles Company manufactures a wide variety of sneakers. Which of the following systems is most suitable for Sneaker Styles?

·         Job-Order Costing

·         Process Costing

·         Operation Costing

·         Variable Costing

3.

Required information

We describe the flow of costs in a process costing system and prepare appropriate journal entries to record costs. A process costing system accumulates costs by department and assigns these costs uniformly to all units that pass through the department during a period. We also introduce the concept of equivalent units of production. Equivalent units is computed as the product of the number of partially completed units and the percentage completion of those units with respect to the processing in the department. We also learn about operation costing, a hybrid system, and understand how it differs from both job-order and process costing.

Knowledge Check

Which of the following statements about companies that use processing costing is false?

·         A processing department is an organizational unit where work is performed on a product and where materials, labor, or overhead costs are added to the product.

·         Costs are accumulated by department.

·         Raw material costs are added only to the first processing department.

·         A separate Work in Process account is maintained for each processing department.

4.

Required information

We describe the flow of costs in a process costing system and prepare appropriate journal entries to record costs. A process costing system accumulates costs by department and assigns these costs uniformly to all units that pass through the department during a period. We also introduce the concept of equivalent units of production. Equivalent units is computed as the product of the number of partially completed units and the percentage completion of those units with respect to the processing in the department. We also learn about operation costing, a hybrid system, and understand how it differs from both job-order and process costing.

Knowledge Check

(For each of the five transactions described below, use the dropdown boxes to indicate which account should be debited and which account should be credited.)

5.

Required information

We describe the flow of costs in a process costing system and prepare appropriate journal entries to record costs. A process costing system accumulates costs by department and assigns these costs uniformly to all units that pass through the department during a period. We also introduce the concept of equivalent units of production. Equivalent units is computed as the product of the number of partially completed units and the percentage completion of those units with respect to the processing in the department. We also learn about operation costing, a hybrid system, and understand how it differs from both job-order and process costing.

Knowledge Check Question 01:

Conversion cost is composed of _______.

•                     direct labor and manufacturing overhead

•                     direct material and manufacturing overhead

•                     equivalent units in ending inventory

•                     manufacturing overhead

Knowledge Check Question 02:

Equivalent units is computed using which of the following formulas?

·         Equivalent units = Number of completed units x Percentage completion

·         Equivalent units = Number of partially completed units x Percentage completion

·         Equivalent units = Number of completed units x (100% - Percentage completion)

·         Equivalent units = Number of partially completed units x (100% ÷ Percentage completion)

6.

Required information

We learn how to compute the equivalent units of production using the weighted-average method. We determine that equivalent units computed using the weighted-average method uses all work done on the units, even if it was done in a prior period.

Knowledge Check

Daffy Taffy uses the weighted-average method in its process costing system. The company provided the following information:

What is the number of equivalent units of production with respect to materials during the period?

·         2,750

·         2,860

·         3,150

·         3,200  

7.

Required information

We learn that both the cost of beginning work in process inventory and the costs added during the period are considered for computing cost per equivalent unit. Also, we learn how to separately compute cost per equivalent unit for materials and for conversion.

Consider the following information from the records of Bennington Corporation. The company uses the weighted-average method.

Knowledge Check 01

When computing the cost per equivalent unit for conversion, what is the total cost that will be included in the numerator of that calculation?

·         $3,735

·         $2,255

·         $5,640

·         $6,240

Knowledge Check 02

What is the cost per equivalent unit for conversion?

•                     $1.50

•                     $1.67

•                     $2.20

•                     $2.25

8.

Required information

We learn how costs per equivalent unit are used to value units in ending work in process inventory and units that are transferred to the next department.

Consider the following information from the records of Willette Corporation. The company uses the weighted-average method.

Knowledge Check 01

What is the Bottling Department’s cost of ending work in process inventory?

·         $9,100

·         $9,500

·         $9,900

·         $10,500

Knowledge Check 02

What is the cost of the units transferred out of the Bottling Department during May?

o   $34,000

o   $59,500

o   $60,800

o   $61,000

9.

Required information

We learn why and how a cost reconciliation report is prepared.

Knowledge Check 01

The cost of beginning work in process inventory plus the costs added to production during the period equals the _______.

·         cost of ending work in process inventory

·         cost of units transferred out

·         total cost to be accounted for

·         cost of units started during the period

Knowledge Check 02

A company has three processing departments: Mixing, Baking, and Packaging. The Baking Department transfers 500 units to the Packaging Department. How will the Packaging Department account for the costs of those 500 units?

•                     Finished goods

•                     Cost of input materials

•                     Costs transferred in

•                     Costs transferred out

10.

Required information

We learn to compute equivalent units of production using the FIFO method. We also explain the differences between the FIFO method and the weighted-average method. The FIFO method calculates units costs using only the costs and outputs from the current period, whereas the weighted-average method calculates unit costs using costs and outputs from the current and prior periods.

Knowledge Check 01

When using the FIFO method to compute the equivalent units of production, how do you calculate the number of equivalent units that are needed to complete the beginning work in process inventory?

·         Units in beginning work in process inventory × Percentage completion of beginning work in process inventory

·         Units in beginning work in process inventory × (100% – Percentage completion of beginning work in process inventory)

·         Units in beginning work in process inventory × (100% + Percentage completion of beginning work in process inventory)

·         Units started and completed × (100% - Percentage completion of beginning work in process inventory)

11.

Required information

We learn to compute equivalent units of production using the FIFO method. We also explain the differences between the FIFO method and the weighted-average method. The FIFO method calculates units costs using only the costs and outputs from the current period, whereas the weighted-average method calculates unit costs using costs and outputs from the current and prior periods.

Daffy Corporation has two processing departments—Mixing and Cooking. Daffy uses the FIFO method. The following information relates to the Mixing Department:

Knowledge Check 01

What is the number of equivalent units of production with respect to materials during the period?

·         2,640

·         2,720

·         2,750

·         2,840

12.

Required information

We learn to compute equivalent units of production using the FIFO method. We also explain the differences between the FIFO method and the weighted-average method. The FIFO method calculates units costs using only the costs and outputs from the current period, whereas the weighted-average method calculates unit costs using costs and outputs from the current and prior periods.

Knowledge Check 01

The FIFO method of process costing differs from the weighted-average method of process costing in that the FIFO method ________.

·         blends costs and outputs from the current period with costs and outputs from the prior period

·         separates the costs and outputs from the current period from the costs and outputs from the prior period

·         considers beginning work in process to be started and completed during the current period

·         does not take the beginning percentage of completion into account when calculating equivalent units

13.

Required information

We learn how to compute the cost per equivalent unit using the FIFO method. Under the FIFO method, cost per equivalent unit is based only on the costs incurred in the department in the current period and ignores the costs from the previous periods.

Waldo Company has two departments—Cutting and Shaping. Waldo uses the FIFO method. The following information relates to the Shaping Department:

Knowledge Check 01

What is the total cost to be considered for calculating the cost per equivalent unit for conversion?

·         $21,120

·         $24,290

·         $24,480

·         $29,370

14.

Required information

We learn how costs per equivalent unit are used to value units in ending work in process inventory and units that are transferred to the next department using the FIFO method. The cost of the units transferred out consists of three distinct components: the cost of beginning work in process inventory, the cost to complete the units in beginning work in process inventory, and the cost of units started and completed during the period. This is a major difference between the weighted-average and FIFO methods.

PepFizz Company is a manufacturer of carbonated beverages. The company uses the FIFO method. The following information pertains to the Bottling Department for the month of May.

Knowledge Check

What is the Bottling Department’s cost of ending work in process inventory?

·         $7,400

·         $9,700

·         $5,400

·         $12,900

15.

Required information

We learn how the costs to be accounted for are properly accounted for with the help of a cost reconciliation report.

Knowledge Check 01

Which of the following is included in the “costs to be accounted for” section of a cost reconciliation report when the FIFO method is used?

·         Cost of ending work in process inventory.

·         Costs added to production during the period.

·         Cost of units transferred out during the period.

·         Cost of units started and completed during the period.