Mannarelli Corporation uses the FIFO method in its processcosting system. Operating data for the Casting Department for themonth of September appear below:
Units PercentComplete
with Respect to
Conversion Beginning workin process inventory 19,000 25% Transferred infrom the prior department during September 99,000 Ending work inprocess inventory 29,000 90%
According to the company's records, the conversion cost inbeginning work in process inventory was $16,160 at the beginning ofSeptember. Additional conversion costs of $531,556 were incurred inthe department during the month.
The cost per equivalent unit for conversion costs for Septemberis closest to (Round off to three decimal places.):
$4.642
$4.817
$5.369
$4.669
During February, Degan Inc. transferred $55,000 from Work inProcess to Finished Goods and recorded a Cost of Goods Sold of$60,000 (assume there was enough beginning balance in the Finishedgoods inventory account). The journal entries to record thesetransactions would include a:
credit to Finished Goods of $55,000
debit to Finished Goods of $60,000
credit to Cost of Goods Sold of $60,000
credit to Work in Process of $55,000
Carr Company produces a single product. During the past year,Carr manufactured 42,000 units and sold 28,500 units. Productioncosts for the year were as follows:
Fixed manufacturing overhead $ 420,000 Variable manufacturing overhead $ 525,000 Direct labor $ 344,400 Direct materials $ 445,200
Sales totaled $2,137,500, variable selling expenses totaled$424,200, and fixed selling and administrative expenses totaled$187,000. There were no units in beginning inventory. Assume thatdirect labor is a variable cost.
Under absorption costing, the ending inventory for the year wouldbe valued at (Do not round your intermediate calculations.):
$557,550
$646,129
$752,657
$711,284
The followingdata were taken from the accounting records of Abacus Company whichuses the FIFO method in its process costing system:
Beginning work in process inventory: 30,000 units(materials 100% complete, labor and overhead 70% complete) Started in process during the period: 100,000units Endingwork in process inventory: 40,000 units(materials 100% complete, labor and overhead 80% complete)
The equivalent units are:
Material, 134,000 units; labor and overhead, 132,000 units
Material, 130,000 units; labor and overhead, 122,000 units
Material, 100,000 units; labor and overhead, 101,000 units
Material, 91,000 units; labor and overhead, 83,000 units
Budget data for the Bidwell Company are as follows:
Sales (170,000 units) $1,700,000 Expenses: Fixed Variable Raw materials $ 510,000 Direct labor 340,000 Overhead $ 170,000 255,000 Selling and administrative 187,000
85,000
Total expenses $ 357,000
$ 1,190,000
1,547,000
Netoperating income $ 153,000
The number ofunits Bidwell would have to sell to earn a net operating income of$255,000 is:
170,000 units
119,000 units
204,000 units
255,000 units
DeAnne Company produces a single product. The company's variablecosting income statement for August appears below:
DeAnne Company
Income statement
For the month ended August 31 Sales ($21 per unit) $1,134,000 Variable expenses: Variable cost of goods sold 486,000 Variable selling expense 108,000
Total variable expenses 594,000
Contribution margin 540,000
Fixed expenses: Fixed manufacturing 147,000 Fixed selling and administrative 49,000
Total fixed expenses 196,000 Netoperating income $344,000
The company produced 49,000 units in August and the beginninginventory consisted of 22,000 units. Variable production costs perunit and total fixed costs have remained constant over the pastseveral months.
The value of the company's inventory on August 31 under theabsorption costing method is (Do not round your intermediatecalculations.):
$204,000
$238,000
$153,000
$253,426
Candice Corporation has decided to introduce a new product. Theproduct can be manufactured using either a capital-intensive orlabor-intensive method. The manufacturing method will not affectthe quality or sales of the product. The estimated manufacturingcosts of the two methods are as follows:
Capital-Intensive Labor-Intensive Variable manufacturing cost per unit $ 14.00 $ 17.60 Fixed manufacturing cost per year $ 2,606,000 $ 1,417,600
The company's market research department has recommended anintroductory selling price of $30 per unit for the new product. Theannual fixed selling and administrative expenses of the new productare $600,000. The variable selling and administrative expenses are$2 per unit regardless of how the new product is manufactured.
Required:
a. Calculate the break-even point in units if Candice Corporationuses the (Do not round intermediatecalculations.):
Break-evenpoint
in units Capital-intensive manufacturing method Labor-intensive manufacturing method
b. Determine the unit sales volume at which the net operatingincome is the same for the two manufacturing methods. (Donot round intermediate calculations. Round your answer to thenearest whole number.)
Sales volume
c. Assuming sales of 440,000 units, what is the degree of operatingleverage if the company uses the: (Do not roundintermediate calculations. Round your answers to 2 decimalplaces.)
Degree ofoperating leverage Capital-intensive manufacturing method Labor-intensive manufacturing method
d. What is your recommendation to management concerning whichmanufacturing method should be used, if the sales volume is inexcess of the one calculated under Requirement (b)?
Capital-intensive manufacturing method Labor-intensive manufacturing method
Hickory Company manufactures two productsâ13,000 units ofProduct Y and 5,000 units of Product Z. The company uses aplantwide overhead rate based on direct labor-hours. It isconsidering implementing an activity-based costing (ABC) systemthat allocates all of its manufacturing overhead to four costpools. The following additional information is available for thecompany as a whole and for Products Y and Z: (The totalestimated overhead cost may not agree with the sum of allocatedoverhead costs to each product.)
Activity CostPool ActivityMeasure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 246,000 12,000 MHs Machine setups Number ofsetups $ 137,500 250 setups Production design Number ofproducts $ 89,000 2 products General factory Directlabor-hours $ 357,000 14,000 DLHs
ActivityMeasure Product Y Product Z Machining 7,500 4,500 Number of setups 40 210 Number of products 1 1 Direct labor-hours 8,500 5,500
Required: What is theactivity rate for the Machining activity cost pool? (Roundyour answer to 2 decimal places.)
Machining activity cost pool $ per MH
Ermoin Inc. uses the FIFO method in its process costing system.The following data concern the operations of the company's firstprocessing department for a recent month.
Workin process, beginning: Units in process 2,400 Percent complete with respect tomaterials 70 % Percent complete with respect toconversion 30 % Costs in the beginning inventory: Materials cost $ 4,140 Conversion cost $ 6,265 Units started into production during the month 17,900 Units completed and transferred out 17,900 Costs added to production during the month: Materials cost $ 165,490 Conversion cost $ 560,270 Workin process, ending: Units in process 2,400 Percent complete with respect tomaterials 50 % Percent complete with respect toconversion 30 %
Required:
Using the FIFO method:
a. Determine theequivalent units of production for materials and conversioncosts.
Materials Conversion Equivalent units of production
b. Determine the cost per equivalent unit for materials andconversion costs. (Round your answers to 2 decimalplaces.)
Materials Conversion Costper equivalent unit $ $
c. Determine the cost of ending work in process inventory.(Round your intermediate calculations to 2 decimal placesand final answer to the nearest dollar amount.)
Costof ending work in process inventory $
d. Determine the cost of units transferred out of the departmentduring the month. (Round your intermediate calculations to2 decimal places and final answer to the nearest dollaramount.)
Costof units transferred out $
Mannarelli Corporation uses the FIFO method in its processcosting system. Operating data for the Casting Department for themonth of September appear below:
| Units | PercentComplete with Respect to Conversion | |
| Beginning workin process inventory | 19,000 | 25% |
| Transferred infrom the prior department during September | 99,000 | |
| Ending work inprocess inventory | 29,000 | 90% |
According to the company's records, the conversion cost inbeginning work in process inventory was $16,160 at the beginning ofSeptember. Additional conversion costs of $531,556 were incurred inthe department during the month. |
The cost per equivalent unit for conversion costs for Septemberis closest to (Round off to three decimal places.): |
$4.642
$4.817
$5.369
$4.669
During February, Degan Inc. transferred $55,000 from Work inProcess to Finished Goods and recorded a Cost of Goods Sold of$60,000 (assume there was enough beginning balance in the Finishedgoods inventory account). The journal entries to record thesetransactions would include a:
credit to Finished Goods of $55,000
debit to Finished Goods of $60,000
credit to Cost of Goods Sold of $60,000
credit to Work in Process of $55,000
Carr Company produces a single product. During the past year,Carr manufactured 42,000 units and sold 28,500 units. Productioncosts for the year were as follows:
| Fixed manufacturing overhead | $ 420,000 |
| Variable manufacturing overhead | $ 525,000 |
| Direct labor | $ 344,400 |
| Direct materials | $ 445,200 |
Sales totaled $2,137,500, variable selling expenses totaled$424,200, and fixed selling and administrative expenses totaled$187,000. There were no units in beginning inventory. Assume thatdirect labor is a variable cost.
Under absorption costing, the ending inventory for the year wouldbe valued at (Do not round your intermediate calculations.):
$557,550
$646,129
$752,657
$711,284
| The followingdata were taken from the accounting records of Abacus Company whichuses the FIFO method in its process costing system: |
| Beginning work in process inventory: | 30,000 units(materials 100% complete, labor and overhead 70% complete) |
| Started in process during the period: | 100,000units |
| Endingwork in process inventory: | 40,000 units(materials 100% complete, labor and overhead 80% complete) |
The equivalent units are:
Material, 134,000 units; labor and overhead, 132,000 units
Material, 130,000 units; labor and overhead, 122,000 units
Material, 100,000 units; labor and overhead, 101,000 units
Material, 91,000 units; labor and overhead, 83,000 units
Budget data for the Bidwell Company are as follows:
| Sales (170,000 units) | $1,700,000 | ||
| Expenses: | Fixed | Variable | |
| Raw materials | $ 510,000 | ||
| Direct labor | 340,000 | ||
| Overhead | $ 170,000 | 255,000 | |
| Selling and administrative | 187,000 | 85,000 | |
| Total expenses | $ 357,000 | $ 1,190,000 | 1,547,000 |
| Netoperating income | $ 153,000 |
| The number ofunits Bidwell would have to sell to earn a net operating income of$255,000 is: |
170,000 units
119,000 units
204,000 units
255,000 units
DeAnne Company produces a single product. The company's variablecosting income statement for August appears below:
| DeAnne Company Income statement For the month ended August 31 | |
| Sales ($21 per unit) | $1,134,000 |
| Variable expenses: | |
| Variable cost of goods sold | 486,000 |
| Variable selling expense | 108,000 |
| Total variable expenses | 594,000 |
| Contribution margin | 540,000 |
| Fixed expenses: | |
| Fixed manufacturing | 147,000 |
| Fixed selling and administrative | 49,000 |
| Total fixed expenses | 196,000 |
| Netoperating income | $344,000 |
The company produced 49,000 units in August and the beginninginventory consisted of 22,000 units. Variable production costs perunit and total fixed costs have remained constant over the pastseveral months.
The value of the company's inventory on August 31 under theabsorption costing method is (Do not round your intermediatecalculations.):
$204,000
$238,000
$153,000
$253,426
Candice Corporation has decided to introduce a new product. Theproduct can be manufactured using either a capital-intensive orlabor-intensive method. The manufacturing method will not affectthe quality or sales of the product. The estimated manufacturingcosts of the two methods are as follows:
| Capital-Intensive | Labor-Intensive | |||||||
| Variable manufacturing cost per unit | $ | 14.00 | $ | 17.60 | ||||
| Fixed manufacturing cost per year | $ | 2,606,000 | $ | 1,417,600 | ||||
The company's market research department has recommended anintroductory selling price of $30 per unit for the new product. Theannual fixed selling and administrative expenses of the new productare $600,000. The variable selling and administrative expenses are$2 per unit regardless of how the new product is manufactured. |
Required: | |
| a. | Calculate the break-even point in units if Candice Corporationuses the (Do not round intermediatecalculations.): |
| Break-evenpoint in units | |
| Capital-intensive manufacturing method | |
| Labor-intensive manufacturing method | |
| b. | Determine the unit sales volume at which the net operatingincome is the same for the two manufacturing methods. (Donot round intermediate calculations. Round your answer to thenearest whole number.) |
| Sales volume |
| c. | Assuming sales of 440,000 units, what is the degree of operatingleverage if the company uses the: (Do not roundintermediate calculations. Round your answers to 2 decimalplaces.) |
| Degree ofoperating leverage | |
| Capital-intensive manufacturing method | |
| Labor-intensive manufacturing method | |
| d. | What is your recommendation to management concerning whichmanufacturing method should be used, if the sales volume is inexcess of the one calculated under Requirement (b)? | ||||
|
| Hickory Company manufactures two productsâ13,000 units ofProduct Y and 5,000 units of Product Z. The company uses aplantwide overhead rate based on direct labor-hours. It isconsidering implementing an activity-based costing (ABC) systemthat allocates all of its manufacturing overhead to four costpools. The following additional information is available for thecompany as a whole and for Products Y and Z: (The totalestimated overhead cost may not agree with the sum of allocatedoverhead costs to each product.)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ermoin Inc. uses the FIFO method in its process costing system.The following data concern the operations of the company's firstprocessing department for a recent month.
| Workin process, beginning: | |||||
| Units in process | 2,400 | ||||
| Percent complete with respect tomaterials | 70 | % | |||
| Percent complete with respect toconversion | 30 | % | |||
| Costs in the beginning inventory: | |||||
| Materials cost | $ | 4,140 | |||
| Conversion cost | $ | 6,265 | |||
| Units started into production during the month | 17,900 | ||||
| Units completed and transferred out | 17,900 | ||||
| Costs added to production during the month: | |||||
| Materials cost | $ | 165,490 | |||
| Conversion cost | $ | 560,270 | |||
| Workin process, ending: | |||||
| Units in process | 2,400 | ||||
| Percent complete with respect tomaterials | 50 | % | |||
| Percent complete with respect toconversion | 30 | % | |||
| Required: |
Using the FIFO method: |
| a. | Determine theequivalent units of production for materials and conversioncosts. |
| Materials | Conversion | |
| Equivalent units of production | ||
| b. | Determine the cost per equivalent unit for materials andconversion costs. (Round your answers to 2 decimalplaces.) |
| Materials | Conversion | |
| Costper equivalent unit | $ | $ |
| c. | Determine the cost of ending work in process inventory.(Round your intermediate calculations to 2 decimal placesand final answer to the nearest dollar amount.) |
| Costof ending work in process inventory | $ |
| d. | Determine the cost of units transferred out of the departmentduring the month. (Round your intermediate calculations to2 decimal places and final answer to the nearest dollaramount.) |
| Costof units transferred out | $ |
Related questions
Harmon Company uses the weighted average method in its processcosting system. The Curing Department of Harmon Company reportedthe following information for the month of November
Work in process, beginning | |
Units in process, November 1 | 10,000 |
Stage of completion with respect toconversion | 80% |
Costs in the beginninginventory: | |
Materials cost | $34,500 |
Conversion costs | $48,600 |
Units started into production during the month | 28,000 |
Units completed and transferred out | 30,000 |
Costs added to production during the month: | |
Materials cost | $146,000. |
Conversion cost | $194,400 |
Work in process, ending: | |
Units in process, November 30 | 8,000 |
State of completion with respect toconversion | 30% |
ALL MATERIALS ARE ADDED AT THE BEGINNING OF THEPROCESS
Required:
Complete the sections below.
Determine equivalent units of production
Equivalent Units
Materials | Conversion | |
Transferred to next department | ||
| Ending Work in Process: Materials Conversion | ||
Equivalent Units of Production |
Compute the costs per equivalent unit
Equivalent Units
Materials | Conversion | |
Cost of beginning work in process | ||
Cost added during the period | ||
Total Cost | ||
Equivalent units of production | ||
Cost per equivalent unit |
Determine the total cost of ending work in process inventory andthe total cost of units transferred to the next process
Materials | Conversion | Total | |
| Ending work in process inventory: Equivalent units of production Cost per equivalent unit Cost of ending work in process inventory | |||
| Units completed and transferred out: Units transferred to next department Cost per equivalent unit Costs of units completed & transferred out |
Prepare a report that reconciles the total costs assigned to theending work in process inventory and the units transferred out withthe costs in beginning inventory and costs added during theperiod
| Costs to be accounted for: Cost of beginning work in process inventory Costs added to production during the period Total cost to be accounted for: | |
| Costs accounted for as follows: Cost of ending work in process inventory Cost of units completed and transferred out Total cost accounted for |
avalt Corporation uses the weighted-average method in itsprocess costing system. The Molding Department is the seconddepartment in its production process. The data below summarize thedepartment's operations in January. |
| Units | PercentComplete with Respect to Conversion | |
| Beginning work inprocess inventory | 4,900 | 84% |
| Transferred in fromthe prior department during January | 58,200 | |
| Completed andtransferred to the next department during January | 56,100 | |
| Ending work inprocess inventory | 7,000 | 75% |
The Molding Department's cost per equivalent unit for conversioncost for January was $8.80. How much conversion cost was assignedto the ending work in process inventory in the Molding Departmentfor January? (Round your final answer to nearest wholedollar.) |
Harmon Company uses the weighted average method in its processcosting system. The Curing Department of Harmon Company reportedthe following information for the month of November
Work in process, beginning | |
Units in process, November 1 | 10,000 |
Stage of completion with respect toconversion | 80% |
Costs in the beginninginventory: | |
Materials cost | $34,500 |
Conversion costs | $48,600 |
Units started into production during the month | 28,000 |
Units completed and transferred out | 30,000 |
Costs added to production during the month: | |
Materials cost | $146,000. |
Conversion cost | $194,400 |
Work in process, ending: | |
Units in process, November 30 | 8,000 |
State of completion with respect toconversion | 30% |
ALL MATERIALS ARE ADDED AT THE BEGINNING OF THEPROCESS
Required:
Complete the sections below.
Determine equivalent units of production
Equivalent Units
Materials | Conversion | |
Transferred to next department | 30000 | 30000 |
| Ending Work in Process: Materials Conversion | 8000 | 2400 |
Equivalent Units of Production | 38000 | 32400 |
Compute the costs per equivalent unit
Equivalent Units
Materials | Conversion | |
Cost of beginning work in process | 34500 | 48600 |
Cost added during the period | 146000 | 194400 |
Total Cost | 180500 | 243000 |
Equivalent units of production | 38000 | 32400 |
Cost per equivalent unit | 4.75 | 7.50 |
Determine the total cost of ending work in process inventory andthe total cost of units transferred to the next process
Materials | Conversion | Total | |
| Ending work in process inventory: Equivalent units of production Cost per equivalent unit Cost of ending work in process inventory | |||
| Units completed and transferred out: Units transferred to next department Cost per equivalent unit Costs of units completed & transferred out |
Prepare a report that reconciles the total costs assigned to theending work in process inventory and the units transferred out withthe costs in beginning inventory and costs added during theperiod
| Costs to be accounted for: Cost of beginning work in process inventory Costs added to production during the period Total cost to be accounted for: | |
| Costs accounted for as follows: Cost of ending work in process inventory Cost of units completed and transferred out Total cost accounted for |
I put my answers for part 1 and 2 please answers part 3and 4. Put your answers in the table please.
