Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Chapter 17, Problem 4TIF
(a)
To determine
Explain the reaction towards this accounting procedure.
(b)
To determine
Explain the hidden costs that are not considered when accounting for broke as described.
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Scribners Corporation produces fine papers in three production departments—Pulping, Drying, and Finishing. In the Pulping Department, raw materials such as wood fiber and rag cotton are mechanically and chemically treated to separate their fibers. The result is a thick slurry of fibers. In the Drying Department, the wet fibers transferred from the Pulping Department are laid down on porous webs, pressed to remove excess liquid, and dried in ovens. In the Finishing Department, the dried paper is coated, cut, and spooled onto reels. The company uses the weighted-average method in its process costing system. Data for March for the Drying Department follow:
Percent Completed
Units
Pulping
Conversion
Work in process inventory, March 1
2,500
100
%
80
%
Work in process inventory, March 31
7,600
100
%
75
%
Pulping cost in work in process inventory, March 1
$
1,050…
1. Explain the role of activity drivers in assigning costs to
products.
2. Why are the accounting requirements for job order
costing more demanding than those of process costing?
3. Folio Glass produces custom glass platters. For one
job, the trainee assigned to cut the glass set the template
incorrectly into the computer. This template was unusable
and had to be discarded; another template was cut to the
correct dimensions. How is the cost of the spoiled
template handled?
Folio Glass produces custom glass platters. For one job, the trainee assigned to cut the glass set the template incorrectly into the computer. This template was unusable and had to be discarded; another template was cut to the correct dimensions. How is the cost of the spoiled template handled?
Chapter 17 Solutions
Financial And Managerial Accounting
Ch. 17 - Which type of cost system, process or job order,...Ch. 17 - In job order cost accounting, the three elements...Ch. 17 - In a job order cost system, direct labor and...Ch. 17 - Why is the cost per equivalent unit often...Ch. 17 - What is the purpose for determining the cost per...Ch. 17 - Rameriz Company is a process manufacturer with two...Ch. 17 - What is the most important purpose of the cost of...Ch. 17 - How are cost of production reports used for...Ch. 17 - Job order versus process costing Which of the...Ch. 17 - Kraus Steel Company has two departments, Casting...
Ch. 17 - The Rolling Department of Kraus Steel Company had...Ch. 17 - The Rolling Department of Kraus Steel Company had...Ch. 17 - The cost of direct materials transferred into the...Ch. 17 - The costs per equivalent unit of direct materials...Ch. 17 - In October, the cost of materials transferred into...Ch. 17 - Analyzing changes in unit costs The costs of...Ch. 17 - Entries for materials cost flows in a process cost...Ch. 17 - Flowchart of accounts related to service and...Ch. 17 - Radford Inc. manufactures a sugar product by a...Ch. 17 - The cost accountant for River Rock Beverage Co....Ch. 17 - The Converting Department of Worley Company had...Ch. 17 - Data for the two departments of Kimble Pierce...Ch. 17 - The following information concerns production in...Ch. 17 - a. Based upon the data in Exercise 17-7, determine...Ch. 17 - Equivalent units of production Kellogg Company...Ch. 17 - Costs per equivalent unit Georgia Products Inc....Ch. 17 - The charges to Work in ProcessAssembly Department...Ch. 17 - a. Based on the data in Exercise 17-11, determine...Ch. 17 - Errors in equivalent unit computation Napco...Ch. 17 - Cost per equivalent unit The following information...Ch. 17 - Costs per equivalent unit and production costs...Ch. 17 - Cost of production report The debits to Work in...Ch. 17 - Cost of Production report The Cutting Department...Ch. 17 - Cost of production and journal entries AccuBlade...Ch. 17 - Cost of production and journal entries Lighthouse...Ch. 17 - Process costing for a service company Madison...Ch. 17 - The Converting Department of Tender Soft Tissue...Ch. 17 - Units of production data for the two departments...Ch. 17 - The following information concerns production in...Ch. 17 - Equivalent units of production and related costs...Ch. 17 - The following information concerns production in...Ch. 17 - The increases to Work in ProcessRoasting...Ch. 17 - Prepare a cost of production report for the...Ch. 17 - Entries for process cost system Port Ormond Carpet...Ch. 17 - Cost of production report Hana Coffee Company...Ch. 17 - Equivalent units and related costs; cost of...Ch. 17 - Work in process account data for two months; cost...Ch. 17 - Sunrise Coffee Company roasts and packs coffee...Ch. 17 - Entries for process cost system Preston Grover...Ch. 17 - Cost of production report Bavarian Chocolate...Ch. 17 - Equivalent units and related costs; cost of...Ch. 17 - Work in process account data for two months; cost...Ch. 17 - Blue Ribbon Flour Company manufactures flour by a...Ch. 17 - Dura-Conduit Corporation manufactures plastic...Ch. 17 - Analyzing process cost elements across product...Ch. 17 - Analyzing process cost elements over time Pix...Ch. 17 - Prob. 4MADCh. 17 - Ethics in Action You are the Cookie division...Ch. 17 - Communications Jamarcus Bradshaw, plant manager of...Ch. 17 - Prob. 4TIFCh. 17 - During December, Krause Chemical Company had the...Ch. 17 - Jones Corporation uses a first-in, first-out...Ch. 17 - Kimbeth Manufacturing uses a process cost system...Ch. 17 - A company is using process costing with the...
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- LaCroix Company produces handbags from leather of moderate quality. It distributes the product through outlet stores and department store chains. At LaCroix’s facility in northeast Ohio, direct materials (primarily leather hides) are added at the beginning of the process, while conversion costs are added evenly during the process. Given the importance of minimizing product returns, spoiled units are detected upon inspection at the end of the process and are discarded at a net disposal value of zero. LaCroix uses the weighted-average method of process costing. Summary data for April 2017 are as follows: Q.For each cost category, calculate equivalent units. Show physical units in the first column of your schedule.arrow_forwardLaCroix Company produces handbags from leather of moderate quality. It distributes the product through outlet stores and department store chains. At LaCroix’s facility in northeast Ohio, direct materials (primarily leather hides) are added at the beginning of the process, while conversion costs are added evenly during the process. Given the importance of minimizing product returns, spoiled units are detected upon inspection at the end of the process and are discarded at a net disposal value of zero. LaCroix uses the weighted-average method of process costing. Summary data for April 2017 are as follows: Q.Summarize the total costs to account for; calculate the cost per equivalent unit for each cost category; and assign costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process.arrow_forwardAmber Company produces custom framing. For one job, the trainee assigned to cut the mat set the mat dimensions incorrectly into the computer. The mat was unusable and had to be discarded; another mat was cut to the correct dimensions. How is the cost of the spoiled mat handled? What additional costs can occur with the spoiled mat? What about retraining for the employee or punishment costs?arrow_forward
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