FUND.ACCT.PRIN.
25th Edition
ISBN: 9781260247985
Author: Wild
Publisher: RENT MCG
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Chapter 20, Problem 25E
Exercise 20-25 Recording cost flows in a
Re-Tire produces bagged mulch made from recycled tires. Production involves shredding tires and bagging the pieces in the Bagging department. All direct materials enter in the Shredding process. The following describes production operations for October.
| 1 | A | B |
| 2 | Direct materials used (Shredding) | $ 522.000 |
| 3 |
Direct labor used (20% in Shredding: GD% in Bagging | $130.000 |
| 4 | Predetermined |
175% |
| 5 | Transferred to Bagging | $ 595.000 |
| 6 | Transferred from Bagging to finished goods | $580.000 |
The company's revenue for the month totaled $950.000 from credit sales, and its cost of goods sold for the month is $540.000. Prepare summary
Check (3: Cr. Factory Overhead, 35227.500
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Discussion
Fen Furnishings produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing
and Packaging. Costs incurred in the Polishing Department during January are summarized as follows:
WIP - Polishing Process A/C
January 1 Bal.
Transfer from Moulding
Direct Materials Added
20,000
1,310,000
391,600
638,000
307,400
Direct Labour
Manufacturing Overhead
Normal losses are estimated to be 2%% of input during the period. Inspection takes place during the processing operation, at
which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each.
At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion:
Transfer from Moulding
100%
Direct material added
40%
Conversion costs
20%
Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion:
Transfer from Moulding
100%
Direct material added
80%…
Please answer part iv
Tools & More uses three departments to produce plastic handles for screwdrivers. Forming the handles require mixing the raw materials, molding and drying. After the drying process, the screwdrivers are completed by assembling the handles and the shanks and packing for shipment. The following information relates to the molding process:
There was no opening WIP stock
5,000 kilos of material at $43.08 per kilo entered the process
Direct materials added
$92,000
Direct wages incurred
65,700
Production overhead
75,100
Normal loss is 4% of input
A quality control check was done at the end of the molding process and 350 handles were rejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00 each, and it is company’s policy to credit the process account with the scrap value of the normal loss units.
Closing WIP was 800 units but these were incomplete, having reached the following percentages of…
Module 4 - Activity-Based Costing: Activity 1
Problem on Activity based costing:
Babes Manufacturing, Inc. Provided the following information for the month of
October, 2020:
Product Honey
Product Hapi
850 units
Number of units produced
Activities/Cost Drivers:
450 units
Materials handling
Production set-up
Quality inspections
Machine depreciation
Additional data:
900 kilos
9 runs
80 hours
3,200 kilos
15 runs
120 hours
280 hours
505 hours
Direct material per unit
Direct labor
Factory overhead is applied at the rate of 100% based on direct labor cost
Estimated overhead costs for October, 2020 amounts to P160,000. The
product is selling at 20% above cost.
P400.00
P600
50% of direct materials
Factory overhead costs estimates for year 2020:
Estimated number
Estimated
Acfivity
Cost Drivers
of cost drivers
Overhead cost
Materials handling
Production set-up
Quality inspections
Machine depreciation Machine hours
No. Of kilos
No. Of rund
Inspection hours
50,000 kilos
300 runs
4,000 hours
20,000…
Chapter 20 Solutions
FUND.ACCT.PRIN.
Ch. 20 - Prob. 1QSCh. 20 - Prob. 2QSCh. 20 - Process vs. job order operations C1 For each of...Ch. 20 - Physical flow reconciliation C2 Prepare a physical...Ch. 20 - Prob. 5QSCh. 20 - A FIFO: Computing equivalent units C4 Refer to QS...Ch. 20 - Prob. 7QSCh. 20 - Prob. 8QSCh. 20 - Prob. 9QSCh. 20 - Prob. 10QS
Ch. 20 - Prob. 11QSCh. 20 - Prob. 12QSCh. 20 - Prob. 13QSCh. 20 - Prob. 14QSCh. 20 - Prob. 15QSCh. 20 - Prob. 16QSCh. 20 - A FIFO: Journal entry to transfer costs P4 Refer...Ch. 20 - Prob. 18QSCh. 20 - Weighted average: Assigning costs to output C3...Ch. 20 - Prob. 20QSCh. 20 - Prob. 21QSCh. 20 - Prob. 22QSCh. 20 - Recording costs of materials P1 Hotwax mates...Ch. 20 - Prob. 24QSCh. 20 - Recording costs of factory overhead P1 P3 Prepare...Ch. 20 - Recording transfer of costs to finished goods P4...Ch. 20 - Prob. 27QSCh. 20 - Prob. 28QSCh. 20 - Prob. 29QSCh. 20 - Exercise 20-1 Process vs. job order operations C1...Ch. 20 - Exercise 20-2 Comparing process and job order...Ch. 20 - Prob. 3ECh. 20 - Prob. 4ECh. 20 - Prob. 5ECh. 20 - Prob. 6ECh. 20 - Prob. 7ECh. 20 - Exercise 20-8 Weighted average: Computing...Ch. 20 - Prob. 9ECh. 20 - Prob. 10ECh. 20 - Prob. 11ECh. 20 - Prob. 12ECh. 20 - Exercise 20-13A
FIFO: Completing a process cost...Ch. 20 - Exercise 20-14 Production cost flow and...Ch. 20 - Exercise 20-15 Recording product costs P1 P2 P3...Ch. 20 - Prob. 16ECh. 20 - Prob. 17ECh. 20 - Prob. 18ECh. 20 - Prob. 19ECh. 20 - Prob. 20ECh. 20 - Prob. 21ECh. 20 - Exercise 20-22 Recording costs of labor P2 Prepare...Ch. 20 - Prob. 23ECh. 20 - Prob. 24ECh. 20 - Exercise 20-25 Recording cost flows in a process...Ch. 20 - Exercise 20-26 Interpretation of journal entries...Ch. 20 - Prob. 27ECh. 20 - Prob. 28ECh. 20 - Prob. 29ECh. 20 - Prob. 30ECh. 20 - Prob. 1PSACh. 20 - Prob. 2PSACh. 20 - Prob. 3PSACh. 20 - Problem 20-4A Weighted average: Process cost...Ch. 20 - Problem 20-5AA FIFO: Process cost summary:...Ch. 20 - Prob. 6PSACh. 20 - Prob. 7PSACh. 20 - Prob. 1PSBCh. 20 - Prob. 2PSBCh. 20 - Prob. 3PSBCh. 20 - Prob. 4PSBCh. 20 - Problem 20-5BA FIFO: Process cost summary;...Ch. 20 - Problem 20-6BAFIFO: Costs per equivalent unit;...Ch. 20 - Problem 20-7BA FIFO: Process cost summary,...Ch. 20 - Prob. 20SPCh. 20 - Prob. 20CPCh. 20 - Prob. 1GLPCh. 20 - Apple has entered into contracts that require the...Ch. 20 - Apple and Google work to maintain high-quality and...Ch. 20 - Prob. 3AACh. 20 - Prob. 1DQCh. 20 - Prob. 2DQCh. 20 - Prob. 3DQCh. 20 - Prob. 4DQCh. 20 - Prob. 5DQCh. 20 - Explain in simple terms the notion of equivalent...Ch. 20 - Prob. 7DQCh. 20 - Prob. 8DQCh. 20 - Direct labor costs flow through what accounts in a...Ch. 20 - Prob. 10DQCh. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Companies such as Apple commonly prepare a process...Ch. 20 - Prob. 15DQCh. 20 - Prob. 16DQCh. 20 - Prob. 17DQCh. 20 - How could a company manager use a process cost...Ch. 20 - Explain a hybrid costing system. Identify' a...Ch. 20 - Prob. 1BTNCh. 20 - Prob. 2BTNCh. 20 - Many companies use technology to help them improve...Ch. 20 - Prob. 4BTN
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- Expected Cost Setting up equipment Ordering materials $141,000 10,800 87,500 Machining Receiving 25,500 Silven produces two models of cell phones with the following expected activity demands: Model X 5,200 80 200 Units completed Number of setups Number of orders Machine hours Receiving hours Required: Activity Model X Model Y Model X Model Y 5,000 425 Model X Model Y 156,100 108,700 1. Determine the total overhead assigned to each product using the four activity drivers. Total Overhead Assigned $ ✓ Total Overhead Assigned X Model Y Activity Driver Activity Capacity Number of setups Number of orders Machine hours Receiving hours 2. Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatively inexpensive activities are allocated to the two expensive activities in proportion to their costs. Round interim calculations to two decimal places and round your final answers to the nearest dollar. Percentage Error 10,400 % % 40 400…arrow_forwardPART 2 All Things Brass produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP - Polishing Process A/C $0 January 1 Bal. Transfer from Moulding Direct Materials Added 20,000 1,310,000 391,600 638,000 307,400 Direct Labour Manufacturing Overhead Normal losses are estimated to be 2%% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the fllowing degree of completion: Transfer from Moulding Direct material added 100% 40% Conversion costs 20% Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added 80%…arrow_forwardQuestion 3 Tools & More uses three departments to produce plastic handles for screwdrivers. Forming the handles require mixing the raw materials, molding and drying. After the drying process, the screwdrivers are completed by assembling the handles and the shanks and packing for shipment. The following infomation relates to the molding process: There was no opening WIP stock 5,000 kilos of material at $43.08 per kilo entered the Direct materials added Direct wages incurred Production overhead Nomal loss is 4% of input process $92,000 65.700 75.100 A quality control check was done at the end of the molding process and 350 handles were rejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00 each, and it is company's policy to credit the process account with the scrap value of the normal loss units. Closing WIP was 800 units but these were incomplete, having reached the following percentages of completion for each of the elements of cost listed…arrow_forward
- Exercise 17-17 (Algo) Using activity-based costing to allocate overhead, compute product cost and gross profit LO P3 Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow. Process Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage Assembly Machining $ 311,800 Machine hours (MH) 7,400 Setups 22,000 Setups 120 $ 333,800 Finishing Inspecting $ 232,000 Inspections 740 Support Purchasing $ 132,000 Purchase orders 540 Additional production information concerning its two models follows. Units and Activities Model X Model Z Units produced 2,200 4,400 Machine hours 2,200 5,200 Setups 40 80 Inspections 480 260 Purchase orders 360 180 Per Unit Model X Model Z Selling price per unit $ 415 $ 395 Direct materials cost per unit 155 115 Direct labor cost per unit 120 135 1. Compute the activity rate for each activity using…arrow_forwardQuestion 3 Tools & More uses three departments to produce plastic handles for screwdrivers. Forming the handles require mixing the raw materials, molding and drying. After the drying process, the screwdrivers are completed by assembling the handles and the shanks and packing for shipment. The following information relates to the molding process: There was no opening WIP stock 5,000 kilos of material at $43.08 per kilo entered the process Direct materials added $92,000 Direct wages incurred 65,700 Production overhead 75,100 Normal loss is 4% of input A quality control check was done at the end of the molding process and 350 handles were rejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00 each, and it is company's policy to credit the process account with the scrap value of the normal loss units. Closing WIP was 800 units but these were incomplete, having reached the following percentages of completion for each of the elements of cost listed…arrow_forwardQuestion 3 Tools & More uses three departments to produce plastic handles for screwdrivers. Forming the handles require mixing the raw materials, molding and drying. After the drying process, the screwdrivers are completed by assembling the handles and the shanks and packing for shipment. The following information relates to the molding process: There was no opening WIP stock 5,000 kilos of material at $43.08 per kilo entered the process Direct materials added $92,000 Direct wages incurred 65,700 Production overhead 75,100 Normal loss is 4% of input A quality control check was done at the end of the molding process and 350 handles were rejected as spoilage. Spoiled units, regardless of their degree of completion, are sold at $45.00 each, and it is company’s policy to credit the process account with the scrap value of the normal loss units. Closing WIP was 800 units but these were incomplete, having reached the following percentages of…arrow_forward
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