# Which of the following statements is correct concerning the days’ sales in raw materials inventory?

1) Which of the following statements is correct concerning the
Days’ sales in raw materials inventory? Multiple Choice

A measure of how long it takes raw materials to be used in
production.

The ratio is not useful for a manufacturer.

Reveals how many times a company turns over its raw materials
inventory in a period.

Most companies generally prefer a higher number of days’ sales
in raw materials inventory.

Is calculated by taking the Raw materials used/Average raw
materials inventory.

A measure of how long it takes raw materials to be used in
production.

The ratio is not useful for a manufacturer.

Reveals how many times a company turns over its raw materials
inventory in a period.

Most companies generally prefer a higher number of days’ sales
in raw materials inventory.

Is calculated by taking the Raw materials used/Average raw
materials inventory.
2) Using the information below for Sundar Company; determine the
total manufacturing costs added during the current year:

Direct materials used
\$
19,300

Direct labor used

24,800

53,600

Beginning work in process

11,000

Ending work in process

11,600

Direct materials used
\$
19,300

Direct labor used

24,800

53,600

Beginning work in process

11,000

Ending work in process

11,600

Direct materials used
\$
19,300

Direct materials used \$ 19,300
Direct labor used

24,800

Direct labor used 24,800

53,600

Beginning work in process

11,000

Beginning work in process 11,000
Ending work in process

11,600

Ending work in process 11,600

Multiple Choice

\$97,700.

\$44,100.

\$97,100.

\$43,500.

\$77,800.

\$97,700.

\$44,100.

\$97,100.

\$43,500.

\$77,800.
3) At the beginning of the recent period, there were 1,200 units of
product in a department, 35% completed. These units were finished
and an additional 6,000 units were started and completed during the
period. 1,200 units were still in process at the end of the period,
25% completed. Using the weighted average method, the equivalent
units produced by the department were: Multiple Choice

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8,400 units.

7,200 units.

7,500 units.

6,700 units.

6,000 units.

8,400 units.

7,200 units.

7,500 units.

6,700 units.

6,000 units.
4) Richards Corporation uses the FIFO method of process costing.
The following information is available for October in its
Fabricating Department: Units:
Beginning Inventory: 81,000 units, 80% complete as to materials and
20% complete as to conversion.
Units started and completed: 251,000.
Units completed and transferred out: 332,000.
Ending Inventory: 30,500 units, 30% complete as to materials and
15% complete as to conversion. Costs:
Costs in beginning Work in Process – Direct Materials:
\$37,200.
Costs in beginning Work in Process – Conversion: \$79,700.
Costs incurred in October – Direct Materials: \$646,800.
Costs incurred in October – Conversion: \$919,300. Calculate the equivalent units of conversion. Multiple Choice

251,000

320,375

284,450

367,075

371,650

251,000

320,375

284,450

367,075

371,650
5) Richards Corporation uses the FIFO method of process costing.
The following information is available for October in its
Fabricating Department: Units:
Beginning Inventory: 98,000 units, 80% complete as to materials and
20% complete as to conversion.
Units started and completed: 268,000.
Units completed and transferred out: 366,000.
Ending Inventory: 39,000 units, 30% complete as to materials and
15% complete as to conversion. Costs:
Costs in beginning Work in Process – Direct Materials:
\$55,200.
Costs in beginning Work in Process – Conversion: \$97,700.
Costs incurred in October – Direct Materials: \$844,050.
Costs incurred in October – Conversion: \$937,300. Calculate the cost per equivalent unit of materials. Multiple Choice

\$2.78

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\$2.51

\$2.27

\$2.82

\$2.38

\$2.78

\$2.51

\$2.27

\$2.82

\$2.38
6) Following is a partial process cost summary for Mitchell
Manufacturing’s Canning Department.

Equivalent Units of Production
Direct Materials

Conversion

Units Completed and transferred out

92,000

92,000

Units in Ending Work in Process:

Direct Materials (9,000 * 100%)

9,000

Conversion (9,000 * 60%)

5,400

Equivalent Units of Production

101,000

97,400

Cost per Equivalent Unit

Costs of beginning work in process

\$
42,400

\$
62,300

Costs incurred this period

141,900

190,900

Total costs

\$
184,300

\$
253,200

Cost per equivalent unit

\$
1.82
per EUP

\$
2.60
per EUP

Equivalent Units of Production
Direct Materials

Conversion

Units Completed and transferred out

92,000

92,000

Units in Ending Work in Process:

Direct Materials (9,000 * 100%)

9,000

Conversion (9,000 * 60%)

5,400

Equivalent Units of Production

101,000

97,400

Cost per Equivalent Unit

Costs of beginning work in process

\$
42,400

\$
62,300

Costs incurred this period

141,900

190,900

Total costs

\$
184,300

\$
253,200

Cost per equivalent unit

\$
1.82
per EUP

\$
2.60
per EUP

Equivalent Units of Production
Direct Materials

Conversion

Equivalent Units of Production Direct Materials Conversion
Units Completed and transferred out

92,000

92,000

Units Completed and transferred out 92,000 92,000
Units in Ending Work in Process:

Units in Ending Work in Process:
Direct Materials (9,000 * 100%)

9,000

Direct Materials (9,000 * 100%) 9,000
Conversion (9,000 * 60%)

5,400

Conversion (9,000 * 60%) 5,400
Equivalent Units of Production

101,000

97,400

Equivalent Units of Production 101,000 97,400

Cost per Equivalent Unit

Cost per Equivalent Unit
Costs of beginning work in process

\$
42,400

\$
62,300

Costs of beginning work in process \$ 42,400 \$ 62,300
Costs incurred this period

141,900

190,900

Costs incurred this period 141,900 190,900
Total costs

\$
184,300

\$
253,200

Total costs \$ 184,300 \$ 253,200
Cost per equivalent unit

\$
1.82
per EUP

\$
2.60
per EUP

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Cost per equivalent unit \$ 1.82 per EUP \$ 2.60 per EUP

The total conversion costs transferred out of the Canning
Department equals: Multiple Choice

\$253,240.

\$253,200.

\$190,900.

\$184,300.

\$239,200.

\$253,240.

\$253,200.

\$190,900.

\$184,300.

\$239,200.

(1)
Which of the following
statements is correct concerning the Days’ sales in raw materials
inventory?
A measure of how long it takes raw materials to be used
in production
Because this parameter is used to determine that how many time
raw material is takes to be used in production
(2) Total
manufacturing costs added during the current year:-
Direct Material + Direct
= \$19300 + \$24800 + \$53600 =
\$97700
(3)

Under weighted average method, there is need to take 100% of
Beginning WIP for Equivalent Units
(4)

(5)

Cost per equivalent unit of materials = Costs incurred in
October on Direct Materials/Equivalent units
= \$844050/299300 =
\$2.82
(6) Total
conversion costs transferred out of the Canning Department:-
Equivalent cost per unit for conversion cost * number of units
transferred out of the Canning Department
= 92000 * \$2.60 = \$239200

 Beginning WIP 1200 Units started & completed 6000 Ending WIP (1200 * 25%) 300 Equivalent Units 7500 units
 Conversion Beginning WIP (81000 * 80%) 64800 Units started & completed 251000 Ending WIP (30500 * 15%) 4575 Equivalent Units 320375 units
 Material Beginning WIP (98000 * 20%) 19600 Units started & completed 268000 Ending WIP (39000 * 30%) 11700 Equivalent Units 299300 units