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
Factory overhead
53,600
Beginning work in process
11,000
Ending work in process
11,600
Direct materials used
$
19,300
Direct labor used
24,800
Factory overhead
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
Factory overhead
53,600
Factory overhead 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
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
$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
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
Labor + Factory Overhead
= $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 |
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