Question : SHORT ANSWER. Write the word or phrase that best completes each : 1196141

 

SHORT ANSWER.

Write the word or phrase that best completes each statement or answers the question. 72)

Distinguish among spoilage, reworked units, and scrap. Give an example of each.

 

 72)

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73)

For each of the following items identify whether it is spoilage, reworked units, or scrap.

 

 

_______________a.Defective jeans sold as seconds

_______________b.Shavings

_______________c.Edges from plastic moldings

_______________d.Carpets sold as seconds

_______________e.Precision tools that are not built successfully to the necessary tolerance, but which can be successfully converted to a saleable product

_______________f.Rock extracted as a result of mining processing

_______________g.Complex defective products such as semiconductors

 

 73)

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74)

Marble Shop manufactures marble products. All direct materials are included at the inception of the production process. For April there was no beginning inventory in the processing plant. Direct materials totalled $420,000 for the month. Work in process records revealed that 7,500 tonnes were started in April and that 5,500 tonnes were finished; 500 tonnes were spoiled as expected. Ending work in process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.

 

Required:

 

a.What is the cost per equivalent unit if spoiled units are recognized and if the units are ignored?

b.What are the costs assigned to completed units when spoilage units are recognized and when they are not recognized?

c.What are the costs transferred out if spoilage units are recognized and if they are ignored?

d.What are the amounts allocated to the work in process ending inventory when spoilage units are recognized and when spoilage units are ignored? 74)

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75)

The Clay Shop manufactures pottery products. All direct materials are included at the inception of the

production process. For April, there was no beginning inventory in the processing plant. Direct materials

totaled $310,000 for the month. Work-in-process records revealed that 5,000 kilograms were started in

April and that 3,000 kilograms were finished; 1,000 kilograms were spoiled as expected. Ending

work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the

process is complete.

 

Required:

a.What is the cost per equivalent unit if spoiled units are recognized or ignored?

b.What are the costs assigned to completed units when spoilage units are recognized or when they are not recognized?

c.What are the costs transferred out if spoilage units are recognized or ignored?

d.What are the amounts allocated to the work-in-process ending inventory when spoilage units are recognized or ignored?

 

 75)

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76)

Redwing Shoes manufactures shoes. All direct materials are included at the inception of the production process. For March there were 2,000 units in beginning inventory with a direct material cost of $1,000. Direct materials totalled $20,000 for the month. Work in process records revealed that 40,000 shoes were started in March and that 36,000 were finished. Normal spoilage of 5 percent of units finished was incurred. Ending work in process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete. Redwing uses the weighted-average method.

 

Required:

 

a.What are the direct materials costs assigned to completed good units when spoilage units are recognized and when they are not recognized?

b.What are the direct material amounts allocated to the work in process ending inventory when spoilage units are recognized and when spoilage units are ignored? 76)

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77)

Viking Sports is a manufacturer of sportswear. It produces all of its products in one department. The information for the current month is as follows:

 

Beginning work in process20,000 units

Units started40,000 units

Units completed50,000 units

Ending work in process8,000 units

Spoilage2,000 units

 

Beginning work in process direct materials$12,000

Beginning work in process conversion$ 4,000

Direct materials added during month$60,000

Direct manufacturing labour during month$20,000

 

Beginning work in process was half complete as to conversion. Direct materials are added at the beginning of the process. Factory overhead is applied at a rate equal to 50 percent of direct manufacturing labour. Ending work in process was 60 percent complete. All spoilage is normal and is detected at end of the process.

 

Required:

 

Prepare a production cost worksheet (similar to exhibit 18-2), assuming that spoilage is recognized and the weighted-average method is used. 77)

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78)

The Skate Board Company uses a process cost system for making skateboard wheels. Materials are added at the beginning of the process and conversion costs are uniformly incurred. At the beginning of September the work in process is 40 percent complete and at the end of the month it is 60 percent complete. Spoilage is detected at the end of the process. Other data for the month include:

 

Beginning work in process inventory1,600 units

Units started20,000 units

Units placed in finished goods12,000 units

Ending work in process inventory1,200 units

Normal spoilage of units finished20 percent

 

Conversion costs$40,320

Cost of direct materials$40,000

Beginning work in process costs:

Materials$ 4,000

Conversion$ 4,032

 

Required:

 

a.Prepare a production cost worksheet (similar to exhibit 18-2), using the weighted-average method of process costing. Recognize spoilage.

b.Prepare journal entries to record transferring out of cost from the work in process accounts. 78)

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79)

New Image Sports uses a process costing system. Direct materials are placed into production at the beginning of the process. All spoilage is normal and is detected at the end of the process. For March the company had the following activities:

 

Beginning work in process inventory6,000 units, one third complete

Units placed in production24,000 units, one third complete

Good units completed18,000 units, one third complete

Ending work in process inventory10,000 units, one half complete

Cost of beginning work in process$5,000

Direct material costs, current$18,000

Conversion costs, current$13,800

 

Required:

 

Prepare a production cost worksheet, (similar to exhibit 18-3), using the FIFO method. 79)

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80)

Weather Instruments assembles products from component parts. It has two departments that process all products. During January the beginning work in process in the assembly department was half completed as to conversion and complete as to direct materials. The beginning inventory included $12,000 for materials and $4,000 for conversion costs. Overhead is applied at the rate of 50 percent of direct manufacturing labour costs. Ending work in process inventory in the assembly department was 40 percent complete. All spoilage is considered normal and is detected at the end of the process. Beginning work in process in the finishing department was 75 percent complete as to conversion and ending work in process was 25 percent converted. Direct materials are added at the end of the process. Beginning inventories included $16,000 for transferred-in costs and $10,000 for conversion costs. Overhead in this department is equal to direct manufacturing labour costs. Additional information about the two departments follows:

 

AssemblyFinishing

Beginning work in process units20,00024,000

Units started this period40,000?

Units transferred this period50,00054,000

Ending work in process units8,00020,000

Material costs added$44,000$28,000

Direct manufacturing labour$16,000$24,000

 

Required:

 

Prepare a production cost worksheet (see exhibits 18-2 and 18-3), using weighted-average for the assembly department and FIFO for the finishing department. 80)

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