Question : SHORT ANSWER. Write the word or phrase that best completes each : 1196131

 

SHORT ANSWER.

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

There are basically two distinct methods of calculating product costs.

 

Required:

Compare and contrast the two methods.

 72)

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73)

Why do we need to accumulate and calculate unit costs in process costing (and also job costing)?

 73)

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74)

The Zygon Corporation was recently formed to produce a semiconductor chip that forms an essential part of the personal computer manufactured by a major corporation. The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process. June is Zygon’s first month of operations, and therefore, there was no beginning inventory. Direct materials cost for the month totaled $895,000, while conversion costs equaled $4,225,000. Accounting records indicate that 475,000 chips were started in June and 425,000 chips were completed.

 

Ending inventory was 50% complete as to conversion costs.

 

Required:

a.What is the total manufacturing cost per chip for June?

b.Allocate the total costs between the completed chips and the chips in ending inventory.

 74)

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75)

Treated Lumber Company specializes in processing treated wood. All direct materials are included at the inception of the sawing process and conversion occurs evenly throughout the process. For December there was no beginning inventory in the sawmill. Direct materials totalled $399,750 for the month and conversion costs totalled $165,000. work-in-process records revealed that 75,000 boardmetres were started in December and that 55,000 boardmetres were completed. Ending work-in-process units are complete only in respect to direct materials costs.

 

Required:

 

a.What is the total manufacturing cost per equivalent unit (boardmetres) for December?

b.What are the costs assigned to completed boardmetres in December?

c.What are the costs transferred out during December?

d.What are the amounts assigned to December’s ending work-in-process inventory? 75)

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76)

The following production-cost worksheet has been prepared for the month of December for Ag Chemical.

 

Production-Cost Worksheet

Weighted-Average Method of Process Costing

Ag Chemical

December, 20×1

CostsTotalsDirect MaterialsConversion

Work in process, beginning$ 36,000$12,000$24,000

Costs added during period114,00040,00074,000

Total costs to account for$150,000$52,000$98,000

Divided by equivalent units20,00014,000

Equivalent unit costs $9.60$2.60$7.00

 

Assignment of costs:

Costs transferred out (12,000 x $9.60)$115,200

Work in process, ending

Direct materials (8,000 x $2.6) 20,800

Conversion (2,000 x $7)14,000

Costs accounted for$150,000

 

Required:

 

a.Record costs of materials requisitions for December.

b.Record conversion costs incurred in December.

c.Record goods transferred-out to finished goods for December. 76)

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77)

Scarborough Chemical placed 440,000 litres of direct materials into the mixing process. At the end of the month, 20,000 litres were still in process, 30 percent converted as to labour and factory overhead. All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process. Scarborough Chemical uses weighted-average costing.

 

Required:

 

a.Determine the equivalent units in process for direct materials and conversion costs assuming there was no beginning inventory.

b.Determine the equivalent units in process for direct materials and conversion costs assuming that 24,000 litres of chemicals were 40 percent complete prior to the addition of the 440,000 litres. 77)

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78)

Calendar Time Company prints calendars. All direct materials are included at the inception of the printing process. There were 20,000 units in beginning inventory with a direct material cost of $1,000 in March. Direct materials totalled $26,000 for the month. work-in-process records revealed that 160,000 calendars were started in March and that a total of 144,000 were completed. Ending work-in-process units are complete in respect to direct materials costs and contain no labour and overhead costs. The weighted-average method is used by Calendar Time.

 

Required:

 

a.Determine the equivalent units of materials.

b.What are the material costs assigned to completed calendars?

c.What amount of materials is assigned to the ending work-in-process inventory?

78)

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79)

Amana Woolens is a manufacturer of wool cloth. The information for February is as follows:

 

Beginning work-in-process20,000 units

Units started40,000 units

Units completed50,000 units

 

Beginning work-in-process direct materials$12,000

Beginning work-in-process conversion$ 5,200

Direct materials added during month$60,000

Direct manufacturing labour during month$24,000

Factory overhead$10,000

 

Beginning work-in-process was half converted as to labour and overhead. Direct materials are added at the beginning of the process. All conversion costs are incurred evenly throughout the process. Ending work-in-process was 60 percent complete.

 

Required:

 

Prepare a production cost worksheet (similar to exhibits 17-4 and 17-5), using the weighted-average method. Include any necessary supporting schedules. 79)

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80)

Four Seasons Company makes snow blowers. 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. Other data for the month include:

 

Beginning work-in-process inventory1,600 units

Units started2,000 units

Units placed in finished goods3,200 units

Conversion costs$200,000

Cost of direct materials$260,000

Beginning work-in-process costs:

Materials$154,000

Conversion$ 82,080

 

Required:

 

a.Prepare a production cost worksheet (similar to exhibits 17-4 and 17-5), with supporting schedules using the weighted-average method of process costing.

b.Prepare journal entries to record transferring of materials to processing and from processing to finished goods. 80)

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