Question :
57) What the difference between a weighted-average method of process : 1217020
57) What is the difference between a weighted-average method of process costing and a first-in, first-out method of process costing?
58) Universal Industries operates a division in Brazil, a country with very high inflation rates. Traditionally, the company has used the same costing techniques in all countries to facilitate reporting to corporate headquarters. However, the financial accounting reports from Brazil never seem to match the actual unit results of the division. Management has studied the problem and it appears that beginning inventories may be the cause of the unmatched information. The reason for this is that the inventories have a different financial base because of the severe inflation.
Required:
How can process costing assist in addressing the problem facing Universal Industries?
Objective 17.5
1) In a process-costing system when goods move from department to department, the accounting for such transfers is relatively simple under:
A) standard costing
B) FIFO costing
C) weighted-average costing
D) operations costing
2) Transferred-in costs are treated as if they are:
A) conversion costs added at the beginning of the process
B) costs of beginning inventory added at the beginning of the process
C) direct labor costs added at the beginning of the process
D) a separate direct material added at the beginning of the process
3) Ampco Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were for June 20X5:
Work in process, beginning inventory50,000 units
Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (90% complete)
Transferred in during current period150,000 units
Completed and transferred out175,000 units
Work in process, ending inventory
Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (65% complete)
How many units must be accounted for during the period?
A) 225,000 units
B) 200,000 units
C) 179,500 units
D) 150,000 units
4) Ampco Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were for August 20X5:
Work in process, beginning inventory100,000 units
Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (90% complete)
Transferred in during current period300,000 units
Completed and transferred out250,000 units
Work in process, ending inventory50,000
Transferred-in costs (100% complete)
Direct materials (0% complete)
Conversion costs (65% complete)
Calculate equivalent units for conversion costs using the FIFO method.
A) 401,500 units
B) 350,000 units
C) 300,000 units
D) 292,500 units
5) Transferred-in costs are incurred in previous departments that are carried forward as the product’s cost as it moves to a subsequent process in the production cycle.
6) Transferred-in costs are treated as if they are a separate type of direct material added at the beginning of the process.
7) In order for a process-costing system to work, all units must be measured in the same denominations in all of the departments within the organization.
8) Each department is regarded as a distinct accounting entity when interdepartmental transfers are present in an organization.
