A firm uses backflush costing to assign product costs to inventory and values inventory using throughput accounting. All actual amounts are equal to budgeted amounts. The firm has no variable overhead. Total DM $1,500 Total DL $500 Total Fixed OH $300 Total complete & in process 10,000 units Ending raw materials $0 The firm has 35 units in finished goods inventory and 25 units in process. Which journal entry appropriately backflushes costs to inventory accounts? O Debit: RIP $5 Debit: Finished Goods $7 Credit: COGS $12 O Debit: COGS $12 Credit: RIP $5 Credit: Finished Goods $7 O Debit: RIP $3.75 Debit: Finished Goods $5.25 Credit: COGS $9 O Debit: COGS $9 Credit: RIP $3.75 Credit: Finished Goods $5.25

A firm uses backflush costing to assign product costs to inventory and values inventory using throughput accounting. All actual amounts are equal to budgeted amounts. The firm has no variable overhead. Total DM $1,500 Total DL $500 Total Fixed OH $300 Total complete & in process 10,000 units Ending raw materials $0 The firm has 35 units in finished goods inventory and 25 units in process. Which journal entry appropriately backflushes costs to inventory accounts? O Debit: RIP $5 Debit: Finished Goods $7 Credit: COGS $12 O Debit: COGS $12 Credit: RIP $5 Credit: Finished Goods $7 O Debit: RIP $3.75 Debit: Finished Goods $5.25 Credit: COGS $9 O Debit: COGS $9 Credit: RIP $3.75 Credit: Finished Goods $5.25

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 1CE: Cicleta Manufacturing has four activities: receiving materials, assembly, expediting products, and...

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Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 70,000. b. Requisitioned raw materials to production, 70,000. c. Distributed direct labor costs, 15,000. d. Factory overhead costs incurred, 45,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 195,000, on account. (Hint: Use a single account for raw materials and work in process.)
Required information [The following information applies to the questions displayed below.] Victory Company uses weighted average process costing. The company has two production processes. Conversion cost is added evenly throughout each process. Direct materials are added at the beginning of the first process. Additional information for the first process follows. Beginning work in process inventory. Units started this period Units completed and transferred out Ending work in process inventory Beginning work in process inventory Direct materials Conversion Costs added this period Direct materials Conversion Total costs to account for Cost assignment-Weighted average Completed and transferred out Direct materials Conversion Ending work in process Direct materials Conversion Total costs accounted for Units EUP 72,000 882,000 775,000 179,000 $ 558,090 84,660 3,734,910 1,608,540 Direct Materials Percent Complete 100% 3. Assign costs to the department's output-specifically, to the units…
Cost behavior refers to the manner in which a. a cost is used in setting selling prices b. a cost is estimated c. a cost is allocated to products d. a cost changes as the related activity changes Under variable costing, which of the following costs would not be included in finished goods inventory? a. direct labor cost b. fixed factory overhead cost c. direct materials cost d. variable factory overhead cost The following data relate to direct labor costs for February: Actual costs 7,700 hours at $14.00 Standard costs 7,000 hours at $16.00 What is the direct labor time variance? a. $7,700 favorable b. $11,200 unfavorable c. $11,200 favorable d. $7,700 unfavorable
Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools-- Processing, Supervising, and Other. The costs in those activity cost pools appear below: Processing $ 3,800 $ 23,800 $ 10,400 Supervising other Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below: Batches MHs (Processing) (Supervising) Product MO 9,700 500 Product M5 300 500 Total 10,000 1,000 Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. Product MO Product M5 $ 74,100 $ 28,500 $ 27,800 $ 89,900 $ 31,400 $ 41,700 Sales (total) Direct materials (total) Direct labor (total) What is the product margin for Product M5 under activity-based costing? Multiple Choice C4786
The EUP will be the same under FIFO method and weighted average methos if there is no beginning work in process inventory. In process costing the cost per unit in a department is found by spreading the period’s production costs over the production activity. Group of answer choices Both statements are false. Only statement I is true. Only statement II is true. Both statements are true.
Part 2: Based on the data presented in the Unit VII Spreadsheet Template in Excel (Full Variable tab), complete thecalculations listed below.• Calculate the value of ending inventory under full or absorption costing.• Calculate the value of ending inventory under variable costing.Which method you think is more helpful to managers and why. Cookie Business Productions Costs: Direct material $ 0.60 Direct labor $ 1.00 Variable manufacturing overhead $ 0.40 Total variable manufacturing costs per unit $ 2.00 Fixed manufacturing overhead per year $ 139,000.00 In addition, the company has fixed selling and administrative costs: Fixed selling costs per year $ 50,000.00 Fixed administrative costs per year $ 65,000.00 Selling price per cookie $ 3.75 Number of cookies produced 2,780,000 Number of cookies sold 2,600,000 Full (absorption) costing : Full…
Learned Corporation has provided the following information: Direct materials. Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions a. Total product cost b. Total period cost Cost per Unit Cost per Period $ 5.80 $ 4.00 $ 1.60 c. Contribution margin per unit d. Total direct manufacturing cost e. Total indirect manufacturing cost $ 0.70 $ 0.60 Variable administrative expense Fixed selling and administrative expense Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 6,000 units? b. For financial reporting purposes, what is the total amount of period costs incurred to sell 6,000 units? c. If the selling price is $23.30 per unit, what is the contribution margin per unit sold? Note: Round your answer to 2 decimal places. d. If 7,000 units are produced, what is the total amount of direct manufacturing cost incurred? e. If 7,000 units are produced, what is the total amount of indirect manufacturing…
The information and data in Tables 1, 2, and 3 will be used to determine cost drivers and calculate overheads. Table 1 (Product information) X Y Z High volume Medium volume Low volume Large batches Medium batches Low batches Few purchaseOrders placed Medium purchaseOrders placed Many purchaseOrders placed Few customerOrders placed Medium customerOrders placed Many customerOrders placed Table 2 (Product Information) X Y Z Total Typical batch size 2000 600 325 No. of production runs 25 50 50 125 No. of inspections 25 50 50 125 Purchase orders placed 25 100 200 325 Customer orders received 10 100 200 310 Table 3 Analysis of indirect labour K'000 K'000 Machining:…
keAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false E Print Item Sitka Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for one ladder (unit): Standard Standard Standard %3D Quantity Price Cost Direct materials 3 pounds $4.50 per pound $13.50 Direct labor 2.00 hours 12.00 per hour 24.00 Total cost $37.50 Sitka Industries made 3,100 ladders in July and used 9,200 pounds of material to make these units. Sitka Industries bought 15,600 pounds of material in the curr period. There was a $300 unfavorable direct materials price variance. Enter all amounts as positive numbers. A. How much in total did Sitka pay for the 15,600 pounds? Amount paid B. What is the direct materials quantity variance? Direct materials quantity variance $ C. What is the total direct materials cost variance? Total direct materials cost variance $ D. What if 9,800 pounds were used to make these…
1. I. The EUP will be the same under FIFO method and weighted average methos if there is no beginning work in process inventory.Il. In process costing the cost per unit in a department is found by spreading the period's production costs over the production activity.a. Both statements are false.b. Only statement I is true.c. Only statement Il is true.d. Both statements are true 2. I. Under the weighted average method, the equivalent units used to compute the unit costs of ending inventories relate only to work done during the current period.Il. Discrete production losses are assumed to occur uniformly throughout the process. a. Both statements are true.b. Only statement Il is truec. Both statements are false.d. Only statement I is true.
Desjarlais Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Activity Cost Pools Activity Rate Setting up batches $ 83.25 per batch Assembling products $ 13.88 per assembly hour Processing customer orders $ 61.41 per customer order Data concerning two products appear below: Product S96U Product Q06F Number of batches 33 45 Number of assembly hours 104 844 Number of customer orders 16 33 Required: a. How much overhead cost would be assigned to Product S96U using the company's activity-based costing system? (Round your intermediate calculations and final answer to 2 decimal places.) b. How much overhead cost would be assigned to Product Q06F using the company's activity-based costing system? (Round your intermediate calculations and final answer to 2 decimal places.)
As a new accountant of the company, you are provided with the following information related to KOKO: Product Annual production and sales unit Direct material cost per unit Direct labour cost per unit Machine hours per unit Selling price per unit Koko 5,500 RM50 RM35 3 hours RM150 The company is considering of changing the traditional method to the Activity Based Costing (ABC) method. In order to adopt ABC method the following information is required: Activity Cost Cost Driver Pool Expected overhead Expected use of drivers per product Other products 3,500 costs Коко (RM) No of purchase orders Machine hours Maintenance Maintenance hours Number of inspections Total Purchasing 4,000 37,500 Machining 16,500 8,000 1,500 147,000 43,000 3,500 Quality control 1900 1600 17,500 245,000 Required: a. If the company decided to use the Activity Based Costing (ABC) method, determine the cost per unit of KOKO. Based on your answer in (a), advise whether the company should change to ABC method. Support…