ACCTG424 Lecture 3: week 3 notes
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Fast Co. produces its product through a single processingdepartment. Direct materials are added at the start of production,and conversion costs are added evenly throughout the process. Thecompany uses monthly reporting periods for its weighted-averageprocess costing system. The Work in Process Inventory account has abalance of $98,300 as of October 1, which consists of $21,300 ofdirect materials and $77,000 of conversion costs.
During the month the company incurred the followingcosts:
Directmaterials | $ | 160,150 |
Conversion | 813,880 | |
During October, the company started 154,000 units and transferred164,000 units to finished goods. At the end of the month, the workin process inventory consisted of 27,000 units that were 80%complete with respect to conversion costs.
Required:
1. Prepare the companyâs process cost summary forOctober using the weighted-average method.
2. Prepare the journal entry dated October 31 totransfer the cost of the completed units to finished goodsinventory.
Prepare the companyâs process cost summary for October using theweighted-average method. (Round "Cost per EUP" to 2 decimalplaces.)
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Record the transfer of goods to finished goods inventory.
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1. Sydney's Barbecue reported the following information:
Sydney's Barbecue
Period Ending December 31, 20XX
Manufacturing costs | $5,400,000 |
Units manufactured | $54,000 |
Beginning inventory in Units | $ 0 |
Note: 45,600 units sold during year at $300 per unit
What is the amount of ending finished goods inventory for theperiod ending December 31, 20XX?
$860,000 | |
$830,000 | |
$840,000 | |
$850,000 | |
$820,000 |
2.Net income reported under absorption costing will exceed netincome reported under variable costing for a given period if
production equals sales for thatperiod. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
variable overhead exceeds fixedoverhead for that period. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
production exceeds sales for thatperiod. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
sales exceed production for that period. 3. A company manufactures wallets. Last month's costs were aslisted below:
What were the conversion costs for the month?
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