Quiz #2

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1.| Question :| (TCO F) Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. A number of companies in different industries are listed below:

i. Custom boat builder
ii. Frozen cranberry juice processor
iii. Concrete block manufacturer
iv. Winery that produces a number of varietal wines
v. Aluminum refiner that makes aluminum ingots from bauxite ore

Required:

For each company, indicate whether the company is most likely to use job-order costing or process costing.|
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| Student Answer:| | i process costing ii process costing iii job order costing iv process costing v. job order costing | | Instructor Explanation:| |
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| Points Received:| 3 of 15 |
| Comments:| Job Process Process Job Process |
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2.| Question :| (TCO F) Job 827 was recently completed. The following data have been recorded on its job cost sheet:

The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13 per machine-hour.

Required: Compute the unit product cost that would appear on the job cost sheet for this job.|
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| Student Answer:| | dm 61050 dl 18648 oh 481000 tota l560698 | | Instructor Explanation:| |
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| Points Received:| 10 of 15 |
| Comments:| oh 19240 |
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3.| Question :| (TCO F) Alake Company is a manufacturing firm that uses job-order costing. At the beginning of the year, the company's inventory balances were as follows:

The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 36,000 machine-hours and incur $216,000 in manufacturing overhead cost. The following transactions were recorded for the year:

i. Raw materials were purchased, $443,000.
ii. Raw materials were requisitioned for use in production, $450,000 ($435,000 direct and $15,000 indirect). iii. The following employee costs were incurred: direct labor, $229,000; indirect labor, $54,000; and administrative salaries, $117,000. iv. Selling costs, $119,000.

v. Factory utility costs, $21,000.
vi. Depreciation for the year was $121,000 of which $114,000 is related to factory operations and $7,000 is related to selling, general, and administrative activities. vii. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 38,000 machine-hours. viii. The cost of goods manufactured for the year was $910,000. xiv. Sales for the year totaled $1,173,000 and the costs on the job cost sheets of the goods that were sold totaled $895,000. xv. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold.

Required: Prepare the appropriate journal entry for each of the items above (a. through j.). You can assume that all transactions with employees, customers, and suppliers were conducted in cash.|

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| Student Answer:| | i RM 443000 AP 443000 ii wip 435000 moh 15000 rm 380000 iii wip 229000 moh 54000 Amin Sal 117000 S & W pay 400000 iv moh 119000 ap 119000 v. mfo 121000 deo exp 121000 vi moh ap vii moh 910000 ap 910000 xiv fg 895000 wip278000 cash 1173000 | | Instructor Explanation:|

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| Points Received:| 6 of 15 |
| Comments:| refer to the problem we did on class d selling expense e ? F 7000 depreciation Exp vii applied oh, wip, oh I & J? |
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4.| Question :| (TCO F) Auger Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Required:

i. Determine the equivalent units of production.

ii. Determine the costs per equivalent unit.

iii. Determine the cost of ending work in process inventory.

iv. Determine the...
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