exam 7-11-15

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Feb 20, 2024

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QUESTION 1 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 1 – 6. Three Company uses a process organized into two service or support departments (Support 1 and Support 2) and two producing departments (Production 1 and Production 2). Budgeted data for the four departments for the month of January are as follows. Support Departments Producing Departments Support 1 Support 2 Production 1 Production 2 Overhead $100,000 $120,000 $90,000 $80,000 Number of employees 100 300 100 Machine hours 2,000 4,000 4,000 Overhead cost for the Support 1 Department is allocated based on number of employees. Overhead cost for the Support 2 Department is allocated based on machine hours. Note: Round all calculations to two decimal points and all dollar amounts to the nearest dollar. Determine the total overhead cost for Production 1 Department using the direct method to allocate support department costs. $198,000 $224,000 $230,000 $225,000 4 points QUESTION 2 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 1 – 6. Three Company uses a process organized into two service or support departments (Support 1 and Support 2) and two producing departments (Production 1 and Production 2). Budgeted data for the four departments for the month of January are as follows. Support Departments Producing Departments Support 1 Support 2 Production 1 Production 2 Overhead $100,000 $120,000 $90,000 $80,000

Number of employees 100 300 100 Machine hours 2,000 4,000 4,000 Overhead cost for the Support 1 Department is allocated based on number of employees. Overhead cost for the Support 2 Department is allocated based on machine hours. Note: Round all calculations to two decimal points and all dollar amounts to the nearest dollar. Determine the total overhead cost for Production 2 Department using the direct method to allocate support department costs. $148,000 $160,000 $165,000 $154,000 4 points QUESTION 3 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 1 – 6. Three Company uses a process organized into two service or support departments (Support 1 and Support 2) and two producing departments (Production 1 and Production 2). Budgeted data for the four departments for the month of January are as follows. Support Departments Producing Departments Support 1 Support 2 Production 1 Production 2 Overhead $100,000 $120,000 $90,000 $80,000 Number of employees 100 300 100 Machine hours 2,000 4,000 4,000 Overhead cost for the Support 1 Department is allocated based on number of employees. Overhead cost for the Support 2 Department is allocated based on machine hours. Note: Round all calculations to two decimal points and all dollar amounts to the nearest dollar.

Determine the total overhead cost for Production 1 Department using the sequential method to allocate support department costs, starting with Support 2 Department. $212,000 $231,000 $213,000 $224,000 4 points QUESTION 4 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 1 – 6. Three Company uses a process organized into two service or support departments (Support 1 and Support 2) and two producing departments (Production 1 and Production 2). Budgeted data for the four departments for the month of January are as follows. Support Departments Producing Departments Support 1 Support 2 Production 1 Production 2 Overhead $100,000 $120,000 $90,000 $80,000 Number of employees 100 300 100 Machine hours 2,000 4,000 4,000 Overhead cost for the Support 1 Department is allocated based on number of employees. Overhead cost for the Support 2 Department is allocated based on machine hours. Note: Round all calculations to two decimal points and all dollar amounts to the nearest dollar. Determine the total overhead cost for Production 2 Department using the sequential method to allocate support department costs, starting with Support 2 Department. $153,000 $159,000 $154,000

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$160,000 4 points QUESTION 5 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 1 – 6. Three Company uses a process organized into two service or support departments (Support 1 and Support 2) and two producing departments (Production 1 and Production 2). Budgeted data for the four departments for the month of January are as follows. Support Departments Producing Departments Support 1 Support 2 Production 1 Production 2 Overhead $100,000 $120,000 $90,000 $80,000 Number of employees 100 300 100 Machine hours 2,000 4,000 4,000 Overhead cost for the Support 1 Department is allocated based on number of employees. Overhead cost for the Support 2 Department is allocated based on machine hours. Note: Round all calculations to two decimal points and all dollar amounts to the nearest dollar. Determine the total overhead cost for Production 1 Department using the reciprocal method to allocate support department costs. $202,000 $225,833 $198,000 $229,167 4 points QUESTION 6 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 1 – 6. Three Company uses a process organized into two service or support departments (Support 1 and Support 2) and two producing departments (Production 1 and Production 2). Budgeted data for the four departments for the month of January are as follows.

Support Departments Producing Departments Support 1 Support 2 Production 1 Production 2 Overhead $100,000 $120,000 $90,000 $80,000 Number of employees 100 300 100 Machine hours 2,000 4,000 4,000 Overhead cost for the Support 1 Department is allocated based on number of employees. Overhead cost for the Support 2 Department is allocated based on machine hours. Note: Round all calculations to two decimal points and all dollar amounts to the nearest dollar. Determine the total overhead cost for Production 2 Department using the reciprocal method to allocate support department costs. $164,166 $144,000 $160,834 $148,000 4 points QUESTION 7 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 7 – 11. Three Company produces two products (Product 1 and Product 2) from a common input. Joint costs for January total $200,000. Information related to the two products is as follows: Pounds Produced Weight Factor Price at Split-Off Additional Processing costs Final Sales Value Product 1 2,000 1.0 $50 $20 $80 Product 2 3,000 2.0 20 10 60 2. Note: Round all calculations to two decimal points and all dollar amounts to the nearest dollar.

3. Determine the amount of joint costs allocated to Product 1 using the physical units method. $50,000 $80,000 $66,667 $20,000 4 points QUESTION 8 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 7 – 11. Three Company produces two products (Product 1 and Product 2) from a common input. Joint costs for January total $200,000. Information related to the two products is as follows: Pounds Produced Weight Factor Price at Split-Off Additional Processing costs Final Sales Value Product 1 2,000 1.0 $50 $20 $80 Product 2 3,000 2.0 20 10 60 2. Note: Round all calculations to two decimal points and all dollar amounts to the nearest dollar. 3. Determine the amount of joint costs allocated to Product 1 using the weighted average method. 4. $66,667 $50,000 $80,000 $60,000 4 points

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QUESTION 9 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 7 – 11. Three Company produces two products (Product 1 and Product 2) from a common input. Joint costs for January total $200,000. Information related to the two products is as follows: Pounds Produced Weight Factor Price at Split-Off Additional Processing costs Final Sales Value Product 1 2,000 1.0 $50 $20 $80 Product 2 3,000 2.0 20 10 60 2. Note: Round all calculations to two decimal points and all dollar amounts to the nearest dollar. 3. Determine the amount of joint costs allocated to Product 1 using the sales-value- at-split-off method. 4. $125,000 $142,857 $90,909 $133,333 4 points QUESTION 10 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 7 – 11. Three Company produces two products (Product 1 and Product 2) from a common input. Joint costs for January total $200,000. Information related to the two products is as follows: Pounds Weight Price at Additional Final

Produced Factor Split-Off Processing costs Sales Value Product 1 2,000 1.0 $50 $20 $80 Product 2 3,000 2.0 20 10 60 2. Note: Round all calculations to two decimal points and all dollar amounts to the nearest dollar. 3. Determine the amount of joint costs allocated to Product 1 using the net realizable value method. 4. $150,000 $133,333 $110,000 $88,000 4 points QUESTION 11 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 7 – 11. Three Company produces two products (Product 1 and Product 2) from a common input. Joint costs for January total $200,000. Information related to the two products is as follows: Pounds Produced Weight Factor Price at Split-Off Additional Processing costs Final Sales Value Product 1 2,000 1.0 $50 $20 $80 Product 2 3,000 2.0 20 10 60 2. Note: Round all calculations to two decimal points and all dollar amounts to the nearest dollar. 3. Determine the amount of joint costs allocated to Product 1 using the constant gross margin percentage method (based on final sales value).

$86,400 $158,000 $42,000 $126,400 4 points QUESTION 12 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 12 – 15: Assume that Four Company uses backflush costing with two trigger points: the purchase of raw materials and the completion of goods. The journal entry to record the purchase of raw materials would include A debit to cost of goods sold for $250,000 A debit to finished goods inventory for $250,000 A debit to raw materials and in-process inventory for $250,000 No entry would be required 4 points QUESTION 13 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.

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 Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 12 – 15: Assume that Four Company uses backflush costing with two trigger points: the purchase of raw materials and the completion of goods. The journal entry to record the issue of direct materials into production would include No entry would be required A credit to accounts payable for $250,000 A debit to raw materials and in-process inventory for $250,000 A credit to raw materials and in-process inventory for $250,000 4 points QUESTION 14 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 12 – 15:

Assume that Four Company uses backflush costing with two trigger points: the purchase of raw materials and the completion of goods. The journal entry to record the actual overhead cost incurred would include No entry would be required A debit to raw materials and in-process inventory for $220,000 A debit to finished goods inventory for $220,000 A debit to conversion cost control for $220,000 4 points QUESTION 15 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 12 – 15: Assume that Four Company uses backflush costing with two trigger points: the purchase of raw materials and the completion of goods. The journal entry to record the completion of the goods would include No entry would be required A credit to raw materials and in-process inventory for $660,000 A credit to raw materials and in-process inventory for $250,000 A credit to accounts payable for $250,000 4 points

QUESTION 16 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 16 – 19: Assume that Four Company uses backflush costing with two trigger points: the purchase of raw materials and the sale of goods. The journal entry to record the purchase of raw materials would include A debit to finished goods inventory for $250,000 No entry would be required A debit to raw materials and in-process inventory for $250,000 A debit to cost of goods sold for $250,000 4 points QUESTION 17 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15%

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There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 16 – 19: Assume that Four Company uses backflush costing with two trigger points: the purchase of raw materials and the sale of goods. The journal entry to record the direct labor cost incurred would include A debit to raw materials and in-process inventory for $180,000 No entry would be required A debit to finished goods inventory for $180,000 A debit to conversion cost control for $180,000 4 points QUESTION 18 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 16 – 19: Assume that Four Company uses backflush costing with two trigger points: the purchase of raw materials and the sale of goods. The journal entry to record the completion of the goods would include A debit to finished goods inventory for $660,000 No entry would be required A credit to raw materials and in-process inventory for $250,000

A credit to accounts payable for $250,000 4 points QUESTION 19 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 16 – 19: Assume that Four Company uses backflush costing with two trigger points: the purchase of raw materials and the sale of goods. The journal entry to record the sale of the goods would include A credit to accounts payable for $250,000 No entry would be required A credit to finished goods inventory for $660,000 A credit to conversion cost control for $410,000 4 points QUESTION 20 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production

 Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 20 – 22: Assume that Four Company uses backflush costing with one trigger point: the completion of goods. The journal entry to record the purchase of raw materials would include A debit to cost of goods sold for $250,000 No entry would be required A debit to raw materials and in-process inventory for $250,000 A debit to finished goods inventory for $250,000 4 points QUESTION 21 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 20 – 22: Assume that Four Company uses backflush costing with one trigger point: the completion of goods. The journal entry to record the completion of the goods would include

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A credit to accounts payable for $250,000 No entry would be required A credit to wages payable for $180,000 A credit to raw materials and in-process inventory for $250,000 4 points QUESTION 22 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 20 – 22: Assume that Four Company uses backflush costing with one trigger point: the completion of goods. The journal entry to record the sale of goods would include A credit to raw materials and in-process inventory for $250,000 No entry would be required A credit to accounts payable for $250,000 A credit to finished goods inventory for $660,000 4 points QUESTION 23 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25.

Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 23 – 25: Assume that Four Company uses backflush costing with one trigger point: the sale of goods. The journal entry to record the purchase of raw materials would include No entry would be required A debit to raw materials and in-process inventory for $250,000 A debit to finished goods inventory for $250,000 A debit to cost of goods sold for $250,000 4 points QUESTION 24 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month.

FOR QUESTIONS 23 – 25: Assume that Four Company uses backflush costing with one trigger point: the sale of goods. The journal entry to record the completion of goods would include A credit to accounts payable for $250,000 No entry would be required A credit to raw materials and in-process inventory for $250,000 A credit to raw materials and in-process inventory for $660,000 4 points QUESTION 25 1. THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 12 – 25. Four Company had the following transactions during December.  Purchased raw materials on account for $250,000  Issued all materials purchased into production  Incurred actual direct labor cost of $180,000  Incurred actual overhead costs of $220,000  Applied conversion costs of $410,000 ($180,000 of direct labor; $230,000 of overhead)  Completed all units in process  Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month. FOR QUESTIONS 23 – 25: Assume that Four Company uses backflush costing with one trigger point: the sale of goods. The journal entry to record the sale of the goods would include A credit to raw materials and in-process inventory for $250,000 No entry would be required A credit to finished goods inventory for $660,000 A credit to conversion cost control for $410,000

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