. The Modelling Department of AMC Inc. incurred $295,000 in direct material costs and $120,600 in conversion costs during the period. The beginning work-in-process inventory costs include $25,000 in direct material costs and $38,000 in conversion costs. The equivalent units of production for direct materials and conversion costs are 8,000 and 5,200, respectively. At the end of the period, 4,500 units are completed and transferred to the next processing department. Compute the costs per equivalent units for conversion costs under the weighted-average method. (Round your answer to the nearest cent.) Group of answer choices $23.19 per EUP $36.88 per EUP $30.50 per EUP $40.00 per EUP
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
9. The Modelling Department of AMC Inc. incurred $295,000 in direct material costs and $120,600 in conversion costs during the period. The beginning work-in-
Compute the costs per equivalent units for conversion costs under the weighted-average method. (Round your answer to the nearest cent.)
Group of answer choices
$23.19 per EUP
$36.88 per EUP
$30.50 per EUP
$40.00 per EUP
10. The use of activity-based costing (ABC) normally results in:
Group of answer choices
Decreased setup costs being charged to low-volume products.
Substantially lower unit costs for low-volume products than is reported by traditional product costing.
Equalizing setup costs for all product lines.
Substantially greater unit costs for low-volume products than is reported by traditional product costing.
11. Floyd Inc. produces the following three items of stuffed toys using an automated technology: Bear, Puppy, and Bunny. The estimation for the number of units produced, machine hours used, and direct labor hours used for each toy during the current year is as follows:
|
Product |
Number of units | Machine hours (MH) | Direct labor hours (DLH) |
|---|---|---|---|
| Bear | 2,000 | 8,000 MH | 700 DLH |
| Puppy | 3,000 | 5,000 MH | 1,000 DLH |
| Bunny | 5,000 | 4,000 MH | 2,300 DLH |
The total machine running costs incurred during the year is $204,000. The allocation of machine running costs to these three items is based on machine hours. How much machine running costs are expected to be allocated to Puppy during the year?
Group of answer choices
$60,000
$8,400
$96,000
$48,000
12. Evergreen Inc. expects to manufacture 4,000 refrigerators during the last quarter of the current year. The company uses activity-based costing to determine the product costs. The manufacturing activities and associated information is provided as follows:
| Overhead costs assigned ($) | Number of cost driver | |
|---|---|---|
| Material handling | 120,000 | 240,000 Parts |
| Devising | 400,000 | 50,000 Machine hours (MH) |
| Assembling | 168,000 | 240,000 Parts |
| Finishing | 120,000 | 2,000 Finishing hours (FH) |
Each refrigerator uses 30 parts and requires 5 machine hours and 1 finishing hour during the production process. The direct material costs and direct labor costs required for each refrigerator is $500 and $90 respectively.
The amount of finishing costs allocated to each refrigerator would be: (Round your answer to two decimal points)
Group of answer choices
$15.00 per unit
$8.00 per unit
$21.00 per unit
$60.00 per unit
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