Hoyt, Incorporated has a process costing system at its Forest Street Plant. All materials are introduced when conversion costs reach 40 percent. The following information is available for physical units during August: Units started in August Units transferred out to Finishing Department in August Work in process, August 1 (85% complete as to conversion costs) Work in process, August 31 (25% complete as to conversion costs) Required: a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method. b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method. c. The company president has been under considerable pressure to increase income. He tells the controller to change the estimated completion for ending work in process to 45 percent (from 25 percent). c-1. What effect will this change have on the unit costs of units transferred to finished goods in March? c-2. Would this be ethical? c-3. Is this likely to be a successful strategy for affecting income over a long period of time? Complete this question by entering your answers in the tabs below. Req A Req B Materials Conversion costs Answer is complete but not entirely correct. Reg C1 Reg C2 199,000 214,000 59,000 44,000 Reg C3 Compute the equivalent units for materials costs and for conversion costs using the FIFO method. Equivalent Units 165.000 100 750 < Req A ReqC1 >
Hoyt, Incorporated has a process costing system at its Forest Street Plant. All materials are introduced when conversion costs reach 40 percent. The following information is available for physical units during August: Units started in August Units transferred out to Finishing Department in August Work in process, August 1 (85% complete as to conversion costs) Work in process, August 31 (25% complete as to conversion costs) Required: a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method. b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method. c. The company president has been under considerable pressure to increase income. He tells the controller to change the estimated completion for ending work in process to 45 percent (from 25 percent). c-1. What effect will this change have on the unit costs of units transferred to finished goods in March? c-2. Would this be ethical? c-3. Is this likely to be a successful strategy for affecting income over a long period of time? Complete this question by entering your answers in the tabs below. Req A Req B Materials Conversion costs Answer is complete but not entirely correct. Reg C1 Reg C2 199,000 214,000 59,000 44,000 Reg C3 Compute the equivalent units for materials costs and for conversion costs using the FIFO method. Equivalent Units 165.000 100 750 < Req A ReqC1 >
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter6: Process Costing
Section: Chapter Questions
Problem 20E: Holmes Products, Inc., produces plastic cases used for video cameras. The product passes through...
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Concept explainers
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.
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Question
Ff.263.
Transcribed Image Text:Hoyt, Incorporated has a process costing system at its Forest Street Plant. All materials are introduced when conversion costs reach
40 percent. The following information is available for physical units during August:
Units started in August
Units transferred out to Finishing Department in August
Work in process, August 1 (85% complete as to conversion costs)
Work in process, August 31 (25% complete as to conversion costs)
Required:
a. Compute the equivalent units for materials costs and for conversion costs using the weighted-average method.
b. Compute the equivalent units for materials costs and for conversion costs using the FIFO method.
c. The company president has been under considerable pressure to increase income. He tells the controller to change the estimated
completion for ending work in process to 45 percent (from 25 percent).
c-1. What effect will this change have on the unit costs of units transferred to finished goods in March?
c-2. Would this be ethical?
c-3. Is this likely to be a successful strategy for affecting income over a long period of time?
Complete this question by entering your answers in the tabs below.
Req A
Req B
Materials
Conversion costs
Answer is complete but not entirely correct.
Reg C1
Reg C2
Reg C3
Compute the equivalent units for materials costs and for conversion costs using the FIFO method.
Equivalent Units
165.000
180,750
< Req A
199,000
214,000
59,000
44,000
Req C1 >
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