Verer Custom Carpentry manufactures chairs in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection, some units are spoiled due to undetectable material defects. Spoiled units generally constitute 5% of the good units. Data provided for March 2017 are as follows: 32,100 units WIP, beginning inventory 3/1/2017 Direct materials (100% complete) Conversion costs (90% complete) Started during March Completed and transferred out WIP, ending inventory 3/31/2017 Direct materials (100% complete) Conversion costs (75% complete) Conta Costs: WIP, beginning inventory: Direct materials Conversion costs Direct materials added Conversion costs added 70,100 units 80,000 units 18,100 units OA. $49,685; $32,932 B. $45,431; $33,395 C. $27,967; $24,400 D. $26,961; $14,906 $70,700 40,800 105,000 128,160 What costs are allocated to the ending work-in- process inventory for direct materials and conversion costs, respectively, using the FIFO method of process costing? (Round any cost per unit calculations to the nearest cent.)
Verer Custom Carpentry manufactures chairs in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection, some units are spoiled due to undetectable material defects. Spoiled units generally constitute 5% of the good units. Data provided for March 2017 are as follows: 32,100 units WIP, beginning inventory 3/1/2017 Direct materials (100% complete) Conversion costs (90% complete) Started during March Completed and transferred out WIP, ending inventory 3/31/2017 Direct materials (100% complete) Conversion costs (75% complete) Conta Costs: WIP, beginning inventory: Direct materials Conversion costs Direct materials added Conversion costs added 70,100 units 80,000 units 18,100 units OA. $49,685; $32,932 B. $45,431; $33,395 C. $27,967; $24,400 D. $26,961; $14,906 $70,700 40,800 105,000 128,160 What costs are allocated to the ending work-in- process inventory for direct materials and conversion costs, respectively, using the FIFO method of process costing? (Round any cost per unit calculations to the nearest cent.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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Transcribed Image Text:Verer Custom Carpentry manufactures chairs in its Processing Department. Direct materials are included at the inception of the production
cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes
place as units are placed into production. After inspection, some units are spoiled due to undetectable material defects. Spoiled units
generally constitute 5% of the good units. Data provided for March 2017 are as follows:
32,100 units
WIP, beginning inventory 3/1/2017
Direct materials (100% complete)
Conversion costs (90% complete)
Started during March
Completed and transferred out
WIP, ending inventory 3/31/2017
Direct materials (100% complete)
Conversion costs (75% complete)
Costs:
WIP, beginning inventory:
Direct materials
Conversion costs
Direct materials added
Conversion costs added
70,100 units
80,000 units
18,100 units
OA. $49,685; $32,932
OB. $45,431; $33,395
OC. $27,967; $24,400
OD. $26,961; $14,906
$70,700
40,800
105,000
128,160
What costs are allocated to the ending work-in-process inventory for direct materials and conversion costs, respectively, using the FIFO
method of process costing? (Round any cost per unit calculations to the nearest cent.)
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