Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Textbook Question
Chapter 6, Problem 28E
As goods are transferred from a prior process to a subsequent process, the following entry to record the cost of abnormal spoilage would be made:
- a. debit Work in Process (subsequent department) and credit Work in Process (prior department)
- b. debit Abnormal Spoilage Loss and credit Work in Process (prior department)
- c. debit Finished Goods and credit Work in Process (prior department)
- d. debit Finished Goods and credit Abnormal Loss
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During the production process, company incurred normal spoilage and abnormal loss. Such losses are added to _______________________.
a.
Cost of goods sold
b.
Production cost
c.
Process cost
d.
Finished goods
Clear my choice
Which of the following is true of abnormal spoilage?
a. It is considered to be part of production.
b. It is normally treated as a period cost
c. It is normally treated as a product cost.
d. It is prorated between cost of goods sold and inventory.
In process costing, if an abnormal loss arises, the process account is generally:
a) debited with the scrap value of the abnormal loss units
b) credited with the scrap value of the abnormal loss units
c) debited with the full production cost of the abnormal loss units
d) credited with the full production cost of the abnormal loss units
Chapter 6 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 6 - What is a process? Provide an example that...Ch. 6 - Describe the differences between process costing...Ch. 6 - Prob. 3DQCh. 6 - What are transferred-in costs?Ch. 6 - Explain why transferred-in costs are a special...Ch. 6 - What is a production report? What purpose does...Ch. 6 - Can process costing be used for a service...Ch. 6 - What are equivalent units? Why are they needed in...Ch. 6 - How is the equivalent unit calculation affected...Ch. 6 - Describe the five steps in accounting for the...
Ch. 6 - Under the weighted average method, how are...Ch. 6 - Under what conditions will the weighted average...Ch. 6 - In assigning costs to goods transferred out, how...Ch. 6 - Prob. 14DQCh. 6 - What is operation costing? When is it used?Ch. 6 - Lamont Company produced 80,000 machine parts for...Ch. 6 - Lising Therapy has a physical therapist who...Ch. 6 - Fleming, Fleming, and Johnson, a local CPA firm,...Ch. 6 - During October, McCourt Associates incurred total...Ch. 6 - Tomar Company produces vitamin energy drinks. The...Ch. 6 - Apeto Company produces premium chocolate candy...Ch. 6 - Jackson Products produces a barbeque sauce using...Ch. 6 - Gunnison Company had the following equivalent...Ch. 6 - Jackson Products produces a barbeque sauce using...Ch. 6 - Morrison Company had the equivalent units schedule...Ch. 6 - Shorts Company has three process departments:...Ch. 6 - A local barbershop cuts the hair of 1,200...Ch. 6 - Friedman Company uses JIT manufacturing. There are...Ch. 6 - Lacy, Inc., produces a subassembly used in the...Ch. 6 - Softkin Company manufactures sun protection...Ch. 6 - Heap Company manufactures a product that passes...Ch. 6 - K-Briggs Company uses the FIFO method to account...Ch. 6 - The following data are for four independent...Ch. 6 - Using the data from Exercise 6.18, compute the...Ch. 6 - Holmes Products, Inc., produces plastic cases used...Ch. 6 - Dama Company produces womens blouses and uses the...Ch. 6 - Fordman Company has a product that passes through...Ch. 6 - Using the same data found in Exercise 6.22, assume...Ch. 6 - Baxter Company has two processing departments:...Ch. 6 - Tasty Bread makes and supplies bread throughout...Ch. 6 - Under either weighted average or FIFO, when...Ch. 6 - During the month of June, the mixing department...Ch. 6 - As goods are transferred from a prior process to a...Ch. 6 - During March, Hanks Manufacturing started and...Ch. 6 - Proteger Company manufactures insect repellant...Ch. 6 - Swasey Fabrication, Inc., manufactures frames for...Ch. 6 - Refer to the data in Problem 6.31. Assume that the...Ch. 6 - Hatch Company produces a product that passes...Ch. 6 - FIFO Method, Single Department Analysis, One Cost...Ch. 6 - Hepworth Credit Corporation is a wholly owned...Ch. 6 - Muskoge Company uses a process-costing system. The...Ch. 6 - Prob. 37PCh. 6 - Healthway uses a process-costing system to compute...Ch. 6 - FIFO Method, Two-Department Analysis Refer to the...Ch. 6 - Jacson Company produces two brands of a popular...Ch. 6 - Golding Manufacturing, a division of Farnsworth...Ch. 6 - Larkin Company produces leather strips for western...Ch. 6 - Novel Toys, Inc., manufactures plastic water guns....Ch. 6 - Prob. 44P
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- In a process account, abnormal losses are valued:A. at their scrap value.B. the same as good production.C. at the cost of raw materials.D. at good production cost less scrap value.arrow_forwardIdentify the material loss, which may be re-cycled for production process. Select one: a) Defectives b) Wastearrow_forwardAnswer classify with explanationarrow_forward
- A cost received by a subsequent process from a prior process is referred to as a: Select one: a. transferred-in cost. b. cost of goods transferred out. c. cost of ending work-in-process. d. cost of beginning work-in-process.arrow_forwardWhat is the usual method of handling the cost of losses that occur normally during processing?arrow_forwardWhich of the following are nonvalue-added activities? a. Moving goods b. Storing goods c. Inspecting finished goods d. Reworking a defective product e. All of these.arrow_forward
- The cost of inventories shall comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Which of the following cost shall be included in the cost of inventories? a. Administrative overheads that do not contribute to bringing inventories to their present location and condition. b. Abnormal amounts of wasted materials, labor or other production costs. c. Storage costs unnecessary in its production process. d. Import duties and other taxes, transport, handling and other costs directly attributable to the acquisition of finished goods, materials and services.arrow_forwardKindly assist with the following: a) Prepare a statement of equivalent production to determine the equivalent units for direct materials (from Process 1 & Direct material added), and conversion costs and the cost per equivalent unit for direct materials and conversion costs. (b) Calculate: Total cost of units completed and transferred to Finished Goods Inventory. Cost of abnormal losses Cost of ending work-in-process inventory in Process 2. c) Prepare Better Choice's Work-in-Process Inventory -Process 2 T-account, clearly showing the ending balance.arrow_forward16) Select the material loss, which severely damaged during production process. a. Defectives b. Scrap c. Spoilage d. Wastearrow_forward
- 2.Costs that are incurred in bringing the inventories to their present location and condition are capitalized as cost of inventories and these include a.costs of designing products for specific customers. b.abnormal amount of wasted materials, labor and production costs. c. storage cost not necessary in the production process before a further production stage. d. selling costs.arrow_forwardIdentify the type of quality cost as per total quality cost concept: A.Lost profit from lost sales from bad review B.Unplanned replacement C.Customer support D.Reprocessing wastearrow_forwardThe cost of is not included in the cost of production a. Abnormal loss b. Direct costs c. Normal loss d. Scraparrow_forward
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