6th Edition

ISBN: 9781264022021

Author: LANEN

Publisher: MCG

Concept explainers

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 …

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 compari…

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Textbook Question

Chapter 8, Problem 46E

Operation Costing: Ethical Issues

Brokia Electronics manufactures three cell phone models, which differ only in the components included: Basic, Photo, and UrLife. Production takes place in two departments, Assembly and Special Packaging. The Basic and Photo models are complete after Assembly. The UrLife model goes from Assembly to Special Packaging and is completed there. Data for July are shown in the following table. Conversion costs are allocated based on the number of units produced. There are no work-in-process inventories.

Chapter 8, Problem 46E, Operation Costing: Ethical Issues Brokia Electronics manufactures three cell phone models, which

Required

a. What is the cost per unit transferred to finished goods inventory for each of the three phones in July?
b. The UrLife model is sold only to the government on a cost-plus basis. The marketing vice president suggests that conversion costs in Assembly could be allocated on the basis of material costs so he can offer a lower price for the Basic model.
1. (1) What cost would be reported for the three models if the marketing vice president’s suggestion is adopted?
2. (2) Would this be ethical?

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Chapter 8, Problem 45E

Chapter 8, Problem 47E

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Chapter 8 Solutions

COST ACCOUNTING W/CONNECT

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Solution Summary: The author calculates the cost per unit transferred to finished goods inventory for each of the three phones in July.

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