the manner in which the potential cost should be recorded by Company M.

Question

Unit costs for materials and conversion cost amount to $4 and $5 respectively. The ending work in process costs for 8,000 units (100% result as to material and 70% result as to conversion costs) amount to A) $60,000. B) $72,000. C) $44,000. D) $40,000.

Answer 1

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 8, Problem 8.14BE

To determine

the manner in which the potential cost should be recorded by Company M.

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Unit costs for materials and conversion cost amount to $4 and $5 respectively. The ending work in process costs for 8,000 units (100% result as to material and 70% result as to conversion costs) amount to A) $60,000. B) $72,000. C) $44,000. D) $40,000.

In 2019, a company reported sales revenue of Landon Manufacturing Company produced 2,000 units of inventory in March 2023. It expects to produce an additional 18,000 units during the remaining nine months of the year, resulting in an estimated total production of 20,000 units for 2023. The direct materials and direct labor costs per unit are $72 and $60, respectively. The company expects to incur the following manufacturing overhead costs for the 2023 accounting period: ⚫ Production supplies: $12,000 • Supervisor salary: $200,000 Depreciation on equipment: $80,000 ⚫ Utilities: $25,000 • Rental fee on manufacturing facilities: $55,000 a. Combine the individual overhead costs into a cost pool and calculate a predetermined overhead rate assuming the cost driver is the number of units. b. Determine the total cost of the 2,000 units produced in March.

General accounting problem

Answer 2

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 8, Problem 8.14BE

To determine

the manner in which the potential cost should be recorded by Company M.

Expert Solution & Answer

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Answer 3

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 8, Problem 8.14BE

To determine

the manner in which the potential cost should be recorded by Company M.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Answer 4

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 8, Problem 8.14BE

To determine