True or False
Two common operational measures of time are customer-response time and manufacturing lead time
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Wednesday, December 12, 2012
Two common operational measures of time are customer-response time and manufacturing lead time
ACCOUNTING
True or False
Two common operational measures of time are customer-response time and manufacturing lead time
True or False
Two common operational measures of time are customer-response time and manufacturing lead time
Nonfinancial measures of quality are often easy to quantify and easy to understand
ACCOUNTING
True or False
Nonfinancial measures of quality are often easy to quantify and easy to understand
True or False
Nonfinancial measures of quality are often easy to quantify and easy to understand
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The financial cost of quality measures serves as a common denominator for evaluating trade-offs among prevention costs and failure costs
ACCOUNTING
True or False
The financial cost of quality measures serves as a common denominator for evaluating trade-offs among prevention costs and failure costs
True or False
The financial cost of quality measures serves as a common denominator for evaluating trade-offs among prevention costs and failure costs
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Process yield is the ratio of defective units to total output
ACCOUNTING
True or False
Process yield is the ratio of defective units to total output
True or False
Process yield is the ratio of defective units to total output
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The number of defects shipped to customers as a percentage of total units shipped are a type of nonfinancial quality measure
ACCOUNTING
True or False
The number of defects shipped to customers as a percentage of total units shipped are a type of nonfinancial quality measure
True or False
The number of defects shipped to customers as a percentage of total units shipped are a type of nonfinancial quality measure
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Most companies expend a substantial amount of dollars measuring the financial costs of design quality
ACCOUNTING
True or False
Most companies expend a substantial amount of dollars measuring the financial costs of design quality
True or False
Most companies expend a substantial amount of dollars measuring the financial costs of design quality
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Allocated cost amounts are an important determinant of the costs of a quality improvement program
ACCOUNTING
True or False
Allocated cost amounts are an important determinant of the costs of a quality improvement program
True or False
Allocated cost amounts are an important determinant of the costs of a quality improvement program
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A cause-and-effect diagram is used to help identify potential causes of defects
ACCOUNTING
True or False
A cause-and-effect diagram is used to help identify potential causes of defects
True or False
A cause-and-effect diagram is used to help identify potential causes of defects
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A control chart identifies potential causes of failures or defects
ACCOUNTING
True or False
A control chart identifies potential causes of failures or defects
True or False
A control chart identifies potential causes of failures or defects
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Costs of quality (COQ) reports usually do not consider opportunity costs
ACCOUNTING
True or False
Costs of quality (COQ) reports usually do not consider opportunity costs
True or False
Costs of quality (COQ) reports usually do not consider opportunity costs
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In the banking industry, depositing a customer's check into the wrong bank account is an example of quality of design failure
ACCOUNTING
True or False
In the banking industry, depositing a customer's check into the wrong bank account is an example of quality of design failure
True or False
In the banking industry, depositing a customer's check into the wrong bank account is an example of quality of design failure
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Quality of design measures how closely the characteristics of products or services meet the needs and wants of customers
ACCOUNTING
True or False
Quality of design measures how closely the characteristics of products or services meet the needs and wants of customers
True or False
Quality of design measures how closely the characteristics of products or services meet the needs and wants of customers
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ISO 9000 developed by the International Organization for Standardization is a set of five international standards for quality management adopted by more than 85 countries
ACCOUNTING
True or False
ISO 9000 developed by the International Organization for Standardization is a set of five international standards for quality management adopted by more than 85 countries
True or False
ISO 9000 developed by the International Organization for Standardization is a set of five international standards for quality management adopted by more than 85 countries
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Shortening delivery times is a minor part of the quality improvement process
ACCOUNTING
True or False
Shortening delivery times is a minor part of the quality improvement process
True or False
Shortening delivery times is a minor part of the quality improvement process
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Monday, December 10, 2012
Which of the following INCORRECTLY reflects what units passed inspection this period
ACCOUNTING
Multiple Choice
Which of the following INCORRECTLY reflects what units passed inspection this period? Assume beginning work in process was completed and ending work in process was started during the period.
Inspection Point at Completion Level
10% 50% 100%
a. Beginning work in process (30% complete) No Yes Yes
b. Started and completed Yes Yes Yes
c. Ending work in process (40% complete) Yes No No
d. Beginning work in process (5% complete) Yes No No
Multiple Choice
Which of the following INCORRECTLY reflects what units passed inspection this period? Assume beginning work in process was completed and ending work in process was started during the period.
Inspection Point at Completion Level
10% 50% 100%
a. Beginning work in process (30% complete) No Yes Yes
b. Started and completed Yes Yes Yes
c. Ending work in process (40% complete) Yes No No
d. Beginning work in process (5% complete) Yes No No
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Normal spoilage is computed on the basis of
ACCOUNTING
Multiple Choice
Normal spoilage is computed on the basis of
a. the number of good units that pass inspection during the current period.
b. the number of units that pass the inspection point during the current period.
c. the number of units that are 100% complete as to materials.
d. none of the above.
Multiple Choice
Normal spoilage is computed on the basis of
a. the number of good units that pass inspection during the current period.
b. the number of units that pass the inspection point during the current period.
c. the number of units that are 100% complete as to materials.
d. none of the above.
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Which of the following is NOT a major consideration when accounting for scrap
ACCOUNTING
Multiple Choice
Which of the following is NOT a major consideration when accounting for scrap?
a. Keeping detailed records of physical quantities of scrap at all stages of the production process
b. Inventory costing including when and how scrap affects operating income
c. Planning and control including physical tracking
d. Decisions as to whether to group scrap with reworked units
Multiple Choice
Which of the following is NOT a major consideration when accounting for scrap?
a. Keeping detailed records of physical quantities of scrap at all stages of the production process
b. Inventory costing including when and how scrap affects operating income
c. Planning and control including physical tracking
d. Decisions as to whether to group scrap with reworked units
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The accounting for scrap under process costing is similar to
ACCOUNTING
Multiple Choice
The accounting for scrap under process costing is similar to
a. the accounting under job costing when scrap is different for each job.
b. the accounting under job costing when scrap is common to all jobs.
c. the accounting under process costing when scrap is different for each job.
d. the accounting under process costing when scrap is a common to all jobs.
Multiple Choice
The accounting for scrap under process costing is similar to
a. the accounting under job costing when scrap is different for each job.
b. the accounting under job costing when scrap is common to all jobs.
c. the accounting under process costing when scrap is different for each job.
d. the accounting under process costing when scrap is a common to all jobs.
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If scrap, common to all jobs, is returned to the storeroom and the time between the scrap being inventoried and its disposal is quite lengthy, the journal entry is
ACCOUNTING
Multiple Choice
If scrap, common to all jobs, is returned to the storeroom and the time between the scrap being inventoried and its disposal is quite lengthy, the journal entry is:
a. Work-in-Process Control
Materials Control
b. Materials Control
Work-in-Process Control
c. Manufacturing Overhead Control
Materials Control
d. Materials Control
Manufacturing Overhead Control
Multiple Choice
If scrap, common to all jobs, is returned to the storeroom and the time between the scrap being inventoried and its disposal is quite lengthy, the journal entry is:
a. Work-in-Process Control
Materials Control
b. Materials Control
Work-in-Process Control
c. Manufacturing Overhead Control
Materials Control
d. Materials Control
Manufacturing Overhead Control
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Assume the amount of scrap is material and the scrap is sold immediately after it is produced
ACCOUNTING
Multiple Choice
Assume the amount of scrap is material and the scrap is sold immediately after it is produced. If the scrap attributable to a specific job is sold on account, the journal entry is:
a. Work-in-Process Control
Cash
b. Work-in-Process Control
Accounts Receivable
c. Accounts Receivable
Work-in-Process Control
d. Work-in-Process Control
Accounts Receivable
Multiple Choice
Assume the amount of scrap is material and the scrap is sold immediately after it is produced. If the scrap attributable to a specific job is sold on account, the journal entry is:
a. Work-in-Process Control
Cash
b. Work-in-Process Control
Accounts Receivable
c. Accounts Receivable
Work-in-Process Control
d. Work-in-Process Control
Accounts Receivable
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When the amount of scrap is immaterial, the easiest accounting entry when recording scrap sold for cash is
ACCOUNTING
Multiple Choice
When the amount of scrap is immaterial, the easiest accounting entry when recording scrap sold for cash is
a. Sales of Scrap
Cash
b. Cash
Manufacturing Overhead Control
c. Cash
Sales of Scrap
d. Accounts Receivable
Sales of scrap
Multiple Choice
When the amount of scrap is immaterial, the easiest accounting entry when recording scrap sold for cash is
a. Sales of Scrap
Cash
b. Cash
Manufacturing Overhead Control
c. Cash
Sales of Scrap
d. Accounts Receivable
Sales of scrap
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In accounting for scrap, which one of the following statements is FALSE
ACCOUNTING
Multiple Choice
In accounting for scrap, which one of the following statements is FALSE?
a. Normal scrap is accounted for separately from abnormal scrap.
b. In accounting for scrap, there is no distinction between the scrap attributable to a specific job and scrap common to all jobs.
c. Initial entries to scrap accounting records are most often made in dollar terms.
d. All of the above are false.
Multiple Choice
In accounting for scrap, which one of the following statements is FALSE?
a. Normal scrap is accounted for separately from abnormal scrap.
b. In accounting for scrap, there is no distinction between the scrap attributable to a specific job and scrap common to all jobs.
c. Initial entries to scrap accounting records are most often made in dollar terms.
d. All of the above are false.
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Friday, December 7, 2012
Accounting for rework in a process-costing system
ACCOUNTING
Multiple Choice
Accounting for rework in a process-costing system
a. accounts for normal rework in the same way as a job-costing system.
b. requires abnormal rework to be distinguished from normal rework.
c. if the rework is normal, then rework is accounted for in the same manner as accounting for normal rework common to all jobs.
d. all of the above are correct.
Multiple Choice
Accounting for rework in a process-costing system
a. accounts for normal rework in the same way as a job-costing system.
b. requires abnormal rework to be distinguished from normal rework.
c. if the rework is normal, then rework is accounted for in the same manner as accounting for normal rework common to all jobs.
d. all of the above are correct.
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Which of the following entries reflects the original cost assignment before production items are reworked
ACCOUNTING
Multiple Choice
Which of the following entries reflects the original cost assignment before production items are reworked?
a. Work-in-Process Control XXX
Materials Control XXX
Wages Payable Control XXX
Manufacturing Overhead Allocated XXX
b. Finished Goods Control XXX
Work-in-Process Control XXX
c. Manufacturing Overhead Allocated XXX
Materials Control XXX
Wages Payable Control XXX
Work-in-Process Control XXX
d. Materials Control XXX
Wages Payable Control XXX
Work-in-Process Control XXX
Manufacturing Overhead Allocated XXX
Multiple Choice
Which of the following entries reflects the original cost assignment before production items are reworked?
a. Work-in-Process Control XXX
Materials Control XXX
Wages Payable Control XXX
Manufacturing Overhead Allocated XXX
b. Finished Goods Control XXX
Work-in-Process Control XXX
c. Manufacturing Overhead Allocated XXX
Materials Control XXX
Wages Payable Control XXX
Work-in-Process Control XXX
d. Materials Control XXX
Wages Payable Control XXX
Work-in-Process Control XXX
Manufacturing Overhead Allocated XXX
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A difference between job costing and process costing is
ACCOUNTING
Multiple Choice
A difference between job costing and process costing is
a. that job-costing systems usually do not distinguish between normal spoilage attributable to all jobs and normal spoilage attributable to a specific job.
b. that job-costing systems usually distinguish between normal spoilage attributable to a specific job and spoilage common to all jobs.
c. that process costing normally does not distinguish between normal spoilage attributable to a specific job and spoilage common to all jobs.
d. both (b) and (c).
Multiple Choice
A difference between job costing and process costing is
a. that job-costing systems usually do not distinguish between normal spoilage attributable to all jobs and normal spoilage attributable to a specific job.
b. that job-costing systems usually distinguish between normal spoilage attributable to a specific job and spoilage common to all jobs.
c. that process costing normally does not distinguish between normal spoilage attributable to a specific job and spoilage common to all jobs.
d. both (b) and (c).
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1. The Harleysville Manufacturing Shop produces motorcycle parts
ACCOUNTING
Multiple Choice
The Harleysville Manufacturing Shop produces motorcycle parts. Typically, 10 pieces out of a job lot of 1,000 parts are spoiled. Costs are assigned at the inspection point, $50.00 per unit. Spoiled pieces may be disposed of at $10.00 per unit. The spoiled goods must be inventoried appropriately when the normal spoilage is detected. The current job requires the production of 2,500 good parts.
Which of the following journal entries would be correct if the spoilage occurred due to specifications required for Job 101?
a. Work-in-Process Control $100
Materials Control $100
b. Materials Control $100
Work-in-Process Control $100
c. Materials Control $250
Work-in-Process Control $250
d. Work-in-Process Control $250
Materials Control $250
Multiple Choice
The Harleysville Manufacturing Shop produces motorcycle parts. Typically, 10 pieces out of a job lot of 1,000 parts are spoiled. Costs are assigned at the inspection point, $50.00 per unit. Spoiled pieces may be disposed of at $10.00 per unit. The spoiled goods must be inventoried appropriately when the normal spoilage is detected. The current job requires the production of 2,500 good parts.
Which of the following journal entries would be correct if the spoilage occurred due to specifications required for Job 101?
a. Work-in-Process Control $100
Materials Control $100
b. Materials Control $100
Work-in-Process Control $100
c. Materials Control $250
Work-in-Process Control $250
d. Work-in-Process Control $250
Materials Control $250
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The Harleysville Manufacturing Shop produces motorcycle parts
ACCOUNTING
Multiple Choice
The Harleysville Manufacturing Shop produces motorcycle parts. Typically, 10 pieces out of a job lot of 1,000 parts are spoiled. Costs are assigned at the inspection point, $50.00 per unit. Spoiled pieces may be disposed of at $10.00 per unit. The spoiled goods must be inventoried appropriately when the normal spoilage is detected. The current job requires the production of 2,500 good parts.
Which of the following journal entries properly reflects the recording of spoiled goods?
a. Materials Control $ 200
Manufacturing Overhead Control $ 800
Work-in-Process Control $1,000
b. Materials Control $ 250
Manufacturing Overhead Control $1,000
Work-in-Process Control $1,250
c. Work-in-Process Control $1,250
Materials Control $ 250
Manufacturing Overhead Control $1,000
d. Manufacturing Overhead Control $1,000
Materials Control $ 200
Work-in-Process Control $ 800
Multiple Choice
The Harleysville Manufacturing Shop produces motorcycle parts. Typically, 10 pieces out of a job lot of 1,000 parts are spoiled. Costs are assigned at the inspection point, $50.00 per unit. Spoiled pieces may be disposed of at $10.00 per unit. The spoiled goods must be inventoried appropriately when the normal spoilage is detected. The current job requires the production of 2,500 good parts.
Which of the following journal entries properly reflects the recording of spoiled goods?
a. Materials Control $ 200
Manufacturing Overhead Control $ 800
Work-in-Process Control $1,000
b. Materials Control $ 250
Manufacturing Overhead Control $1,000
Work-in-Process Control $1,250
c. Work-in-Process Control $1,250
Materials Control $ 250
Manufacturing Overhead Control $1,000
d. Manufacturing Overhead Control $1,000
Materials Control $ 200
Work-in-Process Control $ 800
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The costs of normal spoilage are allocated to the units in ending work-in-process inventory, in addition to completed units
ACCOUNTING
Multiple Choice
The costs of normal spoilage are allocated to the units in ending work-in-process inventory, in addition to completed units
a. if the units in ending inventory have not passed the inspection point.
b. if the units in ending work-in-process inventory have passed the inspection point.
c. if the units in ending work in process inventory are more than 50% complete.
d. if the units in ending work-in-process inventory are less than 50% complete.
Multiple Choice
The costs of normal spoilage are allocated to the units in ending work-in-process inventory, in addition to completed units
a. if the units in ending inventory have not passed the inspection point.
b. if the units in ending work-in-process inventory have passed the inspection point.
c. if the units in ending work in process inventory are more than 50% complete.
d. if the units in ending work-in-process inventory are less than 50% complete.
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When spoiled goods have a disposal value, the net cost of the spoilage is computed by
ACCOUNTING
Multiple Choice
When spoiled goods have a disposal value, the net cost of the spoilage is computed by
a. deducting disposal value from the costs of the spoiled goods accumulated to the inspection point.
b. adding the costs to complete a salable product to the costs accumulated to the inspection point.
c. calculating the costs incurred to the inspection point.
d. none of the above.
Multiple Choice
When spoiled goods have a disposal value, the net cost of the spoilage is computed by
a. deducting disposal value from the costs of the spoiled goods accumulated to the inspection point.
b. adding the costs to complete a salable product to the costs accumulated to the inspection point.
c. calculating the costs incurred to the inspection point.
d. none of the above.
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The inspection point is
ACCOUNTING
Multiple Choice
The inspection point is
a. the stage of the production cycle where products are checked to determine whether they are acceptable or unacceptable units.
b. the point at which costs are allocated between normal and abnormal spoilage.
c. the point at which the calculation of equivalent units is made.
d. none of the above.
Multiple Choice
The inspection point is
a. the stage of the production cycle where products are checked to determine whether they are acceptable or unacceptable units.
b. the point at which costs are allocated between normal and abnormal spoilage.
c. the point at which the calculation of equivalent units is made.
d. none of the above.
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The standard-costing method
ACCOUNTING
Multiple Choice
The standard-costing method
a. adds a layer of complexity to the calculation of equivalent-unit costs in a process-costing environment.
b. makes calculating equivalent-unit costs unnecessary.
c. requires an analysis of the spoilage costs in beginning inventory.
d. requires an analysis of the spoilage costs in ending inventory.
Multiple Choice
The standard-costing method
a. adds a layer of complexity to the calculation of equivalent-unit costs in a process-costing environment.
b. makes calculating equivalent-unit costs unnecessary.
c. requires an analysis of the spoilage costs in beginning inventory.
d. requires an analysis of the spoilage costs in ending inventory.
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Which of the following journal entries correctly represents the transfer of completed goods for the current period using the FIFO method of process costing
ACCOUNTING
Multiple Choice
Cartwright 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 nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:
WIP, beginning inventory 3/1/20x3 30,000 units
Direct materials (100% complete)
Conversion costs (89.5% complete)
Started during March 80,000 units
Completed and transferred out 86,000 units
WIP, ending inventory 3/31/20x3 20,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Costs:
WIP, beginning inventory:
Direct materials $ 70,000
Conversion costs 40,000
Direct materials added 160,000
Conversion costs added 120,000
Which of the following journal entries correctly represents the transfer of completed goods for the current period using the FIFO method of process costing?
a. Finished Goods $ 10,560.28
Loss from Spoilage $ 10,560.28
b. Loss from Spoilage $ 5,026.80
Finished Goods $ 5,026.80
c. Finished Goods $327,251.00
Work in Process $327,251.00
d. Finished Goods $401,700.00
Work in Process $401,700.00
Multiple Choice
Cartwright 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 nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:
WIP, beginning inventory 3/1/20x3 30,000 units
Direct materials (100% complete)
Conversion costs (89.5% complete)
Started during March 80,000 units
Completed and transferred out 86,000 units
WIP, ending inventory 3/31/20x3 20,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Costs:
WIP, beginning inventory:
Direct materials $ 70,000
Conversion costs 40,000
Direct materials added 160,000
Conversion costs added 120,000
Which of the following journal entries correctly represents the transfer of completed goods for the current period using the FIFO method of process costing?
a. Finished Goods $ 10,560.28
Loss from Spoilage $ 10,560.28
b. Loss from Spoilage $ 5,026.80
Finished Goods $ 5,026.80
c. Finished Goods $327,251.00
Work in Process $327,251.00
d. Finished Goods $401,700.00
Work in Process $401,700.00
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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
ACCOUNTING
Multiple Choice
Cartwright 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 nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:
WIP, beginning inventory 3/1/20x3 30,000 units
Direct materials (100% complete)
Conversion costs (89.5% complete)
Started during March 80,000 units
Completed and transferred out 86,000 units
WIP, ending inventory 3/31/20x3 20,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Costs:
WIP, beginning inventory:
Direct materials $ 70,000
Conversion costs 40,000
Direct materials added 160,000
Conversion costs added 120,000
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?
a. $38,250; $24,850
b. $40,000; $23,100
c. $40,000; $21,590
d. $49,500; $13,600
Multiple Choice
Cartwright 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 nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:
WIP, beginning inventory 3/1/20x3 30,000 units
Direct materials (100% complete)
Conversion costs (89.5% complete)
Started during March 80,000 units
Completed and transferred out 86,000 units
WIP, ending inventory 3/31/20x3 20,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Costs:
WIP, beginning inventory:
Direct materials $ 70,000
Conversion costs 40,000
Direct materials added 160,000
Conversion costs added 120,000
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?
a. $38,250; $24,850
b. $40,000; $23,100
c. $40,000; $21,590
d. $49,500; $13,600
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What costs would be associated with normal and abnormal spoilage, respectively, using the FIFO method of process costing
ACCOUNTING
Multiple Choice
Cartwright 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 nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:
WIP, beginning inventory 3/1/20x3 30,000 units
Direct materials (100% complete)
Conversion costs (89.5% complete)
Started during March 80,000 units
Completed and transferred out 86,000 units
WIP, ending inventory 3/31/20x3 20,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Costs:
WIP, beginning inventory:
Direct materials $ 70,000
Conversion costs 40,000
Direct materials added 160,000
Conversion costs added 120,000
What costs would be associated with normal and abnormal spoilage, respectively, using the FIFO method of process costing?
a. $5,890.64; $9,133.20
b. $5,890.64; $5,826.00
c. $6,469.64; $7,690.36
d. $9,133.20; $5,026.80
Multiple Choice
Cartwright 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 nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:
WIP, beginning inventory 3/1/20x3 30,000 units
Direct materials (100% complete)
Conversion costs (89.5% complete)
Started during March 80,000 units
Completed and transferred out 86,000 units
WIP, ending inventory 3/31/20x3 20,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Costs:
WIP, beginning inventory:
Direct materials $ 70,000
Conversion costs 40,000
Direct materials added 160,000
Conversion costs added 120,000
What costs would be associated with normal and abnormal spoilage, respectively, using the FIFO method of process costing?
a. $5,890.64; $9,133.20
b. $5,890.64; $5,826.00
c. $6,469.64; $7,690.36
d. $9,133.20; $5,026.80
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What are the normal and abnormal spoilage units, respectively, for March when using FIFO
ACCOUNTING
Multiple Choice
Cartwright 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 nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:
WIP, beginning inventory 3/1/20x3 30,000 units
Direct materials (100% complete)
Conversion costs (89.5% complete)
Started during March 80,000 units
Completed and transferred out 86,000 units
WIP, ending inventory 3/31/20x3 20,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Costs:
WIP, beginning inventory:
Direct materials $ 70,000
Conversion costs 40,000
Direct materials added 160,000
Conversion costs added 120,000
What are the normal and abnormal spoilage units, respectively, for March when using FIFO?
a. 2,580 units; 1,420 units
b. 1,950 units; 1,390 units
c. 1,690 units; 1,050 units
d. 1,420 units; 2,000 units
Multiple Choice
Cartwright 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 nondetectible material defects. Spoiled units generally constitute 3% of the good units. Data provided for March 20x3 are as follows:
WIP, beginning inventory 3/1/20x3 30,000 units
Direct materials (100% complete)
Conversion costs (89.5% complete)
Started during March 80,000 units
Completed and transferred out 86,000 units
WIP, ending inventory 3/31/20x3 20,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Costs:
WIP, beginning inventory:
Direct materials $ 70,000
Conversion costs 40,000
Direct materials added 160,000
Conversion costs added 120,000
What are the normal and abnormal spoilage units, respectively, for March when using FIFO?
a. 2,580 units; 1,420 units
b. 1,950 units; 1,390 units
c. 1,690 units; 1,050 units
d. 1,420 units; 2,000 units
Click here for the SOLUTION
Under the FIFO method, all spoilage costs are assumed to be
ACCOUNTING
Multiple Choice
Under the FIFO method, all spoilage costs are assumed to be
a. related to the units in beginning inventory, plus the units completed during the period.
b. related to the units completed during the period.
c. related to the units in ending inventory.
d. related to the units in both beginning and ending inventory plus the units completed during the period.
Multiple Choice
Under the FIFO method, all spoilage costs are assumed to be
a. related to the units in beginning inventory, plus the units completed during the period.
b. related to the units completed during the period.
c. related to the units in ending inventory.
d. related to the units in both beginning and ending inventory plus the units completed during the period.
Click here for the SOLUTION
The cost per good unit in the weighted-average method is equal to
ACCOUNTING
Multiple Choice
The cost per good unit in the weighted-average method is equal to
a. the total cost of direct materials and conversion costs per equivalent unit, plus a share of normal spoilage.
b. the sum of the costs per equivalent unit of direct materials, and conversion costs.
c. the total costs divided by total equivalent units.
d. none of the above.
Multiple Choice
The cost per good unit in the weighted-average method is equal to
a. the total cost of direct materials and conversion costs per equivalent unit, plus a share of normal spoilage.
b. the sum of the costs per equivalent unit of direct materials, and conversion costs.
c. the total costs divided by total equivalent units.
d. none of the above.
Click here for the SOLUTION
What are the amounts of direct materials and conversion costs assigned to ending work in process using the weighted-average process-costing method
ACCOUNTING
Multiple Choice
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:
WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000
What are the amounts of direct materials and conversion costs assigned to ending work in process using the weighted-average process-costing method?
a. $18,720; $24,000
b. $22,900; $19,820
c. $24,000; $18,720
d. $28,560; $14,160
Multiple Choice
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:
WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000
What are the amounts of direct materials and conversion costs assigned to ending work in process using the weighted-average process-costing method?
a. $18,720; $24,000
b. $22,900; $19,820
c. $24,000; $18,720
d. $28,560; $14,160
Click here for the SOLUTION
What cost is allocated to abnormal spoilage using the weighted-average process-costing method
ACCOUNTING
Multiple Choice
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:
WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000
What cost is allocated to abnormal spoilage using the weighted-average process-costing method?
a. $ 0
b. $ 7,360
c. $11,088
d. $16,400
Multiple Choice
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:
WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000
What cost is allocated to abnormal spoilage using the weighted-average process-costing method?
a. $ 0
b. $ 7,360
c. $11,088
d. $16,400
Click here for the SOLUTION
What is the total cost per equivalent unit using the weighted-average method of process costing
ACCOUNTING
Multiple Choice
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:
WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000
What is the total cost per equivalent unit using the weighted-average method of process costing?
a. $3.00
b. $3.60
c. $6.60
d. $4.60
Multiple Choice
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:
WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000
What is the total cost per equivalent unit using the weighted-average method of process costing?
a. $3.00
b. $3.60
c. $6.60
d. $4.60
Click here for the SOLUTION
Abnormal spoilage totals
ACCOUNTING
Multiple Choice
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:
WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000
Abnormal spoilage totals
a. 1,600 units.
b. 2,000 units.
c. 1,680 units.
d. 1,920 units.
Multiple Choice
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:
WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000
Abnormal spoilage totals
a. 1,600 units.
b. 2,000 units.
c. 1,680 units.
d. 1,920 units.
Click here for the SOLUTION
Normal spoilage totals
ACCOUNTING
Multiple Choice
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:
WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000
Normal spoilage totals
a. 1,600 units.
b. 2,000 units.
c. 1,920 units.
d. 2,700 units
Multiple Choice
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:
WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000
Normal spoilage totals
a. 1,600 units.
b. 2,000 units.
c. 1,920 units.
d. 2,700 units
Click here for the SOLUTION
What is the number of total spoiled units
ACCOUNTING
Multiple Choice
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:
WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000
What is the number of total spoiled units?
a. 1,600 units
b. 2,000 units
c. 2,700 units
d. 3,600 units
Multiple Choice
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3 are as follows:
WIP, beginning inventory 12/1/20x3 10,000 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000
What is the number of total spoiled units?
a. 1,600 units
b. 2,000 units
c. 2,700 units
d. 3,600 units
Click here for the SOLUTION
Spoilage costs allocated to ending work in process are larger by which method and by how much
ACCOUNTING
Multiple Choice
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
Spoilage costs allocated to ending work in process are larger by which method and by how much?
a. When spoiled units are recognized by $2,500
b. When spoiled units are recognized by $4,250
c. When spoiled units are ignored by $7,500
d. When spoiled units are recognized by $7,500
Multiple Choice
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
Spoilage costs allocated to ending work in process are larger by which method and by how much?
a. When spoiled units are recognized by $2,500
b. When spoiled units are recognized by $4,250
c. When spoiled units are ignored by $7,500
d. When spoiled units are recognized by $7,500
Click here for the SOLUTION
What are the amounts allocated to the work-in-process ending inventory assuming spoilage units are recognized and ignored, respectively
ACCOUNTING
Multiple Choice
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
What are the amounts allocated to the work-in-process ending inventory assuming spoilage units are recognized and ignored, respectively?
a. $20,000; $24,500
b. $30,000; $34,250
c. $12,500; $20,000
d. $37,500; $40,000
Multiple Choice
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
What are the amounts allocated to the work-in-process ending inventory assuming spoilage units are recognized and ignored, respectively?
a. $20,000; $24,500
b. $30,000; $34,250
c. $12,500; $20,000
d. $37,500; $40,000
Click here for the SOLUTION
What is the cost transferred out assuming spoilage units are ignored
ACCOUNTING
Multiple Choice
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
What is the cost transferred out assuming spoilage units are ignored?
a. $87,500
b. $80,000
c. $50,000
d. $77,500
Multiple Choice
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
What is the cost transferred out assuming spoilage units are ignored?
a. $87,500
b. $80,000
c. $50,000
d. $77,500
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What is the direct material cost assigned to good units completed when spoilage units are recognized
ACCOUNTING
Multiple Choice
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
What is the direct material cost assigned to good units completed when spoilage units are recognized?
a. $50,000
b. $100,000
c. $80,000
d. $87,500
Multiple Choice
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
What is the direct material cost assigned to good units completed when spoilage units are recognized?
a. $50,000
b. $100,000
c. $80,000
d. $87,500
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What are the respective direct material costs per equivalent unit, assuming spoiled units are recognized or ignored
ACCOUNTING
Multiple Choice
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
What are the respective direct material costs per equivalent unit, assuming spoiled units are recognized or ignored?
a. $20.00; $35.00
b. $25.00; $40.00
c. $30.00; $45.00
d. $35.00; $50.00
Multiple Choice
Astoria Computer Systems, Inc., manufactures printers. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials purchases totaled $100,000 during the month. Work-in-process records revealed that 4,000 cards were started in January, 2,000 cards were complete, and 1,500 units were spoiled as expected. Ending work-in-process units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete.
What are the respective direct material costs per equivalent unit, assuming spoiled units are recognized or ignored?
a. $20.00; $35.00
b. $25.00; $40.00
c. $30.00; $45.00
d. $35.00; $50.00
Click here for the SOLUTION
Recognition of spoiled units when computing output units
ACCOUNTING
Multiple Choice
Recognition of spoiled units when computing output units
a. highlights the costs of normal spoilage to management.
b. distorts the accounting data.
c. focuses management's attention on reducing spoilage.
d. results in both (a) and (c).
Multiple Choice
Recognition of spoiled units when computing output units
a. highlights the costs of normal spoilage to management.
b. distorts the accounting data.
c. focuses management's attention on reducing spoilage.
d. results in both (a) and (c).
Click here for the SOLUTION
Not counting spoiled units in the equivalent-unit calculation results in
ACCOUNTING
Multiple Choice
Not counting spoiled units in the equivalent-unit calculation results in
a. lower cost per good unit.
b. higher cost per good unit.
c. better management information.
d. both (a) and (c).
Multiple Choice
Not counting spoiled units in the equivalent-unit calculation results in
a. lower cost per good unit.
b. higher cost per good unit.
c. better management information.
d. both (a) and (c).
Click here for the SOLUTION
Which one of the following conditions usually exists when comparing normal and abnormal spoilage to controllability
ACCOUNTING
Multiple Choice
Which one of the following conditions usually exists when comparing normal and abnormal spoilage to controllability?
Normal Spoilage Abnormal Spoilage
a. Controllable Controllable
b. Controllable Uncontrollable
c. Uncontrollable Uncontrollable
d. Uncontrollable Controllable
Multiple Choice
Which one of the following conditions usually exists when comparing normal and abnormal spoilage to controllability?
Normal Spoilage Abnormal Spoilage
a. Controllable Controllable
b. Controllable Uncontrollable
c. Uncontrollable Uncontrollable
d. Uncontrollable Controllable
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Companies that attempt to achieve zero defects in the manufacturing process treat spoilage as
ACCOUNTING
Multiple Choice
Companies that attempt to achieve zero defects in the manufacturing process treat spoilage as
a. scrap
b. reworked units
c. abnormal spoilage
d. normal spoilage
Multiple Choice
Companies that attempt to achieve zero defects in the manufacturing process treat spoilage as
a. scrap
b. reworked units
c. abnormal spoilage
d. normal spoilage
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Normal spoilage should be computed using as the base
ACCOUNTING
Multiple Choice
Normal spoilage should be computed using as the base
a. total units completed.
b. total good units completed.
c. total actual units started into production.
d. none of the above.
Multiple Choice
Normal spoilage should be computed using as the base
a. total units completed.
b. total good units completed.
c. total actual units started into production.
d. none of the above.
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The loss from abnormal spoilage account would not appear
ACCOUNTING
Multiple Choice
The loss from abnormal spoilage account would not appear
a. on the balance sheet.
b. as a detailed item in the retained earnings schedule of the balance sheet.
c. as a detailed item on the income statement.
d. on either (a) or (b).
Multiple Choice
The loss from abnormal spoilage account would not appear
a. on the balance sheet.
b. as a detailed item in the retained earnings schedule of the balance sheet.
c. as a detailed item on the income statement.
d. on either (a) or (b).
Click here for the SOLUTION
Wednesday, December 5, 2012
Costs of abnormal spoilage are usually accounted for as
ACCOUNTING
Multiple Choice
Costs of abnormal spoilage are usually accounted for as
a. part of the cost of goods sold.
b. part of the cost of goods manufactured.
c. a separate line item in the income statement.
d. an asset in the balance sheet.
Multiple Choice
Costs of abnormal spoilage are usually accounted for as
a. part of the cost of goods sold.
b. part of the cost of goods manufactured.
c. a separate line item in the income statement.
d. an asset in the balance sheet.
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Costs of normal spoilage are usually accounted for as
ACCOUNTING
Multiple Choice
Costs of normal spoilage are usually accounted for as
a. part of the cost of goods sold.
b. part of the cost of goods manufactured.
c. a separate line item in the income statement.
d. an asset in the balance sheet.
Multiple Choice
Costs of normal spoilage are usually accounted for as
a. part of the cost of goods sold.
b. part of the cost of goods manufactured.
c. a separate line item in the income statement.
d. an asset in the balance sheet.
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Spoilage that should not arise under efficient operating conditions is referred to as
ACCOUNTING
Multiple Choice
Spoilage that should not arise under efficient operating conditions is referred to as
a. ordinary spoilage.
b. normal spoilage.
c. abnormal spoilage.
d. there is no special term for this type of spoilage
Multiple Choice
Spoilage that should not arise under efficient operating conditions is referred to as
a. ordinary spoilage.
b. normal spoilage.
c. abnormal spoilage.
d. there is no special term for this type of spoilage
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Spoilage that is an inherent result of the particular production process and arises under efficient operating conditions is referred to as
ACCOUNTING
Multiple Choice
Spoilage that is an inherent result of the particular production process and arises under efficient operating conditions is referred to as
a. ordinary spoilage.
b. normal spoilage.
c. abnormal spoilage.
d. there is no special term for this type of spoilage
Multiple Choice
Spoilage that is an inherent result of the particular production process and arises under efficient operating conditions is referred to as
a. ordinary spoilage.
b. normal spoilage.
c. abnormal spoilage.
d. there is no special term for this type of spoilage
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A production process which involves spoilage and rework occurs in
ACCOUNTING
Multiple Choice
A production process which involves spoilage and rework occurs in
a. the manufacture of high precision tools.
b. semiconductor units.
c. the manufacture of clothing.
d. all of the above involve spoilage and rework
Multiple Choice
A production process which involves spoilage and rework occurs in
a. the manufacture of high precision tools.
b. semiconductor units.
c. the manufacture of clothing.
d. all of the above involve spoilage and rework
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Material left over when making a product is referred to as
ACCOUNTING
Multiple Choice
Material left over when making a product is referred to as
a. reworked units
b. spoilage
c. scrap
d. defective units
Multiple Choice
Material left over when making a product is referred to as
a. reworked units
b. spoilage
c. scrap
d. defective units
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Costs of poor quality production include
ACCOUNTING
Multiple Choice
Costs of poor quality production include
a. the opportunity cost of the plant and workers
b. the effect on current customers
c. the effect on potential customers
d. all of the above are costs of poor quality production
Multiple Choice
Costs of poor quality production include
a. the opportunity cost of the plant and workers
b. the effect on current customers
c. the effect on potential customers
d. all of the above are costs of poor quality production
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Unacceptable units of production that are subsequently repaired and sold as acceptable finished goods are
ACCOUNTING
Multiple Choice
Unacceptable units of production that are subsequently repaired and sold as acceptable finished goods are
a. reworked units
b. spoilage
c. scrap
d. defective units
Multiple Choice
Unacceptable units of production that are subsequently repaired and sold as acceptable finished goods are
a. reworked units
b. spoilage
c. scrap
d. defective units
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Unacceptable units of production that are discarded or are sold for reduced prices are referred to as
ACCOUNTING
Multiple Choice
Unacceptable units of production that are discarded or are sold for reduced prices are referred to as
a. reworked units
b. spoilage
c. scrap
d. defective units
Multiple Choice
Unacceptable units of production that are discarded or are sold for reduced prices are referred to as
a. reworked units
b. spoilage
c. scrap
d. defective units
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Managers often cite reductions in the costs of spoilage as a(n)
ACCOUNTING
Multiple Choice
Managers often cite reductions in the costs of spoilage as a(n)
a. major justification for implementing a just-in-time production system.
b. measurement of improved output quality.
c. immaterial item that is not to be tracked.
d. indication of improvement in the accounting system
Multiple Choice
Managers often cite reductions in the costs of spoilage as a(n)
a. major justification for implementing a just-in-time production system.
b. measurement of improved output quality.
c. immaterial item that is not to be tracked.
d. indication of improvement in the accounting system
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Many companies track scrap only in nonfinancial terms (liters, for example) and record its sale as another revenue item
ACCOUNTING
True or False
Many companies track scrap only in nonfinancial terms (liters, for example) and record its sale as another revenue item
True or False
Many companies track scrap only in nonfinancial terms (liters, for example) and record its sale as another revenue item
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If scrap is returned to the company's storeroom and thus inventoried, it should not have any value in the accounting records
ACCOUNTING
True or False
If scrap is returned to the company's storeroom and thus inventoried, it should not have any value in the accounting records
True or False
If scrap is returned to the company's storeroom and thus inventoried, it should not have any value in the accounting records
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Scrap is usually divided between normal and abnormal scrap
ACCOUNTING
True or False
Scrap is usually divided between normal and abnormal scrapr all jobs
True or False
Scrap is usually divided between normal and abnormal scrapr all jobs
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When rework is normal and not attributable to any specific job, the costs of rework are charged to manufacturing overhead, and spread through overhead allocation over all jobs
ACCOUNTING
True or False
When rework is normal and not attributable to any specific job, the costs of rework are charged to manufacturing overhead, and spread through overhead allocation over all jobs
True or False
When rework is normal and not attributable to any specific job, the costs of rework are charged to manufacturing overhead, and spread through overhead allocation over all jobs
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In both job costing and process costing, normal spoilage attributable to a specific job is assigned to that job
ACCOUNTING
True or False
In both job costing and process costing, normal spoilage attributable to a specific job is assigned to that job
True or False
In both job costing and process costing, normal spoilage attributable to a specific job is assigned to that job
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In job costing, costs of abnormal spoilage are not considered as inventoriable costs and are therefore written off as costs of the period in which detection occurs
ACCOUNTING
True or False
In job costing, costs of abnormal spoilage are not considered as inventoriable costs and are therefore written off as costs of the period in which detection occurs
True or False
In job costing, costs of abnormal spoilage are not considered as inventoriable costs and are therefore written off as costs of the period in which detection occurs
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Costs of abnormal spoilage are separately accounted for as losses of the period
ACCOUNTING
True or False
Costs of abnormal spoilage are separately accounted for as losses of the period
True or False
Costs of abnormal spoilage are separately accounted for as losses of the period
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Normal spoilage costs are usually deducted from the costs of good units
ACCOUNTING
True or False
Normal spoilage costs are usually deducted from the costs of good units
True or False
Normal spoilage costs are usually deducted from the costs of good units
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When spoiled goods have a disposal value, the net cost of spoilage is computed by adding the disposal value to the costs of the spoiled goods accumulated to the inspection point
ACCOUNTING
True or False
When spoiled goods have a disposal value, the net cost of spoilage is computed by adding the disposal value to the costs of the spoiled goods accumulated to the inspection point
True or False
When spoiled goods have a disposal value, the net cost of spoilage is computed by adding the disposal value to the costs of the spoiled goods accumulated to the inspection point
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Under the FIFO method, all spoilage costs are assumed to be related to units completed during this period using the unit costs of the current period
ACCOUNTING
True or False
Under the FIFO method, all spoilage costs are assumed to be related to units completed during this period using the unit costs of the current period
True or False
Under the FIFO method, all spoilage costs are assumed to be related to units completed during this period using the unit costs of the current period
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Under the weighted-average method, the costs of normal spoilage are added to the costs of their related good units
ACCOUNTING
True or False
Under the weighted-average method, the costs of normal spoilage are added to the costs of their related good units. Hence, the cost per good unit completed and transferred out equals the total costs transferred out divided by the number of good units produced
True or False
Under the weighted-average method, the costs of normal spoilage are added to the costs of their related good units. Hence, the cost per good unit completed and transferred out equals the total costs transferred out divided by the number of good units produced
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Costs in beginning inventory are pooled with costs in the current period when determining the costs of good units under the weighted-average method of process costing
ACCOUNTING
True or False
Costs in beginning inventory are pooled with costs in the current period when determining the costs of good units under the weighted-average method of process costing
True or False
Costs in beginning inventory are pooled with costs in the current period when determining the costs of good units under the weighted-average method of process costing
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Counting spoiled units as part of output units in a process-costing system usually results in a higher cost per unit
ACCOUNTING
True or False
Counting spoiled units as part of output units in a process-costing system usually results in a higher cost per unit
True or False
Counting spoiled units as part of output units in a process-costing system usually results in a higher cost per unit
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A company whose goal is zero defects would usually treat all spoilage as abnormal
ACCOUNTING
True or False
A company whose goal is zero defects would usually treat all spoilage as abnormal
True or False
A company whose goal is zero defects would usually treat all spoilage as abnormal
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Abnormal spoilage is spoilage that should arise under efficient operating conditions
ACCOUNTING
True or False
Abnormal spoilage is spoilage that should arise under efficient operating conditions
True or False
Abnormal spoilage is spoilage that should arise under efficient operating conditions
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When calculating normal spoilage rates, the base should be actual units started in production
ACCOUNTING
True or False
When calculating normal spoilage rates, the base should be actual units started in production
True or False
When calculating normal spoilage rates, the base should be actual units started in production
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