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Question: Elijah Inc. produces accent stripes for automobiles

Elijah Inc. produces accent stripes for automobiles in 50-inch rolls. Each roll passes through three departments (Striping, Adhesion, and Packaging) before it is ready for shipment to customers. Product costs are tracked by department and assigned using a process costing system. Overhead is applied to production in each department at a rate of 80 percent of the department’s direct labor cost. The following T-account information pertains to departmental operations for June 2010:
Elijah Inc. produces accent stripes for automobiles in 50-inch rolls. Each roll passes through three departments (Striping, Adhesion, and Packaging) before it is ready for shipment to customers. Product costs are tracked by department and assigned using a process costing system. Overhead is applied to production in each department at a rate of 80 percent of the department’s direct labor cost.
The following T-account information pertains to departmental operations for June
2010:
a. What was the cost of goods transferred from the Striping Department to the Adhesion Department for the month?
b. How much direct labor cost was incurred in the Adhesion Department? How much overhead was assigned to production in the Adhesion Department for the month?
c. How much direct material cost was charged to products in the Packaging Department?
d. Prepare the journal entries for all interdepartmental transfers of products and the cost of the units sold during June 2010.

a. What was the cost of goods transferred from the Striping Department to the Adhesion Department for the month? b. How much direct labor cost was incurred in the Adhesion Department? How much overhead was assigned to production in the Adhesion Department for the month? c. How much direct material cost was charged to products in the Packaging Department? d. Prepare the journal entries for all interdepartmental transfers of products and the cost of the units sold during June 2010.





Transcribed Image Text:

Work in Process-Striping Work in Process-Adhesion Beginning 20,000 Beginning 70,000 DM 90,000 Transferred in ? DL 80,000 ? DM 22,600 ? 480,000 Overhead DL ? Overhead Ending 17,000 Ending 20,600 Work in Process-Packaging Finished Goods Beginning 150,000 Beginning 185,000 Transferred in ? TI 880,000 ? 720,000 DM ? CGM DL Overhead 90,000 Ending Ending 40,000



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> Refer to the information in Exercise 22 for Wyoming Wholesale. a. Using the least squares method, develop the equation for predicting weekly receiving report costs based on the number of shipments received. b. What is the predicted amount of receiving re

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> Itzgood makes a variety of healthy snack foods. The following information for January 2010 relates to a trail mix. Materials are added at the beginning of processing; overhead is applied based on direct labor. The mix is transferred to a second departmen

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> Spangenberg Products manufactures computer cases. All material is added at the start of production and overhead is applied to each product at the rate of 70 percent of direct labor cost. At the beginning of July, there were no units in the Finished Goods

> Ro-Day-O Inc. manufactures belt buckles in a single-step production process. The following information is available for June 2010: Beginning inventory units were 100 percent complete as to material and 80 percent complete as to labor. The ending inventor

> Use the LaToya Company data given in Problem 20. However, assume that the spoiled goods were detected when conversion was 30 percent complete. Prepare a May 2010 cost of production report using the FIFO method. The cost of normal spoilage is attached to

> LaToya Company produces door pulls, which are inspected at the end of production. Spoilage may occur because the door pull is improperly stamped or molded. Any spoilage in excess of 3 percent of the completed good units is considered abnormal. Direct mat

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> Turkburg produces frozen turkey patties. In the Forming Department, ground turkey is formed into patties and cooked; an acceptable shrinkage loss for this department is 1 percent of the pounds started. The patties are then transferred to the Finishing De

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> Donbrowski Co. manufactures reflective lenses and uses a standard process costing system. For May 2010, the following data are available: Standard Cost of 1 Unit Standard Cost of 1 Unit Direct material ……………………………………………………………………………….$ 5.50 Conversion ………

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> Assume that Trevano Corp. in Exercise 15 uses the FIFO method of process costing. a. What proportion of work needs to be performed on the beginning inventory units to complete them? b. What are the equivalent units of production for direct material? c. W

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> Use the information in Exercise 27 except assume that BeGone uses FIFO process costing. Prepare a schedule showing the BeGone August 2010 computation of FIFO equivalent units of production and cost per equivalent unit. Data given in Exercise 27: BeGone

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> In choosing a product costing system, what are the two choices available for a cost accumulation system? How do these systems differ?

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> If normal spoilage is generally anticipated to occur on all jobs, how should the cost of that spoilage be treated?

> Grand Island Brake Co. budgeted the following variable and fixed overhead costs for 2010: Variable indirect labor …………………………………………$100,000 Variable indirect materials ………………………………………20,000 Variable utilities ………………………………………………………80,000 Variable portion o

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> In using standard costing in a job order costing system, are standards established for material and labor costs and quantities?

> In a job order costing system, what key documents support the cost accumulation process and what is the purpose of each?

> Production data for the first week in November 2010 for Florida Fabricators were as follows: Finished Goods Inventory, Nov. 1: $23,800 Finished Goods Inventory, Nov. 5: $0 Direct labor hours worked in the first week of November were 680 at a cost of $15

> Stockman Co. began 2010 with three jobs in process: During 2010, the following transactions occurred: 1. The firm purchased and paid for $542,000 of raw material. 2. Factory payroll records revealed the following: • Indirect labor incur

> Ialani Corp. uses a job order costing system for the yachts it constructs. On September 1, 2010, the company had the following account balances: Raw Material Inventory …………………………………$ 332,400 Work in Process Inventory ………………………………1,512,600 Cost of Goods S

> Polaski Inc. uses an actual cost, job order system. The following transactions are for August 2010. At the beginning of the month, Direct Material Inventory was $2,000, Work in Process Inventory was $10,500, and Finished Goods Inventory was $6,500. • Dir

> Summer Shade installs awnings on residential and commercial structures. The company had the following transactions for February 2010: • Purchased $790,000 of building (raw) material on account. • Issued $570,000 of building (direct) material to jobs. • I

2.99

See Answer