Question

Balley, Inc. produces three milk products (all are main products) from a joint process costing $200,000. Data from the current period’s operation follow:
                Units                  Sales Price                    Separable         Total Revenue After
                  Produced             at Split-Off                   Costs         further Processing
Regular            5,000                       $5                   $10,000            $ 40,000
Fat-free          15,000                          7                         16,000            120,000
2%                    30,000                          8                         5,000               250,000

Which product(s) should be processed beyond the split-off point?

Group of answer choices

all of the products

Fat-free only

Regular and 2% only

Regular and Fat-free only

2% only

In the single rate method used in the support division cost allocation, when budgeted cost-allocations rate is used:

Group of answer choices:

the manager of the supplier/support division bears the risk of unfavorable cost variances

user/operating divisions pay for inefficiencies of the supplier/support department

variations in actual usage by one operating division affect the costs allocated to other operating divisions

user/operating divisions pay for costs that exceed budgeted amounts

The Caterpillar Company manufactures small garden tractors on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each tractor must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Caterpillar uses FIFO.

Data for the Assembly Department for April 2008 are:
       Work in process, beginning inventory:                                              400 units
              Direct materials (100% complete)
              Conversion costs (40% complete)
       Units started during April                                                               1,200 units
       Work in process, ending inventory:                                                   250 units
              Direct materials (100% complete)
              Conversion costs (80% complete)

Costs for April 2008:
       Work in process, beginning inventory:
              Direct materials                                                                          $100,000
              Conversion costs                                                                         $300,000
       Direct materials costs added during April                                         $700,000
       Conversion costs added during April                                             $1,250,000
What is the total equivalent units of conversion costs in FIFO?

Group of answer choices

1,190

1,390

1,600

1,350

None of the choices

Answer 1