Question

1. Please Answer the following segments of the unit review question.

A. Department M had 2,600 units 58% completed in process at the beginning of June, 13,600 units completed during June, and 900 units 35% completed at the end of June. What was the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories?

-.11,000 units

-.12,407 units

-.14,815 units

-.13,915 units

B. Which of the following is the correct flow of manufacturing costs?

-.raw materials, finished goods, cost of goods sold, work in process

-.raw materials, work in process, finished goods, cost of goods sold

-.cost of goods sold, raw materials, work in process, finished goods

-.work in process, finished goods, raw materials, cost of goods sold

C. At the end of the year, overhead applied was $42,000,000. Actual overhead was $40,300,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to

-.decrease by $1,700,000

-.increase by $1,700,000

-.decrease by $3,400,000

-.increase by $3,400,000

Answer 1

1. Please Answer the following segments of the unit review question.

A. Department M had 2,600 units 58% completed in process at the beginning of June, 13,600 units completed during June, and 900 units 35% completed at the end of June. What was the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories?

-.11,000 units

-.12,407 units

-.14,815 units

-.13,915 units

Ans is B $12,407 units

Explanation: Beginning WIP – 2600 x 42% = 1092

Started and completed in June – 11000 x 100% = 11000

Ending WIP – 900 x 35% = 315

Equivalent Units = 12407 units

B. Which of the following is the correct flow of manufacturing costs?

-.raw materials, finished goods, cost of goods sold, work in process

-.raw materials, work in process, finished goods, cost of goods sold

-.cost of goods sold, raw materials, work in process, finished goods

-.work in process, finished goods, raw materials, cost of goods sold

Ans is B raw materials, work in process, finished goods, cost of goods sold

Explanation: First raw material is purchased and applied to production, which becomes WIP and then converted to Finished Goods, which finally becomes cost of goods sold.

C. At the end of the year, overhead applied was $42,000,000. Actual overhead was $40,300,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to

-.decrease by $1,700,000

-.increase by $1,700,000

-.decrease by $3,400,000

-.increase by $3,400,000

Ans is B Increase by $1,700,000

Explanation: Overhead applied less actual overhead, if positive then its overapplied

So overhead overapplied is 42000000-40300000 = 1700000

Overhead Dr $1700000

To Cost of goods sold 1700000

So , if cost is decreased then net income would increase by $1700000