1. As goods are transferred from a prior process to a subsequent process, the following entry to...
Question:
1. As goods are transferred from a prior process to a subsequent process, the following entry to record the cost of abnormal spoilage would be made:
a. debit Work in Process (subsequent department) and credit Work in Process (prior department)
b. debit Abnormal Spoilage Loss and credit Work in Process (prior department)
c. debit Finished Goods and credit Work in Process (prior department)
d. debit Finished Goods and credit Abnormal Loss
2. Proteger Company manufactures insect repellant lotion. The Mixing Department, the first process department, mixes the chemicals required for the repellant. The following data are for the current year:
Work in process, January 1……………………………..—
Gallons started…………………………………………….900,000
Gallons transferred out………………………………..756,000
Direct materials cost…………………………………..$900,000
Direct labor cost…………………………………..….$2,000,000
Overhead applied……………………………………$1,571,200
Direct materials are added at the beginning of the process. Ending inventory is 95 percent complete with respect to direct labor and overhead. The cost of goods transferred out for the year is:
a. $4,471,200
b. $3,571,200
c. $3,780,000
d. $3,024,000
Ending InventoryThe ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
Step by Step Answer:
Cornerstones of Cost Management
ISBN: 978-1305970663
4th edition
Authors: Don R. Hansen, Maryanne M. Mowen