Assembly department of Zahra Technologies had 200 units as work in process at the beginning of the
Question:
Assembly department of Zahra Technologies had 200 units as work in process at the beginning of the month. These units were 45% complete. It has 300 units which are 35% complete at the end of the month. During the month, it completed and transferred 500 units. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Zahra uses weighted-average process-costing method. Calculate the total equivalent units in ending inventory for assignment of conversion costs?
A. 300 units
B.195 units
C.200 units
D.105 units
2. LaCrosse Products has a budget of $900,000 in 2017 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $81,000 in variable costs. The new method will require $41,000 in training costs and $109,000 in annual equipment costs. Management is willing to adjust the budget for an amount up to the cost of the new equipment. The budgeted production level is 155,000 units.
Appraisal costs for the year are budgeted at $600,000. The new prevention procedures will save appraisal costs of $50,200. Internal failure costs average $18 per failed unit of finished goods. The internal failure rate is expected to be 2% of all completed items. The proposed changes will cut the internal failure rate by one-third. Internal failure units are destroyed. External failure costs average $50 per failed unit. The company's average external failures average 2% of units sold. The new proposal will reduce this rate by 45%. Assume all units produced are sold and there are no ending inventories.
What is the net change in the budget for prevention costs if the procedures are automated in 2017? Will management agree with the changes?
A.$150,000 increase, no
B.$69,000 decrease, yes
C.$81,000 decrease, yes
D.$69,000 increase, yes
3 Bismite Corporation purchases trees from Cheney lumber and processes them up to the split-off point where two products (paper and pencil casings) emerge. The products are then sold to an independent company that markets and distributes them to retail outlets. The following information was collected for the month ofOctober:
Trees processed: | 350 | trees | |
Production: | paper | 150,000 | sheets |
pencil casings | 150,000 | ||
Sales: | paper | 144,000 | at $0.10 per page |
pencil casings | 147,000 | at $0.15 per casing |
The cost of purchasing 350 trees and processing them up to the split-off point to yield 150,000 sheets of paper and 150,000 pencil casings is $15,500.
Bismite's accounting department reported no beginning inventory.
If the sales value at split-off method is used, what is the approximate production cost for each paper sheet? (Round intermediary percentages to the nearesthundredth.)
A.$0.062
B.$0.043
C.$0.041
D.$0.065
Managerial Accounting
ISBN: 978-1337270595
14th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac