Blog

Carson Wood Products processes logs into four grades of lumber totaling 500,000 board feet as follows at a joint cost of $300,000: Grade Board Feet Final Sales Value First and second  75,000 $ 56,250  No. 1 common 200,000 180,000 No. 2 common 100,000 105,000 No. 3 common 125,000 127,500 ​ What is the gross profit of No. 3 common if the constant gross margin percentage method is used?

Anzalone Corporation adds raw materials to production at the beginning of the process in the Assembly Department. Materials data for this department for May 2018 are as follows:   ​ Costs ​ Units Materials Conversion Work in process, May 1 25,000 $ 68,750 $167,650 Started during May 100,000 300,000 903,350 Work in process, May 31 10,000 ​ ​ Beginning inventory was 70 percent complete. Ending inventory was 40 percent complete. How many equivalent units for materials would there be for Anzalone Corporation in May using the FIFO method?

Alana Company manufactures books. Manufacturing a book takes 10 units of A1 and 1 unit of A2. Scheduled production of books for the next two months is 1,000 and 1,200 units, respectively. Beginning inventory is 4,000 units of A1 and 30 units of A2. The ending inventory of A1 is planned to decrease 500 units in each of the next two months, and the A2 inventory is expected to increase 5 units in each of the next two months. ​ Based on this information, the number of units of A1 that needs to be purchased by Alana during the first month is

A cost transferred from a prior process to a subsequent process is referred to as a:

All of the following are non-unit-based activity drivers EXCEPT

Intangibility refers to the

Astoria Savings & Loans of New York has three revenue-generating departments: Consumer accounts, Commercial accounts, and Loans. The bank also has three service areas: administration, personnel, and accounting. The direct costs per month and the interdepartmental service structure are shown below: ​ Percentage of Service Used by Dept. Costs Admin. Pers. Acctg. Consumer Comm’l Loans Administration $40,000 – 10 10 40 20 20 Personnel 23,000 10 – 10 20 40 20 Accounting 30,000 10 10 – 20 20 40 Consumer 41,000 ​ ​ ​ ​ ​ ​ Commercial 25,000 ​ ​ ​ ​ ​ ​ Loans 16,000 ​ ​ ​ ​ ​ ​ How much cost would be allocated to the Commercial account area from administration using the direct method?

Appleby Manufacturing uses an activity-based costing system. The company produces Model F and Model G. Information relating to the two products is as follows: ​ ​ Model F Model G Units produced 24,000 30,000 Machine hours 7,500 8,500 Direct labor hours 8,000 12,000 Material handling (number of moves) 4,000 6,000 Setups 5,000 7,000 Purchase orders 30 40 Inspections 10,000 14,000 Product line variations 8 12 ​ The following overhead costs are reported for the following activities of the production process: ​ Material handling $ 40,000 Labor-related overhead 120,000 Setups 60,000 Product design 100,000 Batch inspections 120,000 Central purchasing 70,000 ​ Jones manufacturing has used activity based costing to assign costs to Models F and G as given in the table below: ​ Activity Cost Pool Driver Pool Rate Model F Activity Model F Cost Model G Activity Model G Cost Total Material handling $40,000 10,000 $4 4,000 $16,000 6,000 $24,000 $40,000 Labor related overhead $120,000 20,000 $6 8,000 $48,000 12,000 $72,000 $120,000 Setups $60,000 12,000 $5 5,000 $25,000 7,000 $35,000 $60,000 Product design $100,000 20 $5,000 8 $40,000 12 $60,000 $100,000 Batch inspections $120,000 24,000 $5 10,000 $50,000 14,000 $70,000 $120,000 Central purchasing $70,000 70 $1,000 30 $30,000 40 $40,000 $70,000 total ​ ​ ​ ​ $209,000 ​ $301,000 $510,000 ​ Appleby Manufacturing wants to implement an approximately relevant ABC system by using the two most expensive activities for cost assignment. ​ Under this new approach using the new rates, what are the overhead costs assigned to Model G in this approximately relevant ABC system?

In a process-costing system, work-in-process inventory, materials are added uniformly so that multiple calculations of equivalent units are needed for each type of input.

Common costs are mutually beneficial costs, used in the output of two or more services or products.