All questions have to do with cost accounting systems, more in particular, proce
ID: 2419745 • Letter: A
Question
All questions have to do with cost accounting systems, more in particular, process cost systems.
Complete each of the following statements by writing the appropriate words or amounts in the answers blanks.
8–9. Oslo Manufacturing incurred $72,000 of direct materials costs, direct labor costs of $24,500, and factory overhead of $20,500. If 1,000 direct materials equivalent units and 900 conversion equivalent units were manufactured, then:
8. The equivalent unit cost for direct materials is 8. $____
9. The equivalent unit cost for conversion is 9. $____
10. The periodic report prepared for each processing department, summarizing (1) the units for which the department is responsible and their disposition and (2) the costs charged the department and their allocation, is termed the 10. ____
11. The method of inventory costing that assumes the unit product costs should be determined separately for each period in the order in which the costs were incurred is 11. ____
12–15. In a process cost system, the cost of goods completed and the ending inventory valuation are determined by using the following four steps:
12. ____
13. ____
14. ____
15. ____
Explanation / Answer
8 Equivalent unit cost for direct material Total Direct Material Costs/ Equivalent Material Units 72000/1000 72 Equivalent unit cost for direct material is $ 72 per unit 9 Equivalent unit cost for conversion Total conversion Costs/ Equivalent conversion Units 24500+20500/900 50 Equivalent unit cost for direct material is $ 50 per unit 10 Cost of Production Report 11 The method of inventory costing that assumes the unit product costs should be determined separately for each period in the order in which the costs were incurred is First In First Out Method In this method the inventories purchased first are sold out first