Short Questions With 1 MCQ – No Big Deal, Just Read It

3 Short Questions With 1 Mcq No Big Deal 1st Read It Pr

(((3 SHORT QUESTIONS WITH 1 MCQ)))(( no big deal)) ((((( 1st READ IT PROPERLY AND THEN START THE WORK))))) On August 1, Jones Corporation's packaging department had Work in Process inventory of 8,000 units that were 75% complete with respect to materials and 30% complete with respect to conversion costs. The cost of these units was $99,525 ($62,000 transferred-in from previous departments, $28,775 in materials, and $8,750 in labor and overhead). During August, 125,000 units were transferred into the department. These units had accumulated costs in previous departments of $1,418,560. The packaging department incurred costs of $799,225 for materials and $498,010 for conversion costs in August and transferred 131,000 units out of the department. The 2,000 units remaining in ending inventory are 50% complete with respect to materials and 20% complete with respect to conversion costs. Jones Corporation uses the average cost method to cost its inventories. Required: a. Calculate the cost per equivalent unit for transferred-in costs, materials, and conversion costs. Round your answers to two decimal places. b. Calculate the cost of the units transferred out of the department. c. Calculate the cost of the ending inventory. THIS IS A MCQ: Department G had 3,600 units, 25% completed at the beginning of the period, 11,000 units were completed during the period, 3,000 units were one-fifth completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period: Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the total cost of 3,600 units of beginning inventory which were completed during the period (round unit cost calculations to four decimal places)? a. $40,000 b. $62,206 c. $16,163 d. $19,275

Paper For Above instruction

The scenario involves complex cost calculations related to inventory management for Jones Corporation and a multiple-choice question concerning inventory costing under FIFO. The core of the assignment is to compute unit costs, total costs of units transferred out, and ending inventory costs using the weighted-average method and FIFO assumptions, respectively. These calculations are fundamental in managerial accounting for assessing product costs and inventory valuation.

Introduction

Cost accounting is essential for providing insight into the expenditure involved in producing goods and managing inventories. Accurate cost analysis allows companies like Jones Corporation to price their products correctly, manage their resources effectively, and comply with accounting standards. This paper analyzes two main scenarios: the calculation of unit costs using the weighted-average method and the total cost of units using FIFO. Both are critical techniques in cost accounting, serving different managerial and external reporting needs.

Part 1: Calculation of Cost per Equivalent Unit

The first part involves determining the cost per equivalent unit for transferred-in costs, materials, and conversion costs for Jones Corporation’s packaging department. The start date indicates an opening work in process inventory of 8,000 units, with specific completion percentages for materials and conversion costs, which require the calculation of equivalent units to allocate costs accurately. Total costs incurred and transferred-in costs are given, along with units transferred in and out during August. Using these data, the weighted-average method combines beginning inventory costs with current period costs for calculating the cost per equivalent unit.

The total costs include transferred-in costs ($62,000 from previous departments plus costs incurred during August), materials costs ($28,775 plus additional materials purchased), and conversion costs ($8,750 in labor and overhead plus associated costs during the period). The calculation involves summing beginning inventory costs with current costs, then dividing by equivalent units to derive the unit costs. This process ensures costs are apportioned correctly between completed units and ending inventory.

Part 2: Cost of Units Transferred Out

Next, the analysis considers the total cost of units transferred out. The department transferred 131,000 units out during August. Using the previously calculated unit costs, the total transferred-out cost is obtained by multiplying the units transferred out by the unit costs for each category (transferred-in, materials, and conversion costs). This figure represents the cost of goods sold or moved to subsequent processes, vital for profitability analysis and inventory valuation.

Part 3: Cost of Ending Inventory

The final component focuses on calculating the cost of ending inventory, which comprises units remaining in process at month-end (2,000 units). These are partially complete, requiring the application of equivalent units based on the percentage of completion for materials (50%) and conversion costs (20%). The ending inventory cost is computed by multiplying the equivalent units by their respective unit costs, reflecting the current value ofwork-in-process stock for financial reporting and managerial decisions.

Part 4: FIFO Cost Calculation

The multiple-choice question examines FIFO inventory costing, where the focus is on the total cost of 3,600 units of beginning inventory completed during the period. Initially, FIFO assumes that prior period units are completed first, requiring accurate calculation of the costs associated with these units. The question details the beginning inventory units, their completion percentage, and the total manufacturing costs debited during the period.

Using FIFO, the costs of the beginning inventory units completed during the period are calculated based on their prior unit costs, which are determined by dividing the costs associated with their initial 25% completion. This method separates the costs of prior inventory from costs incurred during the current period for new units, providing precise inventory valuation and cost control.

Conclusion

The detailed calculations involved in both weighted-average and FIFO methods demonstrate the importance of accurate cost allocation in managerial accounting. These techniques facilitate informed decision-making, effective inventory management, and financial compliance. Understanding these processes allows companies to maintain competitive pricing and optimize resource allocation.

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