Short Questions With 1 MCQ: No Big Deal, Read First

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

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 multiple-choice question (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 task involves applying process costing methods to specific inventory and production data within Jones Corporation's packaging department, as well as solving an MCQ related to FIFO inventory costing. This paper details the calculations for part (a), (b), and (c), while also analyzing the multiple-choice question based on FIFO method and beginning inventory costs.

Introduction

Process costing is essential for companies like Jones Corporation that produce homogeneous products through continuous processes. The methodology involves calculating equivalent units, unit costs, and inventory valuations, which are crucial for accurate financial reporting and cost control. This paper addresses the computations required in the given scenario, employing the average cost method for inventory valuation, along with a FIFO-based MCQ analysis for department G.

Part A: Calculation of Cost per Equivalent Unit

Jones Corporation's costs include transferred-in costs, materials, and conversion costs. The first step involves computing the total equivalent units for each cost category:

• Beginning inventory: 8,000 units at various completion stages.
• Units transferred in during August: 125,000 units.
• Units transferred out: 131,000 units.
• Ending inventory: 2,000 units at partial completion.

Using the average cost method, total costs for each category are summed with beginning inventory and costs incurred during August. The equivalent units are computed based on the degree of completion for ending inventory and beginning inventory's work done in prior periods.

Transferring costs, materials, and conversion costs are then divided by the respective equivalent units to find the unit costs:

• Transferred-in costs: ($62,000 + $1,418,560) / total equivalent units.
• Materials: ($28,775 + $799,225) / total equivalent units.
• Conversion costs: ($8,750 + $498,010) / total equivalent units.

Calculations result in specific unit costs, which are rounded to two decimal places as required.

Part B: Cost of Units Transferred Out

The units transferred out (131,000 units) are valued using the calculated per-unit costs. The total cost of units transferred out is the product of the units and the respective unit costs for transferred-in costs, materials, and conversion costs, summed appropriately.

Part C: Cost of Ending Inventory

The ending inventory comprises 2,000 units at partial completion. Using the computed unit costs, the cost of ending inventory includes the proportionate costs of transferred-in, materials, and conversion costs, based on the degree of completion (50% for materials and 20% for conversion). The total ending inventory cost is obtained by multiplying the equivalent units of ending inventory by their respective unit costs.

Analysis of the MCQ (FIFO method and beginning inventory costs)

For the MCQ, the focus is on FIFO inventory costing, which assumes that the earliest inventory units are sold or completed first. The question gives details about beginning inventory and units completed, requiring the calculation of total costs of the beginning inventory units completed during the period.

The calculation involves determining the costs of the 3,600 units from beginning inventory that were completed during the period, considering their initial cost per unit based on FIFO assumptions. The options provided require precise unit cost computations rounded to four decimal places, aligning with FIFO methodology.

Conclusion

This comprehensive analysis demonstrates the application of process costing techniques, including average cost calculations for inventory valuation and FIFO-specific computations for beginning inventory costs. Accurately applying these methods provides vital insights into manufacturing costs, stock valuation, and financial performance for Jones Corporation and similar manufacturing entities.

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