ACCT 521 Connect Plus Homework 4 Solution (Liberty University)

1. Clean Corporation manufactures liquid window cleaner.

Missouri Corporation shows the following information concerning the work in process at its plant:

Bears, Inc., adds materials at the beginning of the process in Department MO.

 The following information on physical units for Department MO for the month of July is available:

The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories.

 The accounting records show the following information for a particular day:

Adams Company's production cycle starts in Department A.

 The following information is available for July:

Department B is the second stage of Boswell Corporation's production cycle. 

 On November 1, beginning work in process contained 105,000 units, which were 20 percent complete as to conversion costs.

 During November, 635,000 units were transferred in from the first stage of the production cycle. 

 On November 30, ending work in process contained 85,000 units, which were 65 percent complete as to conversion costs.

 Materials are added at the end of the process.

 Using the weighted-average method, what are the equivalent units of production for prior department costs, materials, and conversion costs for the month of November, respectively?

Department C is the first stage of Cohen Corporation's production cycle.

 The following equivalent unit information is available for conversion costs for the month of September:

Munoz Sporting Equipment manufactures baseball bats and tennis rackets.

 Department B produces the baseball bats, and Department T produces the tennis rackets. 

 Munoz currently uses plantwide allocation to allocate its overhead to all products.

 Direct labor cost is the allocation base. 

 The rate used is 100 percent of direct labor cost.

 Last year, revenue, materials, and direct labor were as follows:

Rodent Corporation produces two types of computer mice, wired and wireless.

 The wired mice are designed as low-cost, reliable input devices. 

 The company only recently began producing the higher-quality wireless model. 

 Since the introduction of the new product, profits have been steadily declining. 

 Management believes that the accounting system is not accurately allocating costs to products, particularly because sales of the new product have been increasing.

 Management has asked you to investigate the cost allocation problem. 

 You find that manufacturing overhead is currently assigned to products based on their direct labor costs.

 For your investigation, you have data from last year. 

 Manufacturing overhead was $1,258,000 based on production of 350,000 wired mice and 94,000 wireless mice.

 Direct labor and direct materials costs were as follows:

The Personnel Department at LastCall Enterprises handles many administrative tasks for the two divisions that make up LastCall: LaidBack and StressedOut. 

 LaidBack division manages the company’s traditional business line. 

 This business, although lucrative, is currently not growing. 

 StressedOut, on the other hand, is the company’s new business, which has experienced double-digit growth for each of the last three years.

 The cost allocation system at LastCall allocates all corporate costs to the divisions based on a variety of cost allocation bases. Personnel costs are allocated based on the average number of employees in the two divisions.  

 There are two basic activities in the Personnel Department.

 The first, which is called employee maintenance, manages employee records. 

 Virtually all of this activity occurs when employees are hired or leave the company.

 The other activity is payroll, which is an ongoing activity and requires the same amount of work for each employee regardless of the employee’s salary. 

 Assorted data for LastCall for the last year follow:

EZ-Seat, Inc., manufactures two types of reclining chairs, Standard and Ergo. 

 Ergo provides support for the body through a complex set of sensors and requires great care in manufacturing to avoid damage to the material and frame.

 Standard is a conventional recliner, uses standard materials, and is simpler to manufacture.

 EZ-Seat's results for the last fiscal year are shown in the following statement.

Huron Furniture is considering updating its cost system to an activity-based costing system and is interested in understanding the effects.

 The company's cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool.