Test Bank Principles of Cost Accounting 14th Edition Vanderbeck

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\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 An established plan
of objectives and goals to be achieved.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain
\qj \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \aspalpha \aspnum \adjustright \lin0 \rin0
\langfe2052 \langfenp2052 \alang1025 {\trowd \trql \trgaph0 \trleft-45
\row }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0
\rin0 \intbl \itap1 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 b.}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Regular reports
showing the difference between goals and actual performance.}{\rtlch \fcs1 \af0
\afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025 \ltrch \dbch \af2 \hich
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1
\cell }\pard \plain \qj \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \aspalpha \aspnum
\adjustright \lin0 \rin0 \intbl \itap1 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21
\langnp1033 \langfe2052 \langfenp2052 \alang1025 {\trowd \trql \trgaph0 \trleft-
45 \trautofit1 \trftsWidth1 \trftsWidthB3 \trftsWidthA3 \trpaddl45 \trpaddr45
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 c.}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Specific assignment
of duties and responsibilities.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qj
\li0 \ri0 \lisb0 \lisa0 \nowidctlpar \aspalpha \aspnum \adjustright \lin0 \rin0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 d.}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 All of these are
correct.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qj \li0 \ri0 \lisb0 \lisa0
\nowidctlpar \aspalpha \aspnum \adjustright \lin0 \rin0 \intbl \itap1 \rtlch
\fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025 \ltrch \loch
\af4 \hich \af4 \dbch \af2 \lang1033 \langnp1033 \langfe2052 \langfenp2052
\alang1025 {\trowd \trql \trgaph0 \trleft-45 \trautofit1 \trftsWidth1 \trftsWidthB3
\trftsWidthA3 \trpaddl45 \trpaddr45 \trpaddfl3 \trpaddft3 \trpaddfb3 \trpaddfr3
\clvertalt \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone \clbrdrb
\brdrnone \cltxlrtb \clwWidth360 \clftsWidth3 \cellx315 \clvertalt \clbrdrl
\brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone \clbrdrb \brdrnone \cltxlrtb
\clwWidth8100 \clftsWidth3 \cellx8415 \row }\pard \plain \ql \li0 \ri0 \lisb0
\lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch
\fcs0 \fs21 \kerning2 \rtlch \alang1025 \ltrch \loch \af4 \hich \af4 \dbch \af2
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 {\rtlch \fcs1 \af0 \afs2
\ltrch \fcs0 \fs2 \kerning0 \rtlch \alang1025 \ltrch \dbch \af2 \hich \af4 \loch
\f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \par }\pard
\plain \ql \li0 \ri0 \lisb0 \sa1 \lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0
\langfenp2052 \alang1025 {\rtlch \fcs1 \af0 \afs12 \ltrch \fcs0 \fs12 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \par }\pard \plain \ql \li0 \ri0
\lisb0 \lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \tql \tx0 \tql \tx634 \tql \tx1958
\tql \tx2592 \tql \tx3916 \tql \tx4550 \tql \tx5874 \tql \tx6508 \itap0 \rtlch
\alang1025 {\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\ltrch \dbch \af2 \hich \af0 \loch \f0 \lang1033 \langnp1033 \langfe2052
\langfenp2052 \alang1025 \cf1 ANS:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \tab }{\rtlch \fcs1 \af0
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 D}
\alang1025 \cf1 \par }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1
\hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 An
effective cost control system should include an established plan of goals and
objectives, reports comparing budgeted goals to actual performance, and assignment
of specific duties and responsibilities to operating personnel.}{\rtlch \fcs1
\plain \ql \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \tql \tx0
\tql \tx634 \tql \tx1958 \tql \tx2592 \tql \tx3916 \tql \tx4550 \tql \tx5874
\tql \tx6508 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 PTS:}{\rtlch
\fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025 \ltrch \dbch
\af2 \hich \af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052
\alang1025 \cf1 \tab }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 1}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
DIF:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Easy}{\rtlch \fcs1 \af0
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \tab
}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025 \ltrch
\alang1025 \cf1 REF:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 P.}
\langfenp2052 \alang1025 \cf1 OBJ:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
Introduction}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \par }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0
\nowidctlpar \hyphpar0 \lin0 \rin0 \tql \tx0 \tql \tx634 \tql \tx1958 \tql
\tx2592 \tql \tx3916 \tql \tx4550 \tql \tx5874 \tql \tx6508 \itap0 \rtlch \fcs1
\alang1025 \cf1 NAT:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \tab }{\rtlch \fcs1 \af0 \afs22 \ltrch
\fcs0 \fs22 \kerning0 \rtlch \alang1025 \ltrch \dbch \af2 \hich \af0 \loch \f0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 IMA 1C - Internal
Controls}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 TOP:}{\rtlch \fcs1 \af0
\alang1025 \cf1 AACSB - Analytic}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The personnel involved in the
physical control of materials includes all of the following }{\rtlch \fcs1 \af0
\afs22 \ltrch \fcs0 \b1 \fs22 \kerning0 \rtlch \alang1025 \ltrch \dbch \af2
\cf1 except}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 the:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \par }\trowd \trql
\trgaph0 \trleft-45 \trautofit1 \trftsWidth1 \trftsWidthB3 \trftsWidthA3 \trpaddl45
\trpaddr45 \trpaddfl3 \trpaddft3 \trpaddfb3 \trpaddfr3 \clvertalt \clbrdrl
\clwWidth360 \clftsWidth3 \cellx315 \clvertalt \clbrdrl \brdrnone \clbrdrr
\brdrnone \clbrdrt \brdrnone \clbrdrb \brdrnone \cltxlrtb \clwWidth8100
\clftsWidth3 \cellx8415 \pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar
\keep1 \hyphpar0 \lin0 \rin0 \intbl \itap1 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\fs21 \kerning2 \rtlch \alang1025 \ltrch \loch \af4 \hich \af4 \dbch \af2 \lang1033
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 a.}
\alang1025 \cf1 \cell }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar
Purchasing agent.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \intbl \itap1 \rtlch \fcs1 \af0
\alang1025 \cf1 b.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \cell }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0
\widctlpar \keep1 \hyphpar0 \lin0 \rin0 \intbl \itap1 \rtlch \fcs1 \af0 \afs22
\ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025 \ltrch \loch \af4 \hich \af4
\dbch \af2 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 {\rtlch \fcs1
\cf1 Receiving clerk.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025 \ltrch \loch
\langfenp2052 \alang1025 \cf1 c.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain \ql
\li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \intbl \itap1
\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025 \ltrch
\loch \af4 \hich \af4 \dbch \af2 \lang1033 \langnp1033 \langfe2052 \langfenp2052
\langfenp2052 \alang1025 \cf1 Cost accountant.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Production
department supervisor.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qj \li0 \ri0
\lisb0 \lisa0 \nowidctlpar \aspalpha \aspnum \adjustright \lin0 \rin0 \intbl \itap1
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 C}
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The cost
accountant has the responsibility for the accounting records pertaining to
inventory valuation but not for the physical materials.}{\rtlch \fcs1 \af0 \afs2
\langfenp2052 \alang1025 \cf1 PTS:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 1}
\langfenp2052 \alang1025 \cf1 DIF:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
Moderate}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 REF:}{\rtlch \fcs1 \af0
\alang1025 \cf1 P.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 OBJ:}{\rtlch \fcs1 \af0
}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \par }\pard \plain \ql
\li0 \ri0 \lisb0 \lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \tql \tx0 \tql \tx634
\langfe2052 \langfenp2052 \alang1025 \cf1 NAT:}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \tab }{\rtlch \fcs1
\cf1 IMA 1C - Internal Controls}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
TOP:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 AACSB - Reflective}{\rtlch
\alang1025 \cf1 \tab }{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0
\lisb0 \sa1 \lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0
\alang1025 \cf1 \par }\pard \plain \ql \fi-630 \li0 \ri0 \lisb0 \lisa0
\widctlpar \keep1 \hyphpar0 \lin0 \rin0 \tqr \tx-180 \tql \tx0 \itap0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 3.}{\rtlch \fcs1 \af0
\alang1025 \cf1 The form prepared by the purchasing agent and sent to the vendor to
obtain materials is known as a:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Materials
requisition.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Purchase requisition.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Purchase order.}
\alang1025 \cf1 \cell }\pard \plain \qj \li0 \ri0 \lisb0 \lisa0 \nowidctlpar
\aspalpha \aspnum \adjustright \lin0 \rin0 \intbl \itap1 \rtlch \fcs1 \af0
\afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025 \ltrch \loch \af4
{\trowd \trql \trgaph0 \trleft-45 \trautofit1 \trftsWidth1 \trftsWidthB3
\alang1025 \cf1 d.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Vendor's invoice.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The
purchase order is prepared by the purchasing agent and sent to the vendor to order
materials.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \par }\pard \plain \ql \li0 \ri0 \lisb0 \sa1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 {\rtlch \fcs1 \af0
}\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0
\tql \tx0 \tql \tx634 \tql \tx1958 \tql \tx2592 \tql \tx3916 \tql \tx4550 \tql
\tx5874 \tql \tx6508 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 PTS:}
\alang1025 \cf1 REF:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 P.}{\rtlch \fcs1
\cf1 \tab }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\alang1025 \cf1 \par }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \nowidctlpar
\hyphpar0 \lin0 \rin0 \tql \tx0 \tql \tx634 \tql \tx1958 \tql \tx2592 \tql
\tx3916 \tql \tx4550 \tql \tx5874 \tql \tx6508 \itap0 \rtlch \fcs1 \af0 \afs22
\cf1 NAT:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 IMA 2B - Cost Management}
\dbch \af2 \hich \af0 \loch \f0 \lang1033 \langnp1033 \langfe2052
\langfenp2052 \alang1025 \cf1 \tab }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 TOP:}{\rtlch
\langfenp2052 \alang1025 \cf1 AACSB - Analytic}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The form that serves as
authorization to withdraw materials from the storeroom is known as the:}{\rtlch
\alang1025 \cf1 \par }\trowd \trql \trgaph0 \trleft-45 \trautofit1 \trftsWidth1
\trftsWidthB3 \trftsWidthA3 \trpaddl45 \trpaddr45 \trpaddfl3 \trpaddft3
\trpaddfb3 \trpaddfr3 \clvertalt \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt
\brdrnone \cltxlrtb \clwWidth8100 \clftsWidth3 \cellx8415 \pard \plain \ql \li0
\ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \intbl \itap1 \rtlch
\langfenp2052 \alang1025 \cf1 a.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Stores requisition.}{\rtlch \fcs1 \af0 \afs22
\adjustright \lin0 \rin0 \intbl \itap1 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Purchase order.}
\alang1025 \cf1 c.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Returned materials
report.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 A}
stores requisition is prepared by the production department supervisor or an
assistant and is presented to the storeroom keeper as authorization for the
withdrawal of materials.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0
\cf1 PTS:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 1}{\rtlch \fcs1 \af0
\alang1025 \cf1 DIF:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Easy}{\rtlch
\langfenp2052 \alang1025 \cf1 REF:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 IMA 1C - Internal Controls}
\langfenp2052 \alang1025 \cf1 TOP:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
AACSB - Analytic}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\li0 \ri0 \lisb0 \sa1 \lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1
{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \par }\pard \plain \ql \fi-630 \li0
\ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \tqr \tx-180 \tql
\tx0 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 5.}{\rtlch \fcs1
\langfenp2052 \alang1025 \cf1 The form used to notify the purchasing agent that
additional materials are needed is known as a:}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \par }\trowd
\trql \trgaph0 \trleft-45 \trautofit1 \trftsWidth1 \trftsWidthB3 \trftsWidthA3
\trpaddl45 \trpaddr45 \trpaddfl3 \trpaddft3 \trpaddfb3 \trpaddfr3 \clvertalt
\clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone \clbrdrb \brdrnone
\cltxlrtb \clwWidth360 \clftsWidth3 \cellx315 \clvertalt \clbrdrl \brdrnone
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Purchase
order.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cf1 Vendor's invoice.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\cf1 Receiving report.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\row }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \hyphpar0 \lin0
\langfe2052 \langfenp2052 \alang1025 {\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2
\cf1 ANS:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 D}{\rtlch \fcs1 \af0
}\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The storeroom
keeper prepares a purchase requisition to notify the purchasing agent that
additional materials are needed.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Easy}{\rtlch
\alang1025 \cf1 To effectively control materials, a business must maintain:}{\rtlch
\af2 \hich \af0 \loch \f0 \lang1033 \langnp1033 \langfe2052
\langfenp2052 \alang1025 \cf1 \par }\trowd \trql \trgaph0 \trleft-45
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Limited access.}
\cf1 Combination of duties.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Safety stock.}
\cf1 None of these are correct.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\alang1025 \ltrch \dbch \af2 \hich \af0 \loch
\f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \tab }
\alang1025 \cf1 A}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\widctlpar \keep1 \hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 To
control materials a business must maintain limited access, segregation of duties,
and accuracy in recording.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Moderate}{\rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 IMA 1C - Internal Controls}
AACSB - Reflective}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\alang1025 \cf1 If the amount of materials on hand at the end of the period is less
than the control account balance, the control account balance should be decreased
by the following entry:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\fs22 \kerning0 \rtlch
\alang1025 \ltrch \dbch \af2 \hich \af0 \loch \f0 \lang1033 \langnp1033
\langfe2052 \langfenp2052 \alang1025 \cf1 a.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \intbl
\langfe2052 \langfenp2052 \alang1025 \cf1 Debit - Work in Process}{\rtlch \fcs1
\cf1 \par }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Credit -
Materials}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 \cell }\pard \plain \qj \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \aspalpha \aspnum
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Debit - Materials}
\hyphpar0 \lin0 \rin0 \intbl \itap1 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21
Credit - Factory Overhead}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \intbl \itap1 \rtlch \fcs1
\cf1 Debit - Materials}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 Credit - Work in Process}{\rtlch \fcs1 \af0 \afs22 \ltrch
\plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0
\fs22 \kerning0 \rtlch \alang1025 \ltrch \dbch \af2
\cf1 Debit - Factory Overhead}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Credit - Materials}{\rtlch \fcs1 \af0 \afs22
\par }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 If the amount of
materials on hand per the physical count is less than the control account balance,
the balance should be decreased by a debit to Factory Overhead and a credit to
Materials.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Moderate}{\rtlch \fcs1
\kerning0 \rtlch \alang1025
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 AACSB - Analytic}{\rtlch
\alang1025 \cf1 The following data refer to various annual costs relating to the
inventory of a single-product company that requires 10,000 units per year:}
\par }\trowd \trql \trgaph0 \trleft-108 \trautofit1 \trftsWidth1 \trftsWidthB3
\trftsWidthA3 \trpaddl108 \trpaddr108 \trpaddfl3 \trpaddft3 \trpaddfb3
\trpaddfr3 \clvertalt \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone
\clbrdrb \brdrnone \cltxlrtb \clwWidth7038 \clftsWidth3 \cellx6930 \clvertalt
\cltxlrtb \clwWidth1800 \clftsWidth3 \cellx8730 \pard \plain \ql \li0 \ri0
\alang1025 \cf1 \cell }\pard \plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Cost
per unit}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \ul1 \cell }\pard \plain \qj \li0 \ri0 \lisb0
\lisa0 \nowidctlpar \aspalpha \aspnum \adjustright \lin0 \rin0 \intbl \itap1 \rtlch
\alang1025 {\trowd \trql \trgaph0 \trleft-108 \trautofit1 \trftsWidth1
\brdrnone \cltxlrtb \clwWidth1800 \clftsWidth3 \cellx8730 \row }\trowd \trql
\trgaph0 \trleft-108 \trautofit1 \trftsWidth1 \trftsWidthB3 \trftsWidthA3
\cltxlrtb \clwWidth7038 \clftsWidth3 \cellx6930 \clvertalc \clbrdrl \brdrnone
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Order
cost}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qr \li0 \ri0 \lisb0 \lisa0
\cf1 $ .05\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}{\rtlch
\clbrdrb \brdrnone \cltxlrtb \clwWidth7038 \clftsWidth3 \cellx6930 \clvertalc
\cltxlrtb \clwWidth1800 \clftsWidth3 \cellx8730 \row }\pard \plain \ql \li0 \ri0
\alang1025 \cf1 Transportation-in on purchases}{\rtlch \fcs1 \af0 \afs22 \ltrch
\qr \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \intbl
\langfe2052 \langfenp2052 \alang1025 \cf1 .18\uc1 \u160 ?\uc1 \u160 ?\uc1
\u160 ?\uc1 \u160 ?\uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\langfe2052 \langfenp2052 \alang1025 {\trowd \trql \trgaph0 \trleft-108 \trautofit1
\trftsWidth1 \trftsWidthB3 \trftsWidthA3 \trpaddl108 \trpaddr108 \trpaddfl3
\trpaddft3 \trpaddfb3 \trpaddfr3 \clvertalt \clbrdrl \brdrnone \clbrdrr
\clftsWidth3 \cellx6930 \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone
\clbrdrt \brdrnone \clbrdrb \brdrnone \cltxlrtb \clwWidth1800 \clftsWidth3
\cellx8730 \row }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1
\langnp1033 \langfe2052 \langfenp2052 \alang1025
\alang1025 \cf1 Storage}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qr \li0 \ri270
\lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin270 \intbl \itap1 \rtlch
\langfenp2052 \alang1025 \cf1 .16\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}{\rtlch \fcs1
\langnp1033 \langfe2052 \langfenp2052 \alang1025 {\trowd \trql \trgaph0 \trleft-108
\cellx8730 \row }\trowd \trql \trgaph0 \trleft-108 \trautofit1 \trftsWidth1
\langfenp2052 \alang1025 \cf1 Insurance}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 .10\uc1 \u160 ?\uc1 \u160 ?\uc1
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \par }\pard \plain \qr
\brdrnone \cltxlrtb \clwWidth1800 \clftsWidth3 \cellx8730 \row }\pard \plain \ql
\langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qc \li0 \ri0 \lisb0 \lisa0
\cf1 \ul1 Total per year}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \cell }\pard \plain \qj \li0 \ri0
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Interest
that could have been earned on alternate investment of funds}{\rtlch \fcs1 \af0
\cell }\pard \plain \qr \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $800\uc1
\u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}{\rtlch \fcs1 \af5
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 What is the annual
carrying
cost per unit?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \par }\trowd \trql \trgaph0 \trleft-45 \trautofit1
\brdrnone \clbrdrt \brdrnone \clbrdrb \brdrnone \cltxlrtb \clwWidth360 \clftsWidth3
\cellx315 \clvertalt \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone
\clbrdrb \brdrnone \cltxlrtb \clwWidth8100 \clftsWidth3 \cellx8415 \pard \plain \ql
\langfenp2052 \alang1025 \cf1 $ .21}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $ .29}{\rtlch \fcs1
\cf1 ANS:}{\rtlch
\fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025 \ltrch \dbch \af2
\langfenp2052 \alang1025 \cf1 C}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1
\alang1025 \cf1 The carrying costs will consist of the per unit costs for storage,
insurance, and interest on the inventory investment.}{\rtlch \fcs1 \af0 \afs22
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Carrying
costs:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\clftsWidth3 \cellx5940 \clvertalt \clbrdrl \brdrnone \clbrdrr \brdrnone
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \uc1
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Storage}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $.16}{\rtlch
\alang1025 \cf1 \uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}{\rtlch \fcs1 \af0 \afs22
Insurance}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 \cell }\pard \plain \qr \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 .10}{\rtlch
\alang1025 \cf1 \par }\pard \plain \qr \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1
\clvmgf \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone
\clftsWidth3
\cellx5940 \clvmgf \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt
\pard \plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Interest}
\alang1025 \cf1 \ul1 \cell }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 =}{\rtlch
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \uc1
\u160 ?}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 \ul1 $800\uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1
\cell }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0
\langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \uc1 \u160 ?}{\rtlch \fcs1 \af5
\af5 \loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1
.08}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025 \ltrch
\alang1025 \cf1 \ul1 \cell }\pard \plain \qj \li0 \ri0 \lisb0 \lisa0
\clftsWidth3 \cellx5940 \clvmgf \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone
\clvmrg \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone
\clftsWidth3 \cellx5940 \clvmrg \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone
\cellx7290 \pard \plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Units required}
\cell }\pard \plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 10,000}{\rtlch
\cellx2520 \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone
\cltxlrtb \clwWidth2340 \clftsWidth3 \cellx5940 \clvmrg \clvertalc \clbrdrl
\clwWidth1350 \clftsWidth3 \cellx7290 \row }\trowd \trql \trgaph0 \trleft-108
\clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt
\clbrdrb \brdrnone \cltxlrtb \clwWidth1350 \clftsWidth3 \cellx7290 \row }\pard
\plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Carrying costs}
\alang1025 \cf1 \uldb3 $.34}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \uldb3 \cell }\pard \plain
\clftsWidth3 \cellx7290 \row }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \nowidctlpar
\cf1 Hard}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\alang1025 \cf1 1}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 IMA 3A - Strategic
Planning}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Expected annual usage of a
particular raw material is 180,000 units, and standard order size is 12,000 units.
The invoice cost of each unit is $300, and the cost to place one purchase order is
$80. The average inventory is:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 10,000
units.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cf1 7,500 units.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\clwWidth8100 \clftsWidth3 \cellx8415 \row }\pard \plain
\langfe2052 \langfenp2052 \alang1025 \cf1 c.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 15,000 units.}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 6,000 units.}
\brdrnone \cltxlrtb \clwWidth431 \clftsWidth3 \cellx2430 \clvertalc \clbrdrl
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Average
inventory}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 =}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cf1 \ul1 12,000}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \ul1 \cell }\pard \plain \ql \li0 \ri0 \lisb0
\alang1025 \cf1 (standard-size order)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\cellx2430 \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \uc1 \u160 ?\uc1
\u160 ?\uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 2}{\rtlch \fcs1 \af5 \afs20 \ltrch
\clftsWidth3 \cellx6570 \row }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 =}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 6,000 units}{\rtlch
\alang1025 {\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch
{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
OBJ:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 NAT:}
\langfenp2052 \alang1025 \cf1 IMA 3A - Strategic Planning}{\rtlch \fcs1 \af0 \afs22
\alang1025 \cf1 TOP:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 AACSB - Analytic}
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 10.}{\rtlch \fcs1 \af0 \afs22
\alang1025 \cf1 Expected annual usage of a particular raw material is 1,200,000
units, and standard order size is 10,000 units. The invoice cost of each unit is
$145, and the cost to place one purchase order is $105. The estimated annual order
cost is:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 $12,000.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $17,400.}{\rtlch
\ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025
\langfe2052 \langfenp2052 \alang1025 \cf1 $12,600.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $800,000.}
\clwWidth4860 \clftsWidth3 \cellx7290 \pard \plain \ql \li0 \ri0 \lisb0 \lisa0
\cf1 Annual order cost}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain \ql \li0 \ri0
\alang1025 \cf1 =}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Number of orders }{\rtlch \fcs1 \af6 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \uc1 \u61620 ?}{\rtlch \fcs1 \af0
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Per
order cost}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0 \afs22
\lin0 \rin0 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch
\clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone
1,200,000 units}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \ul1 \cell }\pard \plain \ql \li0 \ri0 \lisb0
\alang1025 \cf1 \uc1 \u61620 ?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $105}{\rtlch \fcs1 \af0
\cf1 10,000 units}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cltxlrtb \clwWidth990 \clftsWidth3 \cellx3420 \row }\trowd \trql \trgaph0 \trrh240
\trleft-108 \trautofit1 \trftsWidth1 \trftsWidthB3 \trftsWidthA3 \trpaddl108
\cellx3420 \pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 120 orders }{\rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $105}{\rtlch \fcs1 \af0
\langfe2052 \langfenp2052 \alang1025 {\trowd \trql \trgaph0 \trrh240 \trleft-108
\cltxlrtb \clwWidth468 \clftsWidth3 \cellx360
\cf1 $12,600}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 IMA 3A - Strategic Planning}
\ltrch \dbch \af2 \hich
\tab }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 11.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
Assuming that demand is determinable, what is the objective of the economic order
quantity (EOQ) model for inventory?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 To
minimize order costs or carrying costs, whichever are higher}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 To minimize order
costs or carrying costs and maximize the rate of inventory turnover}{\rtlch
\cf1 To minimize the total order costs and carrying costs over a period of time}
\cf1 To order sufficient quantity to economically meet the next period's demand}
\f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052
\alang1025 \cf1 \par }\pard \plain \ql \li0 \ri0 \lisb0 \sa1 \lisa0
\nowidctlpar \hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\par }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \hyphpar0 \lin0
\rin0 \tql \tx0 \tql \tx634 \tql \tx1958 \tql \tx2592 \tql \tx3916 \tql \tx4550
\tql \tx5874 \tql \tx6508 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 ANS:}
\alang1025 \cf1 If the demand for the product can be determined because it is
predictable, the essence of any EOQ model for inventory is to minimize the total
order costs and also minimize the total carrying costs.}{\rtlch \fcs1 \af0 \afs2
Easy}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\alang1025 \cf1 12.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Gedye Company has
correctly computed its economic order quantity at 500 units; however, management
feels it would rather order in quantities of 600 units. How should Gedye's total
annual purchase order cost and total annual carrying cost for an order quantity of
600 units compare to the respective amounts for an order quantity of 500 units?}
{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\fs22 \kerning0 \rtlch \alang1025 \ltrch \dbch \af2 \hich \af0 \loch \f0 \lang1033
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Higher
purchase order cost and lower carrying costs}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Lower purchase
order cost and higher carrying cost}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Higher purchase
order cost and higher carrying cost}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Lower purchase
order cost and lower carrying cost}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 ANS:}{\rtlch \fcs1 \af0 \afs22 \ltrch
\cf1 B}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 If
orders were placed for 600 units instead of EOQ of 500 units, fewer purchase orders
would have to be placed to acquire the total units required for production, thereby
reducing the purchase order cost. However, due to the larger number of units
ordered each time, the number of units stored would be greater and a higher
carrying cost would result.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Hard}{\rtlch
\alang1025 \cf1 Rowe Co.'s Job 401 for the manufacture of 2,200 coats was completed
during August at the unit costs presented below. Final inspection of Job 401
disclosed 200 spoiled coats that were sold to a jobber for $6,000.}{\rtlch \fcs1
\cltxlrtb \clwWidth5958
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Direct materials}
\alang1025 \cf1 \cell }\pard \plain \qr \li0 \ri0 \lisb0 \lisa0 \widctlpar
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $24}
\alang1025 \cf1 Direct labor}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone \clbrdrb
\langfenp2052 \alang1025 \cf1 Factory overhead }{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \uc1 \u160 ?}{\rtlch \fcs1 \af5
14}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\cf1 \uldb3 $56}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \uldb3 \cell }\pard \plain \qj \li0 \ri0 \lisb0
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Assume
that spoilage loss is attributable to the exacting specifications of Job 401 and is
charged to this specific job. What would be the unit cost of the good coats
produced on Job 401?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\intbl \itap1 \rtlch \fcs1 \af0 \afs22
\cf1 a.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cf1 $56.00}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 B}
\kerning2 \rtlch \alang1025 \ltrch \loch \af4 \hich \af4 \dbch
\af2 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 {\rtlch \fcs1 \af0
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 When
the spoilage loss is charged to the specific job on which the spoilage occurred,
the cost of producing the good units includes the cost of producing all units less
the amount received for the spoilage:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 \par }\trowd \trql \trgaph0 \trrh240
\clwWidth2268 \clftsWidth3 \cellx2160 \clvmgf \clvertalc \clbrdrl \brdrnone
\clftsWidth3 \cellx3330 \pard \plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar
2,200 ($56) - $6,000}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \cell }\pard \plain \ql \li0 \ri0
\alang1025 \cf1 = $58.60}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 {\trowd \trql \trgaph0 \trrh240 \trleft-108 \trautofit1 \trftsWidth1
\clbrdrb \brdrnone \cltxlrtb \clwWidth1170 \clftsWidth3 \cellx3330 \row }\trowd
\cltxlrtb \clwWidth2268 \clftsWidth3 \cellx2160 \clvmrg \clvertalc \clbrdrl
\clwWidth1170 \clftsWidth3 \cellx3330 \pard \plain \qc \li0 \ri0 \lisb0 \lisa0
\cf1 2,000}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cellx3330 \row }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \hyphpar0
\lin0 \rin0 \tql \tx0 \tql \tx634 \tql \tx1958 \tql \tx2592 \tql \tx3916 \tql
\tx4550 \tql \tx5874 \tql \tx6508 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langnp1033 \langfe2052 \langfenp2052 \alang1025 {\rtlch \fcs1 \af0 \afs2 \ltrch
Hard}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\alang1025 \ltrch \dbch \af2
\cf1 \par }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \hyphpar0 \lin0
\langfenp2052 \alang1025 \cf1 IMA 2B - Cost Management}{\rtlch \fcs1 \af0 \afs22
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Direct
materials}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 $24}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 Direct labor}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 18}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Factory
overhead }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 \ul1 \uc1 \u160 ?}{\rtlch \fcs1
14}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\cf1 \uldb3 $56}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \uldb3 \cell }\pard \plain \qj \li0 \ri0 \lisb0
that the spoilage loss is attributable to the exacting specifications of Job 401
and is charged to this specific job. What would be the journal entry to record the
spoilage?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
}\trowd \trql \trgaph0 \trleft-45 \trautofit1 \trftsWidth1 \trftsWidthB3
\cf1 Debit - Factory Overhead 6,000}{\rtlch \fcs1 \af5 \afs20 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Credit - Work
in Process 6,000}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\cf1 Debit - Spoiled Goods Inventory 6,000}{\rtlch \fcs1 \af5 \afs20 \ltrch
in Process 6,000}{\rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Debit - Spoiled
Goods Inventory 6,000}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\langfenp2052 \alang1025 \cf1 Debit - Factory Overhead 5,200
Credit - Work in Process 11,200 }{\rtlch \fcs1 \af5
\langfenp2052 \alang1025 \cf1 Credit - Factory Overhead 6,000}
\langfenp2052 \alang1025 \cf1 \tab }{\rtlch \fcs1 \af0
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 B}{\rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 When the
spoilage loss is charged to the specific job on which the spoilage occurred, the
market value of the spoilage is charged to Spoiled Goods Inventory and the cost of
the job in work in process is reduced by the same amount.}{\rtlch \fcs1 \af0
\cf1 \ul1 \uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 14}{\rtlch \fcs1 \af5 \afs20
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \uldb3 $56}
\alang1025 \cf1 \uldb3 \cell }\pard \plain \qj \li0 \ri0 \lisb0 \lisa0 \nowidctlpar
\lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0
that the spoilage loss is charged to all production during August. What would be
the journal entry to record the spoilage?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\alang1025 \ltrch \loch \af4
\alang1025 \cf1 a.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Debit - Factory Overhead 11,200}{\rtlch \fcs1 \af5 \afs20 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Debit - Factory
Overhead 5,200 }{\rtlch \fcs1 \af5 \afs20 \ltrch
in Process 11,200 }{\rtlch \fcs1 \af5 \afs20 \ltrch
\brdrnone \clbrdrb \brdrnone \cltxlrtb \clwWidth8100 \clftsWidth3 \cellx8415 \row
\langfenp2052 \alang1025 \cf1 Credit - Factory Overhead 11,200}
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 C}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 When the spoilage
loss is charged to all of production, the market value of the spoiled goods is
charged to Spoiled Goods Inventory, but the cost of the job in work in process is
reduced by the entire cost of the spoiled items. The difference is a loss, which
is charged to Factory Overhead.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Cost of spoiled items (200 x $56)}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $11,200}{\rtlch
\alang1025 \cf1 Market value of spoiled units}{\rtlch \fcs1 \af0 \afs22 \ltrch
\rtlch \alang1025 \ltrch \dbch \af2 \hich \af5 \loch \f5 \lang1033
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 }{\rtlch \fcs1 \af5
6,000}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\clwWidth4230 \clftsWidth3 \cellx8370 \row }\trowd \trql \trgaph0 \trrh225 \trleft-
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Amount charged to
Factory Overhead}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 $}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 \uldb3 5,200}{\rtlch \fcs1 \af5 \afs20 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 }{\rtlch \fcs1
\langnp1033 \langfe2052 \langfenp2052 \alang1025 {\trowd \trql \trgaph0 \trrh225
\alang1025
\alang1025 \cf1 During March, Hart Company incurred the following costs on Job 122
for the manufacture of 200 motors:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\trftsWidthB3 \trwWidthA1530 \trftsWidthA3 \trpaddl108 \trpaddr108 \trpaddfl3
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Original cost
accumulation:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\trautofit1 \trftsWidth1 \trftsWidthB3 \trwWidthA1530 \trftsWidthA3 \trpaddl108
\cf1 \uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $2,600}
\trwWidthA1530 \trftsWidthA3 \trpaddl108 \trpaddr108 \trpaddfl3 \trpaddft3
\langfenp2052 \alang1025 \cf1 \uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}{\rtlch \fcs1
\cf1 Direct labor}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 900}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Factory overhead }{\rtlch
\fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 1,350}{\rtlch \fcs1 \af5 \afs20
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \uldb3 $4,850}
\langfenp2052 \alang1025 \cf1 Direct costs of reworking 10 units:}{\rtlch \fcs1
\trftsWidth1 \trftsWidthB3 \trwWidthA1530 \trftsWidthA3 \trpaddl108 \trpaddr108
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Direct materials}{\rtlch
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $ 100}
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Direct labor}
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 180}
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 }
{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Factory overhead}{\rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 270}{\rtlch \fcs1
\cf1 \ul1 \cell }\pard \plain \qj \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \aspalpha
\aspnum \adjustright \lin0 \rin0 \intbl \itap1 \rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 {\trowd \trql
\trgaph0 \trleft-108 \trautofit1 \trftsWidth1 \trftsWidthB3 \trwWidthA1530
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \uldb3
$\uc1 \u160 ?\uc1 \u160 ?550}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \uldb3 \cell }\pard \plain \qj \li0
\ri0 \lisb0 \lisa0 \nowidctlpar \aspalpha \aspnum \adjustright \lin0 \rin0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The rework costs
were attributable to the exacting specifications of Job 122, and the full rework
costs were charged to this specific job. What is the cost per finished unit of Job
122?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 $25.00}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\hich \af0 \loch \f0 \lang1033 \langnp1033 \langfe2052
\alang1025 \cf1 \par }\trowd \trql \trgaph0 \trrh255 \trleft-108 \trautofit1
\langfenp2052 \alang1025 \cf1 Original cost}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 $4,850}{\rtlch \fcs1 \af5 \afs20
\trautofit1 \trftsWidth1
\langfenp2052 \alang1025 \cf1 Rework materials}{\rtlch \fcs1 \af0 \afs22 \ltrch
\alang1025 \cf1 Rework labor}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 180}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\cf1 Rework overhead }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 \ul1 \uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 270}{\rtlch
\alang1025 \cf1 \ul1 \cell }\pard \plain \qr \li0 \ri0 \lisb0 \lisa0 \widctlpar
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Total cost}
\alang1025 \cf1 \uldb3 $5,400}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qr
\alang1025 \cf1 Unit cost ($5,400/200)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 \uldb3 $27}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1
\langnp1033
\langfe2052 \langfenp2052 \alang1025 \cf1 \tab }{\rtlch \fcs1 \af0 \afs22
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 AACSB -
Analytic}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\alang1025 \cf1 During March, Hart Company incurred the following costs on Job 122
for the manufacture of 200 motors:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Original cost
accumulation:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $2,600}
\cf1 Direct labor}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052
\alang1025 \cf1 \uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \uldb3 $4,850}
\langfenp2052 \alang1025 \cf1 Direct costs of reworking 10 units:}{\rtlch \fcs1
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Direct materials}{\rtlch
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $ 100}
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Direct labor}
\fs21 \kerning2 \rtlch \alang1025 \ltrch \loch \af4 \hich \af4 \dbch
\af5 \loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 }
\clftsWidth3 \cellx8910 \row }\trowd \trql \trgaph0 \trleft-108 \trautofit1
\langfe2052 \langfenp2052 \alang1025 \cf1 Factory overhead}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \uc1
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 270}{\rtlch \fcs1
\trgaph0 \trleft-108 \trautofit1 \trftsWidth1 \trftsWidthB3 \trwWidthA1530
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \uldb3
$\uc1 \u160 ?\uc1 \u160 ?550}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Assume the rework
costs are to be spread over all jobs that go through the production cycle. What is
the journal entry needed to record the rework costs?}{\rtlch \fcs1 \af0 \afs22
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Debit -
Work in Process 550}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\langfenp2052 \alang1025 \cf1 Credit - Materials 100}
{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\langfenp2052 \alang1025 \cf1 Credit - Payroll 180}
Credit - Factory Overhead 270}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 }{\rtlch
\cf1 Debit - Materials 100}{\rtlch \fcs1 \af5 \afs20 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Debit - Payroll
180}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025 \ltrch
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Debit -
Factory Overhead 270}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\langfenp2052 \alang1025 \cf1 Credit - Work in Process 550}
Overhead 550}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\cf1 Credit - Materials 100}{\rtlch \fcs1 \af5 \afs20
Payroll 180}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \par }\pard \plain
\langfe2052 \langfenp2052 \alang1025 \cf1 Credit - Factory Overhead
Goods Inventory 550}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\cf1 Credit - Work in Process 550}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 When the costs of
correcting defective work is to be spread over all jobs, the material, labor and
factory overhead costs are charged to Factory Overhead.}{\rtlch \fcs1 \af0 \afs2
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 IMA 2B - Cost
Management}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The Bisset
Corporation uses Raw Material A in a manufacturing process. Information as to
balances on hand, purchases, and requisitions of Raw Material A is given in the
following table.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Raw Material A}
\par }\trowd \trql \trgaph0 \trrh870 \trleft-90 \trautofit1 \trftsWidth1
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \par
}\pard \plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \par }\pard
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Date}
\alang1025 \cf1 \ul1 \cell }\pard \plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar
\par }\pard \plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 }
\alang1025 \cf1 \ul1 Transaction}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \cell }\pard \plain
\qc \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \intbl
\langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \par }\pard \plain \qc \li0 \ri0
\alang1025 \cf1 \ul1 Number of Units}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Unit Price}
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Balance of
Units}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 \ul1 \par }\pard \plain \qc \li0 \ri0 \lisb0
\trql \trgaph0 \trleft-90 \trautofit1 \trftsWidth1 \trftsWidthB3 \trwWidthA18
\trpaddfr3 \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Jan. 1}{\rtlch
\af2 \hich \af0 \loch \f0 \lang1033
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain \ql \li0
\langfenp2052 \alang1025 \cf1 Beginning balance}{\rtlch \fcs1 \af5 \afs20 \ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 $1.40}{\rtlch \fcs1 \af5 \afs20 \ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 \uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 100}{\rtlch
\trpaddr108 \trpaddfl3 \trpaddft3 \trpaddfb3 \trpaddfr3 \clvertalc \clbrdrl
\clwWidth1152 \clftsWidth3 \cellx1062 \clvertalc \clbrdrl \brdrnone \clbrdrr
Purchased\uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\cf1 $1.55}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\rtlch \alang1025 \ltrch
\loch \af4 \hich \af4 \dbch \af2 \lang1033 \langnp1033 \langfe2052
\trwWidthA18 \trftsWidthA3 \trpaddl108 \trpaddr108 \trpaddfl3 \trpaddft3 \trpaddfb3
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Feb. 8}
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Issued}
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Mar. 16}{\rtlch
\fs21 \kerning2 \rtlch \alang1025
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Jun. 11}
Purchased}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\cellx8370 \clvertalc \clbrdrl \brdrnone
\cf1 Aug. 18}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Issued}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Sep. 6}
\lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0
\rin0 \intbl \itap1 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Oct. 15}{\rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Dec. 29}{\rtlch
\keep1 \hyphpar0
90 \trautofit1 \trftsWidth1 \trftsWidthB3 \trwWidthA18 \trftsWidthA3 \trpaddl108
\alang1025 \cf1 If a perpetual inventory record of Raw Material A is maintained on
a FIFO basis, the March 16 issue will consist of:}{\rtlch \fcs1 \af0 \afs22
\cf1 20 units @ $1.40 and 120 units @ $1.55.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 100 units @ $1.40
and 40 units @ $1.55.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 140 units @ $1.55.}{\rtlch \fcs1 \af0 \afs22
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 On a FIFO
basis, 20 of the units issued on March 16 would have been assigned a cost of $1.40
per unit and the remaining 120 units issued on that date would have been assigned a
cost of $1.55 per unit as follows:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfe2052 \langfenp2052 \alang1025 \cf1 Number of }{\rtlch \fcs1 \af0 \afs22
\rin0 \intbl \itap1 \rtlch \fcs1
\af0 \afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025 \ltrch \loch \af4 \hich
\alang1025 \cf1 \ul1 Unit Price}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qc
\langfenp2052 \alang1025 \cf1 Units issued on }{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 February 8}
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Units
issued on }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 \ul1 March 16}{\rtlch \fcs1 \af0 \afs22 \ltrch
\cf1 Beginning Balance}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 $1.40}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 80}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Jan. 24 Purchase}
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $1.55}
\loch \f0 \lang1033 \langnp1033 \langfe2052
\alang1025 \cf1 The Bisset Corporation uses Raw Material A in a manufacturing
process. Information as to balances on hand, purchases, and requisitions of Raw
Material A is given in the following table.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar
\keep1 \hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1
\fs21 \kerning2
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Beginning
balance}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\cf1 \uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Feb. 8}{\rtlch
\lin0 \rin0 \intbl \itap1 \rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Jun. 11}{\rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 {\rtlch
\cf1 Purchased}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Aug. 18}{\rtlch
\trpaddfr3 \clvertalc
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Sep. 6}{\rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Oct. 15}
\cf1 \cell }\pard
\plain \qr \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 If a perpetual
inventory record of Raw Material A is maintained on a LIFO basis, the March 16
issue will consist of:}{\rtlch
\cf1 \par }\trowd \trql \trgaph0 \trleft-45 \trautofit1 \trftsWidth1
\langfenp2052 \alang1025 \cf1 20 units @ $1.40 and 120 units @ $1.55.}{\rtlch \fcs1
\cf1 140 units @ $1.55.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 On a LIFO basis,
the 140 units issued on February 8 would have been assigned a cost of $1.55 per
unit as follows:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Number of }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \ul1 Units}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 \par }\pard \plain \qc \li0 \ri0
\alang1025 \cf1 \ul1 Unit Price}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Units issued on }{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 February 8}
\langfenp2052 \alang1025 \cf1 \ul1 March 16}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfenp2052 \alang1025 \cf1 $1.40}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
}{\rtlch \fcs1 \af0
Transaction}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \ul1 \cell }\pard \plain \qc \li0 \ri0 \lisb0
\alang1025 \cf1 \ul1 \par }\pard \plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar
Number of Units}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Unit
Price}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\keep1 \hyphpar0 \lin0 \rin0 \intbl \itap1 \rtlch \fcs1
\alang1025 \cf1 Beginning balance}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\langfenp2052 \alang1025 \cf1 $1.40}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\langfenp2052 \alang1025 \cf1 \uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20 \ltrch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Jan. 24}
\fs20 \kerning0 \rtlch \alang1025 \ltrch
\plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Aug. 18}
\hich \af4 \dbch \af2 \lang1033 \langnp1033 \langfe2052
\langnp1033
a moving average basis, the 140 units issued on March 16 will have a unit cost of:}
\langfenp2052 \alang1025 \cf1 $1.5125.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $1.475.}{\rtlch
\langfenp2052
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $1.55.}
\cf1 $1.4375.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 On a
moving average basis, the 140 units issued on March 16 would have a unit cost of
$1.5125 as follows:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Unit
\cf1 \par }\pard \plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Total Cost}
\cf1 Jan. 24 Purchase}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 \ul1 300}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \ul1 \cell }\pard \plain \qr \li0 \ri0 \lisb0
\cf1 \ul1 465.00}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\alang1025 \cf1 $605.00}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \par }\pard \plain \ql \li0 \ri-90 \lisb0
\lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin-90 \itap0 \rtlch \fcs1 \af0 \afs22
\cf1 Average cost for both the February 8 and March 16 issue would be $1.5125 ($605
/ 400 units).}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch
\tx3916 \tql \tx4550 \tql \tx5874 \tql \tx6508
\cf1 IMA 2B - Cost Management}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
Material A is given in the following table.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\alang1025 \cf1 Raw Material A}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\alang1025 \cf1 \par }\trowd \trql \trgaph0 \trrh870 \trleft-90 \trautofit1
\cltxlrtb \clwWidth378 \clftsWidth3 \cellx8748 \pard \plain \qc \li0 \ri0 \lisb0
\af4 \dbch \af2 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 {\rtlch
\cf1 100}{\rtlch \fcs1 \af5 \afs20
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $1.40}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \uc1 \u160 ?}
\cellx4680 \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone
\langfe2052 \langfenp2052
\alang1025 \cf1 Issued}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\clbrdrr \brdrnone \clbrdrt \brdrnone \clbrdrb
\cf1 Oct. 15}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\rtlch \alang1025
a FIFO basis, the September 6 issue will consist of:}{\rtlch \fcs1 \af0 \afs22
\cf1 10 units @ $1.40, 80 units @ $1.55 and 20 units @ $1.62.}{\rtlch \fcs1 \af0
\cf1 110 units @ $1.55.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 {\trowd
\cf1 d.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cf1 50 units @ $1.55 and 60 units @ $1.62.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 On a FIFO basis, 50
of the units issued on September 6 would have been assigned a cost of $1.55 per
unit and the remaining 60 units issued on that date would have been assigned a cost
of $1.62 per unit as follows:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\cltxlrtb \clwWidth972 \clftsWidth3 \cellx8604 \pard \plain \ql \li0 \ri0 \lisb0
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Number of
\alang1025 \cf1 \ul1 Units}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \par }\pard \plain
\langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qc \li0 \ri0
\alang1025 \cf1 \par }\pard \plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1
\af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025 \ltrch
\alang1025 \cf1 Units issued on }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Feb. 8}{\rtlch \fcs1
\cf1 \cell }\pard \plain \qc \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Units issued on }
\alang1025 \cf1 \ul1 Mar. 16}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 Units issued on }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Aug. 18}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Units issued }
\alang1025 \cf1 \ul1 on Sep.6}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Beginning Balance}
\trql \trgaph0 \trrh255 \trleft-90 \trautofit1 \trftsWidth1 \trftsWidthB3
\trftsWidthA3 \trpaddl90
{\trowd \trql \trgaph0 \trrh255 \trleft-90 \trautofit1 \trftsWidth1
\alang1025 \cf1 Jun. 11 Purchase}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\qr \li0
Material A is given in the following table.}{\rtlch \fcs1 \af0
\langfe2052 \langfenp2052 \alang1025 \cf1 Raw Material A}{\rtlch \fcs1 \af0
\dbch \af2 \hich \af0 \loch \f0 \lang1033
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \cell }\pard \plain \qc
\af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\alang1025 \cf1 \cell }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1
\af4 \dbch \af2 \lang1033 \langnp1033
\trpaddfl3 \trpaddft3 \trpaddfb3 \trpaddfr3 \clvertalc \clbrdrl \brdrnone
\alang1025 \cf1 Sep. 6}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 Issued}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 90}{\rtlch \fcs1
\dbch \af2 \lang1033 \langnp1033 \langfe2052
\fs22 \kerning0 \rtlch \alang1025 \ltrch
a LIFO basis, the September 6 issue will consist of:}{\rtlch \fcs1 \af0 \afs22
\cf1 80 units @ $1.55, 20 units @ $1.62 and 10 units @ $1.40.}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 110 units @ $1.55.}
\cf1 50 units @1.55 and 60 units @ 1.62.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\fcs1 \af0 \afs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 A}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 On a LIFO basis, 20
of the units issued on September 6 would have been assigned a cost of $1.62 per
unit, 80 of the units issued would have been assigned a cost of $1.55 per unit and
the remaining 10 units issued on that date would have been assigned a cost of $1.40
per unit.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Units issued on }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \ul1 Feb. 8}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 Units issued on }{\rtlch \fcs1 \af0
Mar. 16}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 \ul1 Aug. 18}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 Units issued }{\rtlch \fcs1 \af0
on Sep.6}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\alang1025 {\trowd
Balance}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\clftsWidth3 \cellx8604 \row }\trowd \trql \trgaph0 \trrh255 \trleft-90 \trautofit1
\clbrdrb \brdrnone \cltxlrtb \clwWidth972 \clftsWidth3 \cellx8604 \pard \plain
\langfe2052 \langfenp2052 \alang1025 \cf1 Jan. 24 Purchase}{\rtlch \fcs1 \af0
\dbch \af2
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Jun. 11
Purchase}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\dbch \af2 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 {\rtlch
\alang1025 \cf1 PTS:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
Date}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
$1.55}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \intbl
\langfe2052 \langfenp2052 \alang1025 \cf1 Mar. 16}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Issued}{\rtlch
\ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025 \ltrch
\keep1 \hyphpar0 \lin0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Oct. 15}{\rtlch
\clbrdrb \brdrnone \cltxlrtb \clwWidth360 \clftsWidth3
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Dec. 29}
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 If a perpetual
inventory record of Raw Material A is maintained on a FIFO basis, 200 units on hand
on August 18 will consist of:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 100 units
@ $1.40, 80 units @ $1.55 and 20 units @ $1.62.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052
\langfenp2052 \alang1025 \cf1 b.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 100 units @ $1.55 and 100 units @ $1.62.}{\rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 200 units @ $1.55.}
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 On a FIFO
basis, 50 of the units on hand at August 18 would have been assigned a cost of
$1.55 per unit and the remaining 150 units on hand at that date would have been
assigned a cost of $1.62 per unit as follows:}{\rtlch \fcs1 \af0 \afs22 \ltrch
\clbrdrb \brdrnone \cltxlrtb \clwWidth1242 \clftsWidth3 \cellx8604 \pard
\langfe2052 \langfenp2052 \alang1025 \cf1 Units in Inventory }{\rtlch \fcs1 \af0
on Aug.18}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
Balance}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qr \li0 \ri0
\cf1 --}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cellx8604 \row }\trowd \trql \trgaph0 \trrh255 \trleft-90 \trautofit1 \trftsWidth1
\alang1025 \cf1 Jan. 24 Purchase}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\clwWidth972 \clftsWidth3 \cellx4086 \clvertalt \clbrdrl
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Jun. 11 Purchase}
{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfenp2052 \alang1025 \cf1 NAT:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 IMA
2B - Cost Management}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 TOP:}{\rtlch
\rtlch \alang1025 \ltrch
Number of Units}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\clwWidth1152 \clftsWidth3 \cellx1062 \clvertalc \clbrdrl
\fs21 \kerning2 \rtlch \alang1025 \ltrch \loch \af4 \hich \af4 \dbch \af2
Issued}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\trpaddfr3 \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone
\cf1 Oct. 15}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\qr \li0 \ri0 \lisb0 \lisa0
a LIFO basis, the 200 units in inventory at August 18 will consist of:}{\rtlch
\langfenp2052 \alang1025 \cf1 50 units @ $1.62 and 150 units @ $1.55.}{\rtlch \fcs1
and 100 units @ $1.55.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\cf1 20 units @ $1.62, 80 units @ $1.55 and 100 units @ $1.40.}{\rtlch \fcs1
\hich \af0 \loch \f0 \lang1033 \langnp1033
\langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qj \li0 \ri0 \lisb0
\cf1 100 units @ $1.40, 60 units @ $1.55 and 40 units @ $1.62.}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 On a LIFO basis, 20
of the units in inventory at August 18 would have been assigned cost per unit of
$1.62, 80 of the units on hand would have been assigned a cost per unit of $1.55
and the remaining 100 units in inventory on that date would have been assigned a
unit cost of $1.40 as follows:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\alang1025 \cf1 }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Number of }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \ul1 Units}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 \par }\pard \plain \qc \li0 \ri0
\dbch \af2 \hich \af0 \loch
\f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Unit
\langfe2052 \langfenp2052 \alang1025 \cf1 Units in Inventory Aug}{\rtlch \fcs1 \af0
. 18}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 Jan. 24 Purchase}{\rtlch \fcs1 \af0 \afs22 \ltrch
\alang1025 \cf1 Jun. 11 Purchase}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qr
\widctlpar \keep1 \hyphpar0 \lin0 \rin0 \tqr \tx-180 \tql \tx0 \itap0 \rtlch \fcs1
\langfenp2052 \alang1025 \cf1 25.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The
Bisset Corporation uses Raw Material A in a manufacturing process. Information as
to balances on hand, purchases, and requisitions of Raw Material A is given in the
\alang1025 \cf1 \ul1 Balance of Units}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\hich \af5
\cltxlrtb \clwWidth360 \clftsWidth3 \cellx6372 \clvertalc \clbrdrl
\qr \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1
\cltxlrtb \clwWidth1422
a moving average basis, the 330 items in inventory on June 11 will have a unit cost
of:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025 \ltrch
\langfenp2052 \alang1025 \cf1 $1.51.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $1.5233.}{\rtlch
\lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \itap0 \rtlch
\fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025 \ltrch \loch \af4
{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch \alang1025 \ltrch \dbch
\alang1025 \cf1 \par }\pard \plain \ql \li0 \ri0 \lisb0 \sa1 \lisa0 \nowidctlpar
\alang1025 \cf1 On a moving average basis, the 330 units in inventory on June 11
would be assigned a cost per unit of $1.4856 as follows:}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Total Cost}
\rtlch \alang1025 \ltrch \dbch \af2 \hich \af0
\cf1 Jan. 24 Purchase}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \ul1 \cell }\pard \plain \qr \li0 \ri0 \lisb0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $605.00}{\rtlch
\keep1 \hyphpar0 \lin0 \rin0 \intbl
\langfe2052 \langfenp2052 \alang1025 \cf1 605.00/400 = 1.5125}{\rtlch \fcs1 \af0
\cf1 Feb. 8 Issue}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 121.00}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Mar. 16 Issue}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\clftsWidth3 \cellx8370 \row }\pard \plain \ql \li0 \ri0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 247.25}{\rtlch
\cf1 Jun. 11 Purchase}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $490.25}{\rtlch
\af2 \hich \af0 \loch \f0 \lang1033
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qr \li0
\langfe2052 \langfenp2052 \alang1025 \cf1 \par }\pard \plain \ql \li0 \ri-90 \lisb0
\lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin-90 \itap0 \rtlch \fcs1 \af0 \afs22
\cf1 Average cost per unit for the June 11 inventory would be $1.4856 ($490.25 /
330 units).}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Hard}{\rtlch \fcs1 \af0
\langfenp2052 \alang1025 \cf1 The LIFO inventory cost flow method may be applied
to which of the following inventory systems?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 \par }\trowd \trql \trgaph0 \trleft180
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Periodic}
Perpetual}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\alang1025 {\trowd \trql \trgaph0 \trleft180 \trautofit1 \trftsWidth1 \trftsWidthB3
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 No No}{\rtlch
\langfenp2052 \alang1025 \cf1 No Yes}{\rtlch \fcs1 \af0 \afs22 \ltrch
\alang1025 \cf1 Yes \uc1 \u160 ?Yes}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\qj \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \aspalpha \aspnum
\adjustright \lin0 \rin0 \intbl \itap1 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21
\alang1025 \cf1 Yes No}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The LIFO method is
appropriate for both periodic and perpetual inventory systems.}{\rtlch \fcs1
\alang1025 \cf1 In a period of rising prices, the use of which of the following
cost flow methods would result in the lowest cost of goods sold?}{\rtlch \fcs1 \af0
\cf1 FIFO}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 LIFO}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Weighted average cost}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Moving average
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Under the
FIFO method, the earliest purchases, which were least expensive, would be
considered to be the goods sold.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Hard}{\rtlch
\li0 \ri0 \lisb0 \sa1 \lisa0 \nowidctlpar
\hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Just-in-time
production techniques:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Utilize inventory
buffers between work centers.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Were first utilized
by U.S. manufacturers and later exported to Japan.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Produce goods for
inventory with the hope that demand for these goods will then be created.}
\cf1 Require a high degree of cooperation and coordination between supplier and
manufacturer.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 For a
just-in-time inventory system to be effective, suppliers must be in close proximity
to customers to enable the delivery of raw materials to coincide with production's
need for them.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch
\ltrch \fcs0 \fs22 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Inventory levels
for firms using JIT inventory systems compared to firms not using JIT will be:}
\langfenp2052 \alang1025 \cf1 Higher for both work in process and finished goods.}
\cf1 Higher for work in process and finished goods but lower for raw materials.}
\cf1 Lower for raw materials, work in process, and finished goods.}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Higher for finished
goods but lower for raw materials and work in process.}{\rtlch \fcs1 \af0 \afs22
\dbch \af2 \hich \af4
\alang1025 \cf1 Manufacturers using just-in-time inventory systems will maintain
lower inventory levels for all three types of inventories.}{\rtlch \fcs1 \af0 \afs2
\alang1025 \cf1 AACSB - Reflective}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Listed below are
steps of purchasing and receiving materials:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025
\langfe2052 \langfenp2052 \alang1025 \cf1 1. The receiving clerk prepares a
receiving report.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \par }\pard \plain \ql \fi-450 \li450 \ri0 \lisb0
\cf1 2. Purchase requisitions are prepared to notify the purchasing agent that
additional materials
are needed.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 3.
The purchase of merchandise is recorded by the accounting department.}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 4. The
purchasing agent completes a purchase order.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\alang1025 \cf1 In which order would these events typically happen?}{\rtlch
\langfenp2052 \alang1025 \cf1 4, 2, 3, 1}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 2, 4, 3, 1}
\cf1 2, 4, 1, 3}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\clvertalt \clbrdrl \brdrnone \clbrdrr \brdrnone
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 4, 2, 1, 3}
storeroom keeper will prepare a purchase requisition to notify the purchasing agent
that additional materials are needed. The purchasing agent will then complete a
purchase order and send it to the vendor. When the goods are received, the
receiving clerk will prepare a receiving report which is compared to the vendor\uc1
\u8217 ?s invoice and the purchase order. At that time, the accounting department
will record the purchase of the inventory items in the general ledger.}{\rtlch
\cf1 \par }\pard \plain \ql \li0 \ri0 \lisb0 \sa1 \lisa0 \nowidctlpar \hyphpar0
\alang1025 \cf1 The duties of the purchasing agent would include all of the
following }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \b1 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 except}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 :}{\rtlch \fcs1
\langfenp2052 \alang1025 \cf1 Placing purchase orders.}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Counting and
identifying materials received.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Compiling
information that identifies vendors and prices.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfenp2052 \alang1025 \cf1 d.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Verifying invoices and approving them for payment.}
receiving clerk is responsible for counting and identifying the materials
received.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch \alang1025
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 32.}{\rtlch
\langfenp2052 \alang1025 \cf1 The employee who is responsible for preparing
purchase requisitions is }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \b1 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 most}{\rtlch \fcs1 \af0
likely the:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 Storeroom keeper.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Purchasing agent.}
\cf1 Production supervisor.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Receiving clerk.}
storeroom keeper is usually the employer responsible for preparing purchase
requisitions when the stock is running low to notify the purchasing agent that the
inventory needs to be replenished.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2
\alang1025 {\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 33.}
\langfenp2052 \alang1025 \cf1 A receiving report would include all of the following
information }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \b1 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 except}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 :}{\rtlch \fcs1
\langfenp2052 \alang1025 \cf1 What the shipment contained.}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The purchase order
number.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cf1 The customer.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 The date the materials were received.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfe2052
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 It is unlikely the
receiving report would contain the customer name; however, a listing of what the
shipment contained, the purchase order number and the date of the receipt would be
necessary information used in matching the receiving report to the vendor\uc1
\u8217 ?s invoice and the purchase order.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0
Managment}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\alang1025 \cf1 AACSB - Reflective}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The accounting
system used with JIT manufacturing is called:}{\rtlch \fcs1 \af0 \afs22 \ltrch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Backflush
costing.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 The push system.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Perpetual inventory costing.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 First-in, first-
out.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025
\cf1 ANS:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 A}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The accounting
system used with JIT is called backflush costing.}{\rtlch \fcs1 \af0 \afs2
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 In a backflush
accounting system, a single account is used for the following:}{\rtlch \fcs1
\loch \af4 \hich \af4 \dbch
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Work
in process and finished goods inventories.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Finished goods
inventories and cost of goods sold.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Factory overhead
and raw materials.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Raw materials and work in process inventories.}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 In a backflush
accounting system, a single account, Raw and In Process is used because in JIT
manufacturing, materials are delivered directly into production.}{\rtlch \fcs1 \af0
\alang1025 \cf1 \par }\pard \plain \ql \li0 \ri0 \lisb0 \sa1 \lisa0
\nowidctlpar \hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\alang1025 \cf1 The general ledger entry to record the purchase of materials is:}
\langfenp2052 \alang1025 \cf1 Debit-Purchases Received}{\rtlch \fcs1 \af0 \afs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Credit-Purchase Orders
Outstanding}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Debit-Materials}
Credit-Purchase Orders Outstanding}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\cf1 Debit-Purchases Received}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Credit-Accounts Payable}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Debit-Materials}
Credit-Accounts Payable}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The Materials
account is debited and Accounts Payable is credited when materials are purchased.
Purchase orders are not recorded in the general ledger.}{\rtlch \fcs1 \af0 \afs2
\rin0 \tqr \tx-180 \tql \tx0 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\fs21 \kerning2 \rtlch \alang1025 \ltrch \loch \af4 \hich \af4 \dbch \af2
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The inventory
method which results in the most recent costs being assigned to inventory on hand
at the end of the period is:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 First-in, first-
out.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cf1 Last-in, first-out.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\cf1 Last-in, last-out.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\cf1 Moving average.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\f0 \lang1033 \langnp1033 \langfe2052
\langfenp2052 \alang1025 \cf1 A}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\alang1025 \cf1 First-in, first-out (FIFO) results in the most recent costs being
assigned to ending inventory because the oldest costs are assigned to issues
first.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch \alang1025
\alang1025 \cf1 The inventory method which results in the most recent cost being
assigned to cost of goods sold is:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\trpaddr45 \trpaddfl3 \trpaddft3 \trpaddfb3
\cf1 First-in, first-out.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\cf1 Last-in, first-out.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\cf1 Last-in, last-out.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\cf1 Moving average.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\af0 \loch
\f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 B}{\rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Last-in,
first-out (LIFO) results in the most recent costs being assigned to cost of goods
sold.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch \alang1025 \ltrch
\alang1025 \cf1 Under a backflush accounting system, the following entry is made
when products are completed:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\hich \af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Debit-
Finished Goods}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Credit-Work In Process}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\cf1 Debit-Cost of Goods Sold}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Credit-Raw and In Process}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Credit-
Conversion Costs}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Debit-Finished
Goods}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cf1 Credit-Raw and In Process}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Credit-Conversion Costs}{\rtlch \fcs1 \af0
\brdrnone \clbrdrb \brdrnone
\cltxlrtb \clwWidth8100 \clftsWidth3 \cellx8415 \row }\pard \plain \ql \li0
\langfenp2052 \alang1025 \cf1 d.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Debit-Cost of Goods Sold}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Credit-
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Finished goods are
debited when goods are completed under backflush accounting, similar to other
accounting systems. However, work in process is not credited, as that account does
not exist under backflush accounting.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2
\ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025 \ltrch \loch \af4 \hich
\af4 \dbch \af2 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 {\rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Sully Company uses
3,000 yards of canvas each day to make tents. It usually takes ten days from the
time Sully orders the material to when it is received. If Sully\uc1 \u8217 ?s
desired safety stock is 12,000 yards, what is Sully\uc1 \u8217 ?s order point?}
\langfenp2052 \alang1025 \cf1 12,000 yards}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 15,000 yards}
\cf1 30,000 yards}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 42,000 yards}
\langfenp2052 \alang1025 \cf1 3,000 (daily usage) x 10 (lead time)}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 30,000 }{\rtlch
\alang1025 \cf1 Safety stock}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 \ul1 12,000}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 }{\rtlch \fcs1 \af0
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Order
point}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cf1 \uldb3 42,000}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qj \li0 \ri0 \lisb0
\lisa0 \nowidctlpar \aspalpha \aspnum \adjustright \lin0 \rin0 \intbl \itap1
\lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \tql \tx0 \tql \tx634 \tql \tx1958
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 IMA 3A - Strategic
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Order costs would
include all of the following }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \b1 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 except}{\rtlch \fcs1 \af0
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 :}
\kerning0 \rtlch
\alang1025 \cf1 Receiving clerk\uc1 \u8217 ?s wages.}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Storeroom
keeper\uc1 \u8217 ?s wages.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Purchasing
department\uc1 \u8217 ?s telephone bill.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Transportation in.}
storeroom keeper\uc1 \u8217
?s wages would be a storage cost.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Carrying costs
would include all of the following }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \b1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 except}{\rtlch
\alang1025 \cf1 :}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 Warehouse rent.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\alang1025 \ltrch \loch \af4 \hich \af4 \dbch \af2 \lang1033
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Inspection
employees\uc1 \u8217 ? wages.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Losses due to
obsolescence.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Property taxes.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
Inspection would typically happen upon receipt of goods making this an order cost.}
\langnp1033 \langfe2052 \langfenp2052 \alang1025 {\rtlch
\alang1025 \cf1 The following data pertains to Western Company\uc1 \u8217 ?s
materials inventory:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Number of pounds
required annually}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 16,000}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\alang1025 \cf1 Cost of placing an order}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\ltrch \loch \af4 \hich \af4 \dbch
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $20}
\alang1025 \cf1 Annual carrying cost per pound of material}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $4}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 What is Western
Company\uc1 \u8217 ?s EOQ?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 4,000
pounds}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cf1 800 pounds}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 400 pounds}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qj \li0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 200 pounds}
\loch \af0 \dn26 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1
{\*\shppict {\pict {\*\picprop \shplid1025 {\sp {\sn shapeType}{\sv 75}}{\sp {\sn
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posrelv}{\sv 1}}{\sp {\sn fLayoutInCell}{\sv 1}}}\piccropl0 \piccropr0
\piccropt0 \piccropb0 \picscalex100 \picscaley100 \picw324 \pich57 \picwgoal3899
\pichgoal689 \pngblip {\*\blipuid
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\dbch \af2 \hich \af4 \loch \af0 \dn22 \lang1033 \langnp1033 \langfe2052
\langfenp2052 \alang1025 \cf1 {\*\shppict {\pict {\*\picprop \shplid1026 {\sp {\sn
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1}}}\piccropl0 \piccropr0 \piccropt0 \piccropb0 \picscalex100 \picscaley100
\picw191 \pich54 \picwgoal2294 \pichgoal659 \pngblip {\*\blipuid
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b675c19cd45e6c334d865ad9e8bf68e0e0b39fa579afde87ff3e9cb41777a81c6f79261531000000004
9454e44ae426082}}}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 = 400}{\rtlch \fcs1 \af0 \afs2 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 All of the
following methods may be used to account for the revenue from scrap sales }
{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \b1 \fs22 \kerning0 \rtlch \alang1025 \ltrch
\alang1025 \cf1 except}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 :}{\rtlch \fcs1 \af0 \afs22 \ltrch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Credit
Factory Overhead, if the scrap cannot be identified with a specific job.}{\rtlch
\cf1 Credit Materials, if the scrap would have been able to be recycled.}{\rtlch
\cf1 Credit Work in Process, if the scrap is identified with a specific job.}
\cf1 Credit Scrap Revenue, which is included in the \uc1 \u8220 ?Other
Income\uc1 \u8221 ? section of the income statement.}{\rtlch \fcs1 \af0 \afs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 B}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Scrap is a by-
production. It would not be appropriate to credit materials because materials
would have been credited when the materials were put into production. Depending on
the circumstances, it would be appropriate to credit Factory Overhead, Work in
Process or Scrap Revenue.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0
\alang1025 \cf1 PTS:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Harrison Industries
produces 4,000 lunch boxes each day. The average number of units in work in
process is 12,000, having an average cost of $60,000. The annual carrying costs
relating to inventory are 10%.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
Consultants have determined that the work in process could be reduced by as much as
a third by rearranging the factory floor. What is the current throughput time?}
\langfenp2052 \alang1025 \cf1 Eight hours}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 One day}{\rtlch
\cf1 Two days}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Three days}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
Throughput is the amount of time it takes a unit to get through the system. }
\par }\pard \plain \ql \li0 \ri0 \lisb0
\langfenp2052 \alang1025 \cf1 \ul1 Units in work in process}{\rtlch \fcs1 \af0
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 =
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 = 3 days.}{\rtlch \fcs1
\alang1025 \cf1 Daily production}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Harrison
Industries produces 4,000 lunch boxes each day. The average number of units in
work in process is 12,000, having an average cost of $60,000. The annual carrying
costs related to inventory are 10%.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
a third by rearranging the factory floor. What would the throughput time be if
Harrison implements the recommended changes?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Twelve
hours}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cf1 One day}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Two days}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Three days}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone \clbrdrb \brdrnone
\cltxlrtb \clwWidth8100 \clftsWidth3 \cellx8415 \row }\pard \plain \ql \li0
\ri0 \lisb0 \lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0
\alang1025 \cf1 Throughput is the amount of time it takes a unit to get through the
system. }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 \ul1 Units in work in process}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 = }{\rtlch \fcs1 \af0
\langfenp2052 \alang1025 \cf1 = 3 days x 1/3 = 1 day reduction}{\rtlch \fcs1
\alang1025 \cf1 Daily production}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Three days less one
day = two days}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch
\dbch \af2 \hich
\tab }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Harrison Industries
produces 4,000 lunch boxes each day. The average number of units in work in
process is 12,000, having an average cost of $60,000. The annual carrying costs
related to inventory are 10%.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
a third by rearranging the factory floor. What would the reduction in annual
carrying costs be if Harrison is able to implement the recommended changes?}{\rtlch
\langfenp2052 \alang1025 \cf1 $2,000}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $1,500}{\rtlch
\af4 \dbch \af2 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 {\trowd
\cf1 c.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Carrying
cost = Average work in process inventory x carrying cost percentage}{\rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Existing situation
- $60,000 x 10% = $6,000 }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Inventory
reduction $60,000 x 1/3 = $20,000 reduction }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 New average inventory = $60,000 - $20,000
= $40,000 x 10% = $4,000}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \par
\langfe2052 \langfenp2052 \alang1025 \cf1 $6,000 - $4,000 = $2,000 reduction}
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The journal entry
to record undamaged direct materials returned to the storeroom would be:}{\rtlch
\langfenp2052 \alang1025 \cf1 a.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 Debit - Materials}{\rtlch \fcs1 \af0
Overhead}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Credit - Work in Process}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\cf1 Debit - Materials}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 Credit - Factory Overhead}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Debit - Materials}
\langfenp2052 \alang1025 \cf1 Credit - Work in Process}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The entry to record
the return of direct materials to the storeroom is the reverse of the entry that is
made when the materials are issued to production.}{\rtlch \fcs1 \af0 \afs2
}\pard \plain \ql \li-630 \ri0 \lisb0 \lisa0 \nowidctlpar \hyphpar0 \lin-630
\langfe2052 \langfenp2052 \alang1025 {\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \b1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 PROBLEM}{\rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The Reardon Company
manufactures novelty toys. In June, 400 of these toys were completed on Job Order
No. 2525. On final inspection, 20 toys were rejected and transferred to the
spoiled goods inventory to be sold at $2 each.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\alang1025 \cf1 Costs recorded on Job Order No. 2525 follow:}{\rtlch \fcs1 \af0
\langfe2052 \langfenp2052 \alang1025 \cf1 1,400}{\rtlch \fcs1 \af5 \afs20 \ltrch
overhead}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Prepare
the journal entries to record the following:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 \par }\trowd \trql \trgaph0 \trleft0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Charges for
materials, labor, and factory overhead for Job Order No. 2525}{\rtlch \fcs1 \af0
\langnp1033 \langfe2052 \langfenp2052 \alang1025 {\trowd \trql \trgaph0 \trleft0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Cost of the spoiled
work, the transfer of the cost of the good toys to Finished Goods, and the sale of
the imperfect toys, if the loss on spoilage is charged to all jobs worked on during
the period}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\alang1025 {\trowd \trql \trgaph0 \trleft0 \trautofit1 \trftsWidth1
\langfenp2052 \alang1025 \cf1 Cost of the spoiled work, the transfer of the cost of
the good toys to Finished Goods, and the sale of the imperfect toys, if the loss on
spoilage is to be charged to Job Order No. 2525 only. (Round the new unit cost to
the nearest whole cent, and assume part b, above, has not occurred.)}{\rtlch
{\trowd \trql \trgaph0 \trleft0 \trautofit1 \trftsWidth1 \trftsWidthB3
\lisb0 \lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0 \afs22
}\pard \plain \ql \li0 \ri0 \lisb0 \sa1 \lisa0 \nowidctlpar \hyphpar0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 ANS:}{\rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (a)}{\rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Work in
Process ($3,800/400 = $9.50)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 3,800}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Materials}{\rtlch \fcs1
\cf1 Payroll (direct labor)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfe2052 \langfenp2052 \alang1025 \cf1 Factory Overhead}{\rtlch \fcs1 \af0
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (b)}
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Spoiled
Goods (20 }{\rtlch \fcs1 \af6 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\ltrch \dbch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $2)}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Factory Overhead}
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Work in Process (20 }
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $9.50)}{\rtlch \fcs1 \af0
\cf1 \cell }\pard \plain \ql \li0 \ri0 \lisb0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Finished Goods (380
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $9.50)}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 3,610}{\rtlch \fcs1
\langfe2052 \langfenp2052 \alang1025 \cf1 Work in Process}{\rtlch \fcs1 \af0 \afs22
\langfe2052 \langfenp2052 \alang1025
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Cash}{\rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Spoiled Goods}{\rtlch
\cf1 (c)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Spoiled Goods}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Work in Process}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Finished Goods (380
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $9.90*)}{\rtlch \fcs1
\langfe2052 \langfenp2052 \alang1025 \cf1 Work in Process}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Cash}{\rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Spoiled Goods}{\rtlch
\langfe2052 \langfenp2052 \alang1025 \cf1 * }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfenp2052 \alang1025 \cf1 \ul1 $3,800 - $40}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \uldb3 $9.895}
\alang1025 \cf1 rounded}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\brdrnone \cltxlrtb \clwWidth2107 \clftsWidth3 \cellx2557 \clvmgf \clvertalc
\cltxlrtb \clwWidth413 \clftsWidth3 \cellx2970 \clvmgf \clvertalc \clbrdrl
\clvmrg \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone
\clbrdrb \brdrnone \cltxlrtb \clwWidth413 \clftsWidth3 \cellx2970 \clvmrg
\clbrdrb \brdrnone \cltxlrtb \clwWidth2107 \clftsWidth3 \cellx2557 \clvmrg
\brdrnone \cltxlrtb \clwWidth413 \clftsWidth3 \cellx2970 \clvmrg \clvertalc
\alang1025 \cf1 \tab }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The following accounts are
maintained by the Sprague Manufacturing Company in its general ledger: Materials,
Work in Process, Factory Overhead, and Accounts Payable. The materials account had
a debit balance of $40,000 on November 1. A summary of material transactions for
November shows:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \par }\trowd \trql \trgaph0 \trleft0 \trautofit1
\langfenp2052 \alang1025 \cf1 (1)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Materials acquired on account, $62,000}{\rtlch
\alang1025 \cf1 (2)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 Direct materials issued, $58,500}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (3)}{\rtlch
\langnp1033
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Direct materials
returned to storeroom, $1,200}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfe2052 \langfenp2052 \alang1025 {\trowd \trql \trgaph0 \trleft0 \trautofit1
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Indirect
materials issued, $3,600}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfenp2052 \alang1025 \cf1 Indirect materials returned to storeroom, $550}
\alang1025 \cf1 Materials on hand were $200 less than the stores ledger balance}
\alang1025 \cf1 \par }\trowd \trql \trgaph0 \trleft0 \trautofit1 \trftsWidth1
\langfenp2052 \alang1025 \cf1 Prepare journal entries to record the materials
transactions.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\brdrnone \clbrdrb \brdrnone \cltxlrtb \clwWidth393
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 b.}
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Post the
journal entries to T-accounts.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 What is the balance
of the materials account on November 30?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\plain \ql \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \itap0 \rtlch
\langfenp2052 \alang1025 \cf1 (a)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Materials}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 62,000}{\rtlch \fcs1 \af5 \afs20
\langfe2052 \langfenp2052 \alang1025 \cf1 \uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}
\alang1025 \cf1 Accounts Payable}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\keep1 \hyphpar0 \lin0 \rin0 \intbl \itap1 \rtlch
\fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025 \ltrch \loch \af4
\alang1025 \cf1 Work in Process}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 58,500}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0
\alang1025 \cf1 Materials}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 58,500}
\clftsWidth3 \cellx7200 \clvertalc
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (3)}
\alang1025 \cf1 Work in Process}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\keep1 \hyphpar0 \lin0 \rin0 \intbl \itap1 \rtlch \fcs1 \af0 \afs22
\itap1 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch
\alang1025 \cf1 Factory Overhead}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\alang1025 \cf1 (b)}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\alang1025 \cf1 \ul1 \uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Materials
\alang1025 \cf1 \uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ? }{\rtlch \fcs1 \af5
\uc1 \u160 ?\uc1 \u160 ?Accounts Payable\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1
\u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20 \ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 Bal.\uc1 \u160 ?\uc1 \u160 ?\uc1
\u160 ?\uc1 \u160 ?40,000 | (2) 58,500 | (1) 62,000}{\rtlch
(1)\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?62,000 | (4) 3,600}
(3)\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?1,200 |
(6) 200}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
(5)\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 550}{\rtlch
\alang1025 \cf1 | }{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 \uc1 \u160 ?\uc1 \u160 ?\uc1
\langfe2052 \langfenp2052 \alang1025 \cf1 \uc1 \u160 ?\uc1 \u160 ?\uc1
\u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}{\rtlch \fcs1 \af5
103,750 | 62,300}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\u160
?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?}
\alang1025 \cf1 \ul1 Work in Process }{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 }
\alang1025 \cf1 \ul1 Factory Overhead\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1
\ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \itap0
\langfenp2052 \alang1025 \cf1 (2) 58,500 | (3) 1,200 (4) 3,600 |
(5) 550}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\af5 \loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \uc1
\u160 ? (6) 200 |}{\rtlch \fcs1 \af5
\langfe2052 \langfenp2052 \alang1025 \cf1 (c) The balance of the materials account
=\uc1 \u160 ?$103,750 - $62,300}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\alang1025 \cf1 \uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1
\u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1 \u160 ?\uc1
\u160 ?=\uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \uldb3 $\uc1 \u160 ?41,450}{\rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \tab
}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 The Reddog Company predicts
that 3,200 units of material will be used during the year. The expected daily
usage is 15 units, there is an expected lead time of 10 days, and there is a safety
stock of 200 units. The material is expected to cost $4 per unit. It is estimated
that it will cost $25 to place each order. The annual carrying cost is $1 per
unit.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
}\trowd \trql \trgaph0 \trleft0 \trautofit1 \trftsWidth1 \trftsWidthB3
\cf1 Compute the order point.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Determine the most
economical order quantity by use of the formula.}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Compute the total
cost of ordering and carrying at the EOQ point.}{\rtlch \fcs1 \af0 \afs22 \ltrch
\plain \ql \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \itap0 \rtlch
\langfenp2052 \alang1025 \cf1 \par }\pard \plain
\ql \li0 \ri0 \lisb0 \sa1 \lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \itap0
\alang1025 \cf1 ANS:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \par }\trowd \trql \trgaph0 \trleft-
\cf1 (a)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Order point}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Expected usage during lead time + Safety stock}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (15 units }
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 10 days) + 200}{\rtlch \fcs1
\dbch \af2 \hich \af4 \loch
\f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1
\langfe2052 \langfenp2052 \alang1025 \cf1 =}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 \uldb3 350 units}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (b)}{\rtlch
\loch \af0 \dn26 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1
{\*\shppict {\pict {\*\picprop \shplid1027 {\sp {\sn shapeType}{\sv 75}}{\sp {\sn
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fShadowOK}{\sv 1}}{\sp {\sn fFilled}{\sv 0}}{\sp {\sn lineStyle}{\sv 0}}{\sp {\sn
fLine}{\sv 0}}{\sp {\sn wzName}{\sv Picture 3}}{\sp {\sn posrelh}{\sv 1}}{\sp {\sn
posrelv}{\sv 1}}{\sp {\sn fLayoutInCell}{\sv 1}}}\piccropl0 \piccropr0
\piccropt0 \piccropb0 \picscalex100 \picscaley100 \picw324 \pich57 \picwgoal3899
\pichgoal689 \pngblip {\*\blipuid
62bf148b62bf148b62bf148b62bf148b}89504e470d0a1a0a0000000d49484452000001040000002e04
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026b4944415458c3ed980b72c3200c447583bdff2df706144920202698b689ddce846612c2473c4b023
695747b91bb014e11e4fde50c01f77be183900b2f20f8b708df2743bc1d2d9d2348cca4c80ef70491a8
6f130f9c22b019447d104e47aebcf43b2f844146fd0c0187c57e8f20c8e17004e4e32c7b4612d5b1da2
cd62f5ed76f86001ba17fda018d83d7ec38f48a5ada4240898621e8da79925a28edb94a7dd103555af3
b83ca2f47a17b546252815702f17dc7f400d046c0551f3de648bd494a1b732b5b591824ef319ad09dc0
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e8b91c81b723f80efa535ef0fcac087cb378c55fc98572b3cdbd7011c2d34db9564793de6de47ee0f26
8e2b35985fe555e583cd71a614f419ecbcff151641cd44f2717565e88d07f9523820a25533d7e2da4b8
23f2f96f37025083dacb29174836d57494599167083d260604bbe551c40e3ba16202ca88689224aed62
aa7124327a5329a78ee85342cfa88305cf38848f9e1669d088426a73ac1d494cc4f104406044ab5ef35
d8e9f288e072aaa995ef22b04728cee520383afb0d21b9ae1de5d4eb11aa6c6a30be6c5553839c2a171
1cb35e0daa9db604b04b4ba98f841881d4a4b7c11974c5a75d534c8a9ba232c1d75ef9815ec204c7e14
2d0be3e371dedace0b11703b42583a8860cadec44999fd1a7f43f9209c215c239afec13f80af285f404
27202b97530c30000000049454e44ae426082}}}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\dbch \af2 \hich \af4 \loch \af0 \dn23 \lang1033 \langnp1033 \langfe2052
\langfenp2052 \alang1025 \cf1 {\*\shppict {\pict {\*\picprop \shplid1028 {\sp {\sn
shapeType}{\sv 75}}{\sp {\sn fFlipH}{\sv 0}}{\sp {\sn fFlipV}{\sv 0}}{\sp {\sn
fLockAspectRatio}{\sv 1}}{\sp {\sn WrapText}{\sv 0}}{\sp {\sn fLineOK}{\sv 1}}{\sp
{\sn f3DOK}{\sv 0}}{\sp {\sn fShadowOK}{\sv 1}}{\sp {\sn fFilled}{\sv 0}}{\sp {\sn
lineStyle}{\sv 0}}{\sp {\sn fLine}{\sv 0}}{\sp {\sn wzName}{\sv Picture 4}}{\sp
{\sn posrelh}{\sv 1}}{\sp {\sn posrelv}{\sv 1}}{\sp {\sn fLayoutInCell}{\sv
1}}}\piccropl0 \piccropr0 \piccropt0 \piccropb0 \picscalex100 \picscaley100
\picw274 \pich56 \picwgoal3299 \pichgoal674 \pngblip {\*\blipuid
497e4c50497e4c50497e4c50497e4c50}89504e470d0a1a0a0000000d49484452000000dc0000002d04
0300000037ba180e00000001735247420240c07dc500000030504c54450000008000000080008080000
018e4944415458c3ed980bae84300845d9c1ddff2ed94107e877d2af1934e6e57562a25439052eea48e
1d141afc2d195819f71071e3ca3fbd33876a6bd19e700dfe3aabe658fe57ca6c650ac276d7080e31214
338b7450e5c3795e6c7c16fb41325b5c687165de1b47d094d9112c9766487de28c43ce28254b3130428
ad7171780e49d3312cdbc27aed64fb389d69af7bc70489b05a35229ec1a1d5c7145eda5116aedbc1b41
1d136521ca260fb5aa4c9603e8fc419ba7c5909cae2753f6dc25b3bb647146631e2f8174262625e5e9c
0d97a05c134dc2518199724c1fde55bdc646081e35b71a408292f5bd5e547ee386e5a9f95a44033f4d1
45ed641c9fbf881988e2eabf7071df7ae896da2973801301190e93e8ae3fbef3c5c3e802af1ba1c79d2
ea0c511220e5abb559bf7ce292f29bd32cc71a5cd49a4229e452c7a579abae701ceeed208254597934d
d3239ae0821fae393429f5b8e08a6b0746b57b16a785bb09377a623ad76e83f396cad740e7ee615cea6
edeb6b913eed73f412b1ce3d4cb3f6e8b73ff10f0b6af46dee303b3f0c9bc2f5d4ffd0000000049454e
44ae426082}}}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\trftsWidthA3 \trpaddl108 \trpaddr108 \trpaddfl3
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (c)}{\rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Annual
ordering cost}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Number of orders }{\rtlch \fcs1 \af6 \afs22 \ltrch \fcs0 \fs22 \kerning0
Cost per order}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 3,200 Annual usage}{\rtlch \fcs1
\cf1 \ul1 \cell }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1
\u61620 ?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\clwWidth2160 \clftsWidth3 \cellx5400 \clvmrg \clvertalc \clbrdrl \brdrnone
\clbrdrl \brdrnone \clbrdrr
\alang1025 \cf1 400 EOQ}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\cellx5850 \clvmrg \clvertalc \clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt
\af0 \afs22 \ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 8 }{\rtlch \fcs1 \af6 \afs22 \ltrch \fcs0
\alang1025 \cf1 $25 = $200}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Annual carrying
\cf1 Average inventory }{\rtlch \fcs1 \af6 \afs22 \ltrch \fcs0 \fs22 \kerning0
Carrying cost per unit}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard
\clbrdrl \brdrnone \clbrdrr \brdrnone \clbrdrt \brdrnone \clbrdrb
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Average inventory}
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (1/2 }
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 EOQ)}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 +}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Safety Stock}
\langfe2052 \langfenp2052 \alang1025 \cf1 (1/2 }{\rtlch \fcs1 \af6 \afs22 \ltrch
\alang1025 \cf1 400)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 +}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\ltrch \fcs0 \fs21 \kerning2
\ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Annual carrying cost}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 400 }{\rtlch \fcs1 \af6 \afs22 \ltrch
\alang1025 \cf1 $1.00 = $400}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\dbch \af2 \hich \af0 \loch \f0 \lang1033
\cf1 IMA 3A - Strategic Planning}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\alang1025 \cf1 Hawkins Company, which uses backflush costing, had the following
transactions during the month of June:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\alang1025 \cf1 \par }\trowd \trql \trgaph0 \trleft0 \trautofit1 \trftsWidth1
\langfenp2052 \alang1025 \cf1 (a)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Purchased raw materials on account, $350,000.}{\rtlch
\alang1025 \cf1 Requisitioned raw materials to production, $330,000.}{\rtlch
\alang1025 \cf1 (c)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 Distributed direct labor costs, $52,300.}{\rtlch \fcs1 \af0
\afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025 \ltrch \dbch
\alang1025 \cf1 (d)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 Manufacturing overhead incurred, $107,000. (Use Various Credits
for the account in the credit part of the entry.)}{\rtlch \fcs1 \af0 \afs22
\langfe2052 \langfenp2052 \alang1025 \cf1 Prepare journal entries to record the
above transactions.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (a)}{\rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Raw and
In-Process}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0 \intbl \itap1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Accounts Payable}
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (b)}
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 No entry}
\langfe2052 \langfenp2052 \alang1025
\cf1 (c)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Conversion Costs}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Payroll}{\rtlch \fcs1 \af0
\langfe2052 \langfenp2052
\alang1025 \cf1 (d)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 Conversion Costs}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfe2052 \langfenp2052 \alang1025 \cf1 Various Credits}{\rtlch \fcs1 \af0 \afs22
\lisa0 \nowidctlpar \hyphpar0 \lin0 \rin0 \tql \tx0 \tql \tx634 \tql \tx1958
\alang1025 \cf1 The materials account of the Flynn Company reflected the following
changes during May:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfenp2052 \alang1025 \cf1 Balance, May 1}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 500 units @ $10}{\rtlch \fcs1 \af5 \afs20
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Received,
May 5}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 \cell }\pard \plain \ql \li0
\langfenp2052 \alang1025 \cf1 300 units @ $12}{\rtlch \fcs1 \af5 \afs20 \ltrch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Issued,
\cf1 400 units}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\alang1025 \cf1 Received, May 15}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 200 units @ $15}{\rtlch \fcs1 \af5 \afs20 \ltrch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Issued,
\cf1 300 units}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Calculate the
ending inventory at May 31 and the cost of the units issued in May using each of
the following methods:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 (a) First in, first out (FIFO)}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 (b) Last in, first out (LIFO)}{\rtlch
\hyphpar0 \lin0 \rin0 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (c) Moving average}
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (a)
FIFO:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\alang1025 \cf1 \ul1 Received }{\rtlch \fcs1 \af0 \afs22
\alang1025 \cf1 \ul1 Issued }{\rtlch \fcs1 \af0 \afs22
\alang1025 \cf1 \ul1 Balance }{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Quantity}
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Unit }
\alang1025 \cf1 \ul1 Price}{\rtlch \fcs1 \af0 \afs20 \ltrch \fcs0 \fs20
\langfenp2052 \alang1025 \cf1 \par }\pard \plain \qc \li0 \ri0 \lisb0 \lisa0
\cf1 \ul1 Amount}{\rtlch \fcs1 \af0 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\dbch \af2 \lang1033 \langnp1033
\langfenp2052 \alang1025 \cf1 5/1}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\cltxlrtb \clwWidth1026 \clftsWidth3 \cellx8370 \row }\trowd \trql \trgaph0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 5/5}{\rtlch
\loch \f5 \lang1033 \langnp1033
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025
\cf1 5/10}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\itap1 \rtlch \fcs1 \af0 \afs22 \ltrch
\langfenp2052
\cltxlrtb \clwWidth936 \clftsWidth3 \cellx5652
\lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0
\fs21 \kerning2 \rtlch \alang1025 \ltrch \loch \af4
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Ending Inventory:}
300 units having a total cost of $4,200}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 (100 units x $12) + (15 units x
$15)}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Cost of Units
Issued:}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\af5 \loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 700
units having a total cost of $7,400 (4,000 + 1,000 + 2,400)}{\rtlch \fcs1 \af5
\langfe2052 \langfenp2052 \alang1025 \cf1 (b) LIFO:}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 }{\rtlch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025
\cf1 }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \ul1 Issued }{\rtlch
\alang1025 \cf1 }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Balance
\cltxlrtb \clwWidth1026 \clftsWidth3 \cellx8370 \pard \plain \qc \li0 \ri0
Date}{\rtlch \fcs1 \af0 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Amount}{\rtlch
\langfenp2052 \alang1025 \cf1 3,600}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\alang1025 \cf1 300}{\rtlch
\clbrdrb \brdrnone \cltxlrtb \clwWidth936
\loch \f5 \lang1033 \langnp1033
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \cell
having a total cost of $3,000 (300 x $10)}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0
\alang1025 \cf1 Cost of Units Issued:}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0
\langfe2052 \langfenp2052 \alang1025 \cf1 700 units having a total cost of $8,600 }
(1,000 + 3,600 + 1,000 + 3,000)}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (b)
Moving Average:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\alang1025 \cf1 \ul1 Issued }{\rtlch \fcs1 \af0 \afs22
\alang1025 \cf1 \ul1 Balance }{\rtlch \fcs1 \af0
{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Unit }{\rtlch \fcs1
\cf1 \ul1 Price}{\rtlch \fcs1 \af0 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Amount}{\rtlch
\cf1 \cell }\pard \plain \qr \li0 \ri0 \lisb0
\cell }\pard
\plain \qr \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0 \lin0 \rin0
\alang1025 \cf1 10.75}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\cf1 10.75}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch \alang1025
\dbch \af2 \lang1033
\langfe2052 \langfenp2052 \alang1025 \cf1 5/25}{\rtlch \fcs1 \af5 \afs20 \ltrch
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 12.17}
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 12.17}
having a total cost of $3,650}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\alang1025 \cf1 Cost of Units Issued:}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0
\ltrch
\langfe2052 \langfenp2052 \alang1025 \cf1 700 units having a total cost of $7,950
(4,300 + 3,650) }{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Unit cost
calculations:}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0 \rtlch
8,600 / 800 = 10.75}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\loch \f5 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 7,300 /
600 = 12.16667}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch
\alang1025 {\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 6.}{\rtlch \fcs1
\langfenp2052 \alang1025 \cf1 Gilday Furniture Inc. produces custom furniture.
Wood chips are an inevitable by-product of the cutting process, and are considered
scrap. Gilday is unable to use this scrap; however, the company has an agreement
to sell the scrap at market prices to a local company that processes the wood chips
to make industrial fillers. }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfe2052 \langfenp2052 \alang1025 \cf1 Record the entries required for scrap
under each of the following conditions:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\alang1025 \cf1 (a) The revenue received for scrap is to be treated as other
income. The market value of wood chips is stable and is currently $200 per ton.
The company has seven tons on hand.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (b) The
revenue received for scrap is to be treated as a reduction in manufacturing cost,
but cannot be identified with a specific job. A firm price is not determinable for
the scrap until it is sold. It is eventually sold for cash of $800.}{\rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (c) The revenue
received for scrap is to be treated as a reduction in manufacturing cost, and five
tons of scrap are related to a special job where the company made numerous round
tables. The market value of wood chips is stable and is currently $200 per ton.}
\af0 \loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (a)
Scrap Materials}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\alang1025 \cf1 }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\fcs0
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Scrap Revenue}{\rtlch
Cash (or Accounts Receivable)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\alang1025 \cf1 1,400}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\alang1025 \cf1 Scrap Materials}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (b) Cash (or
Accounts Receivable)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfenp2052 \alang1025 \cf1 Factory Overhead}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (c) Scrap
\af0 \loch \f0 \lang1033
\alang1025 \cf1 1,000}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Work in Process}
Cash (or Accounts Receivable)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Scrap Materials}{\rtlch \fcs1 \af0 \afs22 \ltrch
\tx3916 \tql
\tx4550 \tql \tx5874 \tql \tx6508 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\langfenp2052 \alang1025 \cf1 IMA 2B - Cost Management}{\rtlch \fcs1 \af0 \afs22
\alang1025 \cf1 The Outdoor Manufacturing Company produces sporting equipment. The
company maintains a single raw materials inventory account for both direct and
indirect materials. The following information came from the factory ledger
accounts for December:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfenp2052 \alang1025 \cf1 Raw Materials, December 1}{\rtlch \fcs1 \af0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 $ 45,500}{\rtlch
\alang1025 \cf1 Work in Process, December 1}{\rtlch \fcs1 \af0 \afs22 \ltrch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Finished
Goods, December 1}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \cell
}\pard \plain \qj \li0 \ri0 \lisb0 \lisa0 \nowidctlpar \aspalpha \aspnum
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Raw
materials purchases (during December)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
labor}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 Repairs and maintenance}{\rtlch \fcs1 \af0 \afs22
\alang1025 \cf1 Indirect materials}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
Utilities}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\alang1025 \ltrch \dbch \af2 \hich \af5 \loch \f5 \lang1033
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \cell }\pard \plain \qj \li0
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Indirect
labor}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\langfenp2052 \alang1025 \cf1 Supervisors' salaries}{\rtlch \fcs1 \af0 \afs22
\alang1025 \cf1 Raw Materials, December 31}{\rtlch \fcs1 \af0 \afs22 \ltrch
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Work in
Process, December 31}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfenp2052 \alang1025 \cf1 Finished Goods, December 31}{\rtlch \fcs1 \af0 \afs22
\fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Compute the cost of
direct materials used during the month of December.}{\rtlch \fcs1 \af0 \afs2 \ltrch
materials inventory, December 1}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 $ 45,500}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
materials purchases}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 \ul1 \uc1 \u160 ?}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 623,000}{\rtlch \fcs1
\cf1 Total materials available}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 $668,500}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20
\alang1025 \ltrch \loch \af4 \hich \af4 \dbch \af2
\cf1 Less: Raw materials inventory, December 31}{\rtlch \fcs1 \af0 \afs22
materials used}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 Less: Indirect materials used}{\rtlch \fcs1 \af0
materials used}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 \uldb3 $608,200}{\rtlch \fcs1 \af5 \afs20 \ltrch \fcs0 \fs20 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Instructor Note:
This question relates concepts from chapter 2 to those learned in
chapter 1.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch
\alang1025 \cf1 The following decisions and transactions were made for the Sanders
Company in May:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
}\pard \plain \ql \fi-720 \li720 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0
\lin720 \rin0 \tql \tx720 \tql \tx8280 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 May 1}
\langfenp2052 \alang1025 \cf1 The production manager informed the storeroom keeper
that the forcasted usage of }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Component X is
3,000 units. There are 1,500 units on hand, each having a unit cost of $20. The
company maintains a minimun stock of 1,000 units. The storeroom }{\rtlch \fcs1
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 keeper notifies the
purchasing agent that the company will need 2,500 units of X to meet May\uc1 \u8217
?s production needs and maintain a minimum inventory of 1,200 units.}{\rtlch
\par }\pard \plain \ql \fi-720 \li720 \ri0 \lisb0 \lisa0 \widctlpar \keep1
\langfenp2052 \alang1025 \cf1 The purchasing agent checks with a number of vendors
and orders 2,500 units of }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\alang1025 \cf1 Component X. Unfortunately, the price has gone up to $25.}
\langfenp2052 \alang1025 \cf1 The shipment of Component X is received and
inspected. The units are in good}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\alang1025 \cf1 condition and the company received the number of units it ordered.}
\langfenp2052 \alang1025 \cf1 The invoice covering Component X is received from the
vendor and approved for }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 payment.}{\rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 May 21}{\rtlch
\langfenp2052 \alang1025 \cf1 The May 9 invoice is paid in full.}{\rtlch \fcs1 \af0
\langfenp2052 \alang1025 \cf1 During the month, 2,950 units of Component X are
issued to production. The }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 company uses FIFO costing and a job order cost
system.}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
}\pard \plain \ql \fi-720 \li720 \ri0 \lisb0 \lisa0 \widctlpar \keep1 \hyphpar0
\lin720 \rin0 \itap0 \rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs21 \kerning2
\langfenp2052 \alang1025 \cf1 An inventory of the storeroom is taken at the end of
the day and there are 1,040 units of Component X on hand.}{\rtlch \fcs1 \af0 \afs22
\langfe2052 \langfenp2052 \alang1025 \cf1 (a)}{\rtlch \fcs1 \af0 \afs22 \ltrch
\cf1 Prepare a table to answer the following questions:}{\rtlch \fcs1 \af0
\cf1 (1)}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 What forms, if any, were
used?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 What entry, if any,
was recorded?}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 (b)}{\rtlch
\langfenp2052 \alang1025 \cf1 Calculate the balance in the Materials account at May
31.}{\rtlch \fcs1 \af0 \afs2 \ltrch \fcs0 \fs2 \kerning0 \rtlch \alang1025
\cltxlrtb \clwWidth420 \clftsWidth3 \cellx8370 \pard \plain
\langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Date}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Form}
Account}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\alang1025 \cf1 \ul1 Debit}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 Credit}{\rtlch \fcs1 \af0 \afs22
requisition}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 No entry}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\alang1025 \cf1 \cell }\pard \plain \ql \li0 \ri0 \lisb0 \lisa0 \widctlpar \keep1
order}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\af0 \afs22 \ltrch \fcs0 \fs21 \kerning2 \rtlch \alang1025 \ltrch
\alang1025 \cf1 May 7}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Receiving report}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\clvertalt \clbrdrl \brdrnone
\clbrdrr \brdrnone \clbrdrt \brdrnone \clbrdrb \brdrnone \cltxlrtb
\alang1025 \cf1 May 9}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 None}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\cf1 Materials}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
Accounts Payable}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\fs21 \kerning2
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Approved
voucher}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\cf1 Accounts Payable *}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\clwWidth1320 \clftsWidth3
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Cash}
\loch \f0 \lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Materials
requistion}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch \alang1025
\widctlpar \keep1 \hyphpar0 \lin0 \rin0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Work in Process **}
\cellx8370 \row }\trowd \trql \trgaph0 \trrh225 \trleft-90 \trautofit1 \trftsWidth1
\alang1025 \cf1 May 31}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\alang1025 \cf1 Inventory report}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Factory Overhead ***}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Materials}
\alang1025 \cf1 \cell }\pard \plain \qr \li0 \ri0 \lisb0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 * }{\rtlch
\langfenp2052 \alang1025 \cf1 2,500 units x $25 = $62,500}{\rtlch \fcs1 \af0 \afs22
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 **}{\rtlch \fcs1
\langfenp2052 \alang1025 \cf1 FIFO Basis:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\cf1 Beginning Inventory}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfenp2052 \alang1025 \cf1 1,500 units @ $20}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfenp2052 \alang1025 \cf1 Received}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 2,500}{\rtlch \fcs1 \af0
units @ $25}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 62,500}{\rtlch \fcs1
\langfenp2052 \alang1025 \cf1 Total available}{\rtlch \fcs1 \af0 \afs22 \ltrch
4,000 units}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 Issued (2,950 units)}{\rtlch \fcs1 \af0 \afs22 \ltrch
\langfenp2052 \alang1025 \cf1 (1,500) units @ $20 (30,000)}{\rtlch
\langfenp2052 \alang1025 \cf1 (}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 1,450}
\alang1025 \cf1 ) units @ $25 (}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 \ul1 36,250}{\rtlch
\alang1025 \cf1 )}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 Per perpetual records @ May 31}{\rtlch \fcs1 \af0
\alang1025 \cf1 1,050 units @ $25}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22
\langfenp2052 \alang1025 \cf1 Per physical inventory @ May 31}{\rtlch \fcs1 \af0
\hich \af4 \dbch \af2 \lang1033 \langnp1033
\langfenp2052 \alang1025 \cf1 Inventory adjustment needed}{\rtlch \fcs1 \af0 \afs22
\langfenp2052 \alang1025 \cf1 10 units@ $25}{\rtlch \fcs1 \af0 \afs22 \ltrch
\cf1 }{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 **}{\rtlch \fcs1
\langfenp2052 \alang1025 \cf1 (1,500 x $20) + (1,450 x $25) = $66,250}{\rtlch \fcs1
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 ***}{\rtlch
\langfenp2052 \alang1025 \cf1 10 x $25 = $250}{\rtlch \fcs1 \af0 \afs22 \ltrch
\lang1033 \langnp1033 \langfe2052 \langfenp2052 \alang1025 \cf1 Units in inventory
at May 31 = 1,040 units @ $25 = $26,000 per above}{\rtlch \fcs1 \af0 \afs2
\alang1025 \cf1 2, 3}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0
\langfenp2052 \alang1025 \cf1 NAT:}{\rtlch \fcs1 \af0 \afs22
\alang1025 \cf1 IMA 2B - Cost Management}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0
\cf1 TOP:}{\rtlch \fcs1 \af0 \afs22 \ltrch \fcs0 \fs22 \kerning0 \rtlch
\langfenp2052 \alang1025 \cf1 \par }}

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{\rtf1 \ansi \ansicpg1252 \deff0 \stshfdbch2 \stshfloch0 \stshfhich0

\deflang1033 \deflangfe1033 {\fonttbl {\f0 \froman \fcharset0 \fprq2 {\*\panose

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