Question
ANSWER THE FOLLOWING QUESTIONS Santini Company uses the weighted-average method in its process costing system. The following data were taken from the companys accounting records:
ANSWER THE FOLLOWING QUESTIONS
- Santini Company uses the weighted-average method in its process costing system. The following data were taken from the companys accounting records:
Beginning work in process inventory |
|
(100% complete as to materials; |
|
70% complete as to conversion) | 120,000 units |
Started in process during the period | 360,000 units |
Ending work in process inventory |
|
(100% complete as to materials; |
|
60% complete as to conversion) | 80,000 units |
What were the equivalent units of production for conversion costs?
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|
2. Drafke Company, a manufacturer of bicycle tires, uses the weighted-average method in its process costing system. The company sold 500,000 units during the month of June. There is only one processing department. The following data were taken from the companys accounting records:
Inventory at June 1: |
|
Work in process | None |
Finished goods | 150,000 units |
Inventory at June 30: |
|
Work in process (75% complete |
|
as to conversion costs) | 32,000 units |
Finished goods | 120,000 units |
What were the equivalent units of production for conversion costs for June?
3. A study has been conducted to determine if one of the departments of Marigold Company should be discontinued. The contribution margin in the department is $150,000 per year. Fixed expenses charged to the department are $195,000 per year. It is estimated that $120,000 of these fixed expenses could be eliminated if the department is discontinued. These data indicate that if the department is discontinued, Lucy's overall net operating income would decrease by how much?
4. Lynch Company has gathered the following data on a proposed investment project:
Investment required in equipment | $1,200,000 |
Annual cash inflows | $240,000 |
Salvage value | $-0- |
Life of the investment | 10 years |
Discount rate | 10% |
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What is the net present value on this investment?
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