COST ACCOUNTING

1.) In backflush costing, if the conversion cost in the Raw and In Process was $500 on July 1 and $1,000 on July 31, the account to be credited at the end of July for the $500 increase would be: A. Raw Materials B. Raw and In Process C. Cost of Goods Sold D. Finished Goods 2.) Charlie Company has materials cost in the June 1 Raw and In Process of $10,000, materials received during June of $205,000 and materials cost in the June 30 Raw and In Process of $12,500. The amount to be backflushed from Raw and In Process to Finished Goods at the end of June would be: A $207,500 B. $217,500 C. $202,500 D. $215,000 3.) The cost accounting system that is noted for its lack of detailed tracking of work in process during the accounting period is: A standard costing B. process costing C. backflush costing D. job order costing 4.) Advantages that result from reducing raw materials inventory include all of the following except: A. a reduced risk of obsolescence B. a reduced risk of damaged materials C. a decreased possibility of not being able to produce a unit when required D. a need for less storage space 5.) The Eagle Company has a cycle time of 1.5 days, uses raw and in process (RIP) account, and charges all conversion cost to cost of goods sold. At the end of each month, all inventories are counted, their conversion cost components are estimated, and inventory account balances are adjusted. Raw material cost is backflushed from RIP to Finished Goods. The following information is for June: (see table below) The amount to be backflushed from Finished Goods to Cost of Goods SOLD IS Beginning Balance of RIP account, including P1,200 conversion cost 11,700 Beginning balance of finished goods account, including P4,000 of conversion cost 12,000 Raw materials received on credit 220,000 Ending RIP inventory per physical count, including P1,800 conversion cost estimate 12,800 Ending finished goods inventory per physical count, including P3,500 conversion 9,500 cost estimate A. P232,500 B. P219,500 C. P220,000 D. P218,900 IN