Mannarelli Corporation uses the FIFO method in its process costing system Operating data for the Casting Department for the month of September appear below Units Percent Complete with Respect to Conversion Beginning work in process inventory 19,000 25 Transferred in from the prior department during September 99,000 Ending work in process inventory 29,000 90 According to the company's records, the conversion cost in beginning work in process inventory was $16,160 at the beginning of September Additional conversion costs of $531,556 were incurred in the department during the month The cost per equivalent unit for conversion costs for September is closest to (Round off to three decimal places ) $4 642 $4 817 $5 369 $4 669 During February, Degan Inc transferred $55,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $60,000 (assume there was enough beginning balance in the Finished goods inventory account) The journal entries to record these transactions would include a credit to Finished Goods of $55,000 debit to Finished Goods of $60,000 credit to Cost of Goods Sold of $60,000 credit to Work in Process of $55,000 Carr Company produces a single product During the past year, Carr manufactured 42,000 units and sold 28,500 units Production costs for the year were as follows Fixed manufacturing overhead $ 420,000 Variable manufacturing overhead $ 525,000 Direct labor $ 344,400 Direct materials $ 445,200 Sales totaled $2,137,500, variable selling expenses totaled $424,200, and fixed selling and administrative expenses totaled $187,000 There were no units in beginning inventory Assume that direct labor is a variable cost Under absorption costing, the ending inventory for the year would be valued at (Do not round your intermediate calculations ) $557,550 $646,129 $752,657 $711,284 The following data were taken from the accounting records of Abacus Company which uses the FIFO method in its process costing system Beginning work in process inventory 30,000 units (materials 100 complete, labor and overhead 70 complete) Started in process during the period 100,000 units Ending work in process inventory 40,000 units (materials 100 complete, labor and overhead 80 complete) The equivalent units are Material, 134,000 units labor and overhead, 132,000 units Material, 130,000 units labor and overhead, 122,000 units Material, 100,000 units labor and overhead, 101,000 units Material, 91,000 units labor and overhead, 83,000 units Budget data for the Bidwell Company are as follows Sales (170,000 units) $1,700,000 Expenses Fixed Variable Raw materials $ 510,000 Direct labor 340,000 Overhead $ 170,000 255,000 Selling and administrative 187,000 85,000 Total expenses $ 357,000 $ 1,190,000 1,547,000 Net operating income $ 153,000 The number of units Bidwell would have to sell to earn a net operating income of $255,000 is 170,000 units 119,000 units 204,000 units 255,000 units DeAnne Company produces a single product The company's variable costing income statement for August appears below DeAnne Company Income statement For the month ended August 31 Sales ($21 per unit) $1,134,000 Variable expenses Variable cost of goods sold 486,000 Variable selling expense 108,000 Total variable expenses 594,000 Contribution margin 540,000 Fixed expenses Fixed manufacturing 147,000 Fixed selling and administrative 49,000 Total fixed expenses 196,000 Net operating income $344,000 The company produced 49,000 units in August and the beginning inventory consisted of 22,000 units Variable production costs per unit and total fixed costs have remained constant over the past several months The value of the company's inventory on August 31 under the absorption costing method is (Do not round your intermediate calculations ) $204,000 $238,000 $153,000 $253,426 Candice Corporation has decided to introduce a new product The product can be manufactured using either a capital intensive or labor intensive method The manufacturing method will not affect the quality or sales of the product The estimated manufacturing costs of the two methods are as follows Capital Intensive Labor Intensive Variable manufacturing cost per unit $ 14 00 $ 17 60 Fixed manufacturing cost per year $ 2,606,000 $ 1,417,600 The company's market research department has recommended an introductory selling price of $30 per unit for the new product The annual fixed selling and administrative expenses of the new product are $600,000 The variable selling and administrative expenses are $2 per unit regardless of how the new product is manufactured Required a Calculate the break even point in units if Candice Corporation uses the (Do not round intermediate calculations ) Break even point in units Capital intensive manufacturing method Labor intensive manufacturing method b Determine the unit sales volume at which the net operating income is the same for the two manufacturing methods (Do not round intermediate calculations Round your answer to the nearest whole number ) Sales volume c Assuming sales of 440,000 units, what is the degree of operating leverage if the company uses the (Do not round intermediate calculations Round your answers to 2 decimal places ) Degree of operating leverage Capital intensive manufacturing method Labor intensive manufacturing method d What is your recommendation to management concerning which manufacturing method should be used, if the sales volume is in excess of the one calculated under Requirement (b) Capital intensive manufacturing method Labor intensive manufacturing method Hickory Company manufactures two products13,000 units of Product Y and 5,000 units of Product Z The company uses a plantwide overhead rate based on direct labor hours It is considering implementing an activity based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools The following additional information is available for the company as a whole and for Products Y and Z (The total estimated overhead cost may not agree with the sum of allocated overhead costs to each product ) Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine hours $ 246,000 12,000 MHs Machine setups Number of setups $ 137,500 250 setups Production design Number of products $ 89,000 2 products General factory Direct labor hours $ 357,000 14,000 DLHs Activity Measure Product Y Product Z Machining 7,500 4,500 Number of setups 40 210 Number of products 1 1 Direct labor hours 8,500 5,500 Required What is the activity rate for the Machining activity cost pool (Round your answer to 2 decimal places ) Machining activity cost pool $ per MH Ermoin Inc uses the FIFO method in its process costing system The following data concern the operations of the company's first processing department for a recent month Work in process, beginning Units in process 2,400 Percent complete with respect to materials 70 Percent complete with respect to conversion 30 Costs in the beginning inventory Materials cost $ 4,140 Conversion cost $ 6,265 Units started into production during the month 17,900 Units completed and transferred out 17,900 Costs added to production during the month Materials cost $ 165,490 Conversion cost $ 560,270 Work in process, ending Units in process 2,400 Percent complete with respect to materials 50 Percent complete with respect to conversion 30 Required Using the FIFO method a Determine the equivalent units of production for materials and conversion costs Materials Conversion Equivalent units of production b Determine the cost per equivalent unit for materials and conversion costs (Round your answers to 2 decimal places ) Materials Conversion Cost per equivalent unit $ $ c Determine the cost of ending work in process inventory (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount ) Cost of ending work in process inventory $ d Determine the cost of units transferred out of the department during the month (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount ) Cost of units transferred out $

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Mannarelli Corporation uses the FIFO method in its process costing system. Operating data for the Casting Department for the month of September appear below: Units

Mannarelli Corporation uses the FIFO method in its process costing system. Operating data for the Casting Department for the month of September appear below:

	Units	Percent Complete with Respect to Conversion
Beginning work in process inventory	19,000	25%
Transferred in from the prior department during September	99,000
Ending work in process inventory	29,000	90%

According to the company's records, the conversion cost in beginning work in process inventory was $16,160 at the beginning of September. Additional conversion costs of $531,556 were incurred in the department during the month.

The cost per equivalent unit for conversion costs for September is closest to (Round off to three decimal places.):

$4.642

$4.817

$5.369

$4.669

During February, Degan Inc. transferred $55,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $60,000 (assume there was enough beginning balance in the Finished goods inventory account). The journal entries to record these transactions would include a:

credit to Finished Goods of $55,000

debit to Finished Goods of $60,000

credit to Cost of Goods Sold of $60,000

credit to Work in Process of $55,000

Carr Company produces a single product. During the past year, Carr manufactured 42,000 units and sold 28,500 units. Production costs for the year were as follows:

Fixed manufacturing overhead	$ 420,000
Variable manufacturing overhead	$ 525,000
Direct labor	$ 344,400
Direct materials	$ 445,200

Sales totaled $2,137,500, variable selling expenses totaled $424,200, and fixed selling and administrative expenses totaled $187,000. There were no units in beginning inventory. Assume that direct labor is a variable cost. Under absorption costing, the ending inventory for the year would be valued at (Do not round your intermediate calculations.):

$557,550

$646,129

$752,657

$711,284

The following data were taken from the accounting records of Abacus Company which uses the FIFO method in its process costing system:

Beginning work in process inventory:	30,000 units (materials 100% complete, labor and overhead 70% complete)
Started in process during the period:	100,000 units
Ending work in process inventory:	40,000 units (materials 100% complete, labor and overhead 80% complete)

The equivalent units are:

Material, 134,000 units; labor and overhead, 132,000 units

Material, 130,000 units; labor and overhead, 122,000 units

Material, 100,000 units; labor and overhead, 101,000 units

Material, 91,000 units; labor and overhead, 83,000 units

Budget data for the Bidwell Company are as follows:

Sales (170,000 units)			$1,700,000
Expenses:	Fixed	Variable
Raw materials		$ 510,000
Direct labor		340,000
Overhead	$ 170,000	255,000
Selling and administrative	187,000	85,000
Total expenses	$ 357,000	$ 1,190,000	1,547,000
Net operating income			$ 153,000

The number of units Bidwell would have to sell to earn a net operating income of $255,000 is:

170,000 units

119,000 units

204,000 units

255,000 units

DeAnne Company produces a single product. The company's variable costing income statement for August appears below:

DeAnne Company Income statement For the month ended August 31
Sales ($21 per unit)	$1,134,000
Variable expenses:
Variable cost of goods sold	486,000
Variable selling expense	108,000
Total variable expenses	594,000
Contribution margin	540,000
Fixed expenses:
Fixed manufacturing	147,000
Fixed selling and administrative	49,000
Total fixed expenses	196,000
Net operating income	$344,000

The company produced 49,000 units in August and the beginning inventory consisted of 22,000 units. Variable production costs per unit and total fixed costs have remained constant over the past several months. The value of the company's inventory on August 31 under the absorption costing method is (Do not round your intermediate calculations.):

$204,000

$238,000

$153,000

$253,426

Candice Corporation has decided to introduce a new product. The product can be manufactured using either a capital-intensive or labor-intensive method. The manufacturing method will not affect the quality or sales of the product. The estimated manufacturing costs of the two methods are as follows:

	Capital-Intensive			Labor-Intensive
Variable manufacturing cost per unit		$	14.00		$	17.60
Fixed manufacturing cost per year		$	2,606,000		$	1,417,600

The company's market research department has recommended an introductory selling price of $30 per unit for the new product. The annual fixed selling and administrative expenses of the new product are $600,000. The variable selling and administrative expenses are $2 per unit regardless of how the new product is manufactured.

Required:
a.	Calculate the break-even point in units if Candice Corporation uses the (Do not round intermediate calculations.):

	Break-even point in units
Capital-intensive manufacturing method
Labor-intensive manufacturing method

b.	Determine the unit sales volume at which the net operating income is the same for the two manufacturing methods. (Do not round intermediate calculations. Round your answer to the nearest whole number.)

Sales volume

c.	Assuming sales of 440,000 units, what is the degree of operating leverage if the company uses the: (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	Degree of operating leverage
Capital-intensive manufacturing method
Labor-intensive manufacturing method

What is your recommendation to management concerning which manufacturing method should be used, if the sales volume is in excess of the one calculated under Requirement (b)?

	Capital-intensive manufacturing method
	Labor-intensive manufacturing method

Hickory Company manufactures two products13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: (The total estimated overhead cost may not agree with the sum of allocated overhead costs to each product.)

Activity Cost Pool	Activity Measure	Estimated Overhead Cost		Expected Activity
Machining	Machine-hours	$	246,000	12,000	MHs
Machine setups	Number of setups	$	137,500	250	setups
Production design	Number of products	$	89,000	2	products
General factory	Direct labor-hours	$	357,000	14,000	DLHs

Activity Measure	Product Y	Product Z
Machining	7,500	4,500
Number of setups	40	210
Number of products	1	1
Direct labor-hours	8,500	5,500

Required:

What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.)

Machining activity cost pool

$ per MH

Ermoin Inc. uses the FIFO method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.


Work in process, beginning:
Units in process		2,400
Percent complete with respect to materials		70	%
Percent complete with respect to conversion		30	%
Costs in the beginning inventory:
Materials cost	$	4,140
Conversion cost	$	6,265

Units started into production during the month		17,900
Units completed and transferred out		17,900

Costs added to production during the month:
Materials cost	$	165,490
Conversion cost	$	560,270

Work in process, ending:
Units in process		2,400
Percent complete with respect to materials		50	%
Percent complete with respect to conversion		30	%

Required:

Using the FIFO method:

a.	Determine the equivalent units of production for materials and conversion costs.

	Materials	Conversion
Equivalent units of production

b.	Determine the cost per equivalent unit for materials and conversion costs. (Round your answers to 2 decimal places.)

	Materials	Conversion
Cost per equivalent unit	$	$

c.	Determine the cost of ending work in process inventory. (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)

Cost of ending work in process inventory

d.	Determine the cost of units transferred out of the department during the month. (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)

Cost of units transferred out