The Bakery produces cupcakes. It uses a process costing system. In March, its beginning inventory was 450 units, which were 100% complete for direct materials costs and 10% complete for conversion costs. The cost of beginning inventory was $655. Units started and completed during the month totaled 14,200. Ending inventory was 410 units, which were 100% complete for direct materials costs and 70% complete for conversion costs. Costs per equivalent unit for March were $1.40 for direct materials costs and $1.00 for conversion costs. Using the FIFO costing method, compute the cost of goods transferred to the Finished Goods Inventory account, the cost remaining in the Work in Process …show more content…
The numbered items that follow are concepts that underlie value-based systems, such as ABM and lean operations. Match each concept to the related lettered element(s) of a lean operating environment.
1. Business processes are simplified
c. Quick machine setups and flexible work cells
2. The quality of the product or service is critical
e. High levels of product quality
3. Employees are cross-trained
d. A multi-skilled work force
4. Large inventories waste resources and may hide bad work
a. Minimum inventory levels
5. Goods should be produced only when needed.
b. Pull-through production
6. Equipment downtime is minimized
f. Effective preventive maintenance
Chapter 4, Problem P2: Activity-Based Costing
Printware Products, Inc. produced printers for wholesale distributors. It has just completed packaging an order from Hawes Company for 450 printers. Before the order is shipped, the controller wants to compare the unit costs computed under the company’s new activity-based costing system with the unit costs computed under its traditional costing system. Printware’s traditional costing system assigned overhead costs at a rate of 240% of direct labor cost.
Data for the Hawes order are as follows: direct materials, $17,552; purchased parts, $14,856;