1. Darden Corporation uses the weighted-average method in its process costing sy

Question

1.

Darden Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 19,200 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $19,200. An additional 90,000 units were started into production during the month. There were 23,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs. A total of $842,880 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs for the month is closest to:

Multiple Choice

$9.486

$10.200

$8.427

$9.975

2.

In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $33,000 and ending work in process inventory of $38,000. During the month, the cost of units transferred out from the department was $168,000. In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:

Multiple Choice

$71,000

$139,000

$152,000

$206,000

3.

Data concerning Bedwell Enterprises Corporation's single product appear below:

The unit sales to attain the company's monthly target profit of $27,000 is closest to:

Multiple Choice

4,229

2,344

4,910

4,487

Selling price per unit $ 200.00 Variable expenses per unit $ 95.50 Fixed expense per month $ 441,890

Explanation / Answer

1)Unit transferred out = 19200+90000-23000 = 86200

Equivalent unit = 86200+(23000*70%) = 102300

Cost per equivalent unit = (19200+842880)/102300 = 8.427

so answer is c) $8.427

2) Total cost accounted for = 168000+38000 =206000

so answer is d) $206000

3) Contribution margin per unit = 200-95.50 = 104.50

Required Unit sales = (441890+27000)/104.50 = 4487

so answer is d) 4487

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