Chapter 16: Q5QS (page 744)
Refer to QS 16-4. Compute the total equivalent units of production with respect to conversion for March using the weighted-average method.
Equivalent units for material: 460,000 units.
Equivalent units for conversion: 370,000 units.
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This chapter’s opener featured Jeff Kearl and his company Stance.
Required
1. Sock makers like Stance typically use several different processes, including knitting, design imprinting, washing and drying, inspection, and packaging/shipping. What are some benefits of using separate process cost summary reports for each process?
2. Jeff tries to order raw materials just-in-time for their use in production. How does holding raw materials inventories increase costs? If the items are not used in production, how can they impact profits? Explain.
3. How can companies like Stance use yield to improve their production processes?
Can services be delivered by means of process operations?
Support your answer with an example.
Are the journal entries that match cost flows to product flows in process costing primarily the same or much different than those in job order costing? Explain.
List the four steps in accounting for production activity in a
reporting period (for process operations).
Refer to the information in Exercise 16-14. Prepare journal entries dated June 30 to record:
(a) raw materials purchases,
(b) direct materials usage,
(c) indirect materials usage,
(d) direct labor usage,
(e) indirect labor usage,
(f) other overhead costs,
(g) overhead applied, and
(h) payment of total payroll costs.
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