The July production of Bait Buckets for Flying Angler's Supply Division consisted of batch X337 (2,000 deluxe) and batch Z444 (4,000 basic). Each batch was started and finished during July, and there was no beginning or ending work in process. Costs incurred were as follows: Direct Material: Batch X337, $42,000, including $2,500 for packaging material; batch Z444, $45,000. Conversion Costs: Preparation Department, predetermined rate of $7.50 per unit; Finishing Department, predetermined rate of $6.00 per unit; Packaging Department, predetermined rate of $.50 per unit. (Only the deluxe buckets are packaged.)
Required:1. Compute the July product cost for each type of bait bucket. 2. Prepare journal entries to record the cost flows during July.
What will be an ideal response?
1. The product cost for each bucket is computed as follows:
| ? | Deluxe | Basic |
| Direct material: | ? | ? |
| Batch X337 ($42,000 ÷ 2,000) | $21.00 | -0- |
| Batch Z444 ($45,000 ÷ 4,000) | -0- | $11.25 |
| Conversion: Preparation Department | 7.50 | 7.50 |
| Conversion: Finishing Department | 6.00 | 6.00 |
| *Conversion: Packaging Department | ???.50 | ??? -0-? |
| Total product cost | $35.00 | $24.75 |
*The two production departments each worked on a total of 6,000 buckets, but the Packaging Department handled only the 2,000 deluxe models.
2. Journal entries:
| Work-in-Process Inventory: Preparation Department | 39,500* |
| Raw-Material Inventory | 39,500 |
| Work-in-Process Inventory: Preparation Department | 45,000** |
| Raw-Material Inventory | 45,000 |
| Work-in-Process Inventory: Preparation Department | 45,000*** |
| Applied Conversion Costs | 45,000 |
| Work-in-Process Inventory: Finishing Department | 129,500^ |
| Work-in-Process Inventory: Preparation Department | 129,500 |
| ? |
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In a perpetual inventory system, multiple performance obligations ________.
A) represent one distinct performance obligation B) may require the creation of an asset account, Unearned Revenue C) result in revenue being recorded when the separate performance obligations are identified because there is a binding contact D) require the company to allocate the transaction price to each performance obligation
During the year, Todd Corporation issued 200 shares of $20 par value common stock for $50 a share. A total of 500 shares were authorized. In addition, the company purchased 75 shares of treasury stock at $44 a share. Which of the following best presents the related lines in the stockholders' equity section of the company's balance sheet?
A.
| Common stock, $20 par value, 500 shares authorized, 200 shares issued, 425 outstanding | $ | 8,500 | |
| Paid in capital in excess of par - Common | 11,050 | ||
| Less: Treasury stock, 75 shares @ $44 per share | (3,300 | ) |
B.
| Common stock, $20 par value, 500 shares authorized, 200 shares issued, 125 outstanding | $ | 4,000 | |
| Paid in capital in excess of par - Common | 6,000 | ||
| Less: Treasury stock, 75 shares @ $44 per share | (3,300 | ) |
C.
| Common stock, $50 market value, 500 shares authorized, 200 shares issued, 125 outstanding | $ | 10,000 | |
| Less: Treasury stock, 75 shares @ $44 per share | (3,300 | ) |
D.
| Common stock, $20 par value, 500 shares authorized, 200 shares issued and outstanding | $ | 4,000 | |
| Paid in capital in excess of par - Common | 6,000 | ||
| Less: Treasury stock, 75 shares @ $20 per share | (1,800 | ) |
Laws regulating the rights and obligations of individuals in relationship to each other are called
a. civil laws. b. criminal laws. c. constitutional laws. d. administrative laws.