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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	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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