Question

27. The cost of production of completed and finished goods during the period amounted to $450,000, and the finished products shipped to customers had total production costs of $357.000. From the following select the entry to record the transfer of cost the finished goods to cost of goods sold Finished Coads 450.000 Cost of Goods Sold 450,000 Finished Goods 357.000 Cost of Goods Sold 357,000 e Cost of Goods Sold 357.000 Finished Goods 357,000 d Cost of Good Sold 450.000 Finished Goods 450,000 Zeke Company is a manufacturing company that has worked on several production jobs during the 1st quarter of the year. Below is a list of all the jobs for the quarter: Balance Job 356 S 450 Job 357 SI 235 Job 158 S 378 Job 159 $ 689 Job 360 $456 Job 356, 357, 358 & 359 were completed. Jobs 356 & 357 were sold at a profit of $500 on cach job. 28. What is the ending balance of Work in Process for Zeke Company as of the end of the 1st quarter? a. So b. $456 c. $3,208 d $2,752 29. What is the ending balance of Cost of Goods sold for Zeke Company as of the end of the 1st quarter? a $456 b. $2,685 c. $1,685 d. $685 30. What is Gross Margin for Zeke Company as of the end of the 1st quarter? a $1,685 b. $2,685 c. $1,000 d $685 31. If Department I had 600 units, 60% completed, in process at the beginning of the period, 6,000 units were completed during the period, and 700 units were 30% completed at the end of the period, what was the number of equivalent units of production for conversion costs for the period, if the first-in, first-out method is used to cost inventories? a. 7,300 b. 5,640 c. 6,700 d. 5,850

Answer 1

27. c. Cost of goods sold                357,000

                Finished goods                                  357,000

The cost of goods sold is to be debited to finished goods when finished goods is transferred to cost of goods sold. The total cost of production is irrelevant as it also results in work in process. Only the amount that is transferred to finished goods from production is relevant after giving due for work in process. SO, the correct option is c.

28.

Job 360 has not been completed yet,. Hence it is work in process.

Ending balance of work in process = Job 360 = $ 456

The correct option is b. $ 456.

29.

Job 356 & Job 357 has been sold. Hence, the cost of goods sold will include their balance

Balance of cost of goods sold = Job 356 + Job 357 = 450 + 1235 = $ 1685

The correct option is c. $ 1685.

30.

Gross Margin is the profit from the two jobs sold i.e. Job 356 and job 357 for $ 500 each , so $1,000.

The correct option is c. $ 1000.

31

FIFO means first units get out first.

This means that for opening balance where 60% completed, 40% work need to be done. This 600 units is included in the units completion.

Equivalent units	Units
Opening balance (600 *40%)	240
Completed during the year (6000-600)	5400
Ending balance (700*30%)	210
Equivalent units for conversion	5850

Hence, correct option is d. 5850

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