QUESTION ONE.
Ngomango Company processes and packages cream cheese. The
following data have been compiled for the month of April. Conversion activity
occurs uniformly throughout the production process.
Work in process, April 1—10,000 units:
Direct material: 100% complete, cost of . . . . . . . . . .
. .. . . . . . . . . . . . . . . . .. . . . . Tshs. 22,000
Conversion: 20% complete, cost of . . . . …. . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500
Balance in work in process, April 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . Tshs. 26,500
Units started during April . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
Units completed during April and transferred out to
finished-goods inventory . . . . . . . 80,000 Work in process, April 30
Direct material: 100% complete
Conversion: 331/3% complete
Costs incurred during April:
Direct material . . …. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tshs.198,000
Conversion costs:
Direct labour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . Tshs.
52,800
Applied manufacturing overhead ………. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
105,600
Total conversion costs . . . . . . . . .. . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tshs.158,400
Required:
Prepare schedules to accomplish each of the following
process-costing steps for the month of April. Use the FIFO method of process
costing.
QUESTION TWO
On February 1, 2,000 units were in process 30% complete in
regards to materials and 20% complete in regards to
conversion costs at a transferred-in cost of Tshs.44,800,000, a cost of
materials of Tshs.7,020,000 and a cost of conversion costs of Tshs.3,220,000
during.
February 16,000 units were transferred-in, during February
transferred-in costs of
Tshs.351,200,000 materials
costs of Tshs.144,180,000 and conversion
costs of
Tshs.191,180,000 were added to production, during February
15,000 units were completed, on February 28, 3,000 units were in process 60%
complete in regards to materials and 40% complete in regards to conversion
costs
Prepare Cost of Production report using FIFO Method
QUESTION THREE
The Queens Temptations Company has two processing departments, Cooking
and Packaging. Ingredients are placed into production at the beginning of the
process in Cooking, where they are formed into various shapes. When finished,
they are transferred into Packaging, where the candy is placed into heart and
tuxedo boxes and covered with foil. All material added in Packaging is
considered as one material for convenience. Since the boxes contain a variety
of candies, they are considered partially complete until filled with the
appropriate assortment. The following information relates to the two
departments for February 20X7:
Cooking Department:
|
||
Beginning WIP (30% complete
as to conversion)
|
4,500
|
units
|
Units started this period
|
15,000
|
units
|
Ending WIP (60% complete as
to conversion)
|
2,400
|
units
|
Packaging Department:
|
||
Beginning WIP (90% complete as to material,
80% complete as to conversion)
|
1,000
|
units
|
Units started during period
|
?
|
|
Ending WIP (80% complete as
to material and 80%
|
500
|
units
|
complete as to conversion)
Required
Determine equivalent units of production for
both departments using the FIFO method.
QUESTION FOUR
The following costs were accumulated by
Department 2 of Hughes Company during April:
Cost Transferred
from Dept. 1 Material
Conversion
Costs
|
Total
|
Beginning Inventory Tshs. 17,050 Tshs. 5,450
|
Tshs.
22,500
|
Current Period Cost 184,000 Tshs.
34,000 104,000
|
322,000
|
Tshs. 201,050 Tshs. 4,000 Tshs.109,450
Production for April in Department 2 (in units):
WIP-April 1 2,000 60% complete
Complete period transferred 20,000
WIP-April 30 5,000
40% complete
|
Tshs.344,500
|
Materials are not added in Department 2 until the very end
of processing Department 2.
Required: Compute
the cost of units completed and the value of ending WIP for:
FIFO inventory assumption
QUESTION ONE
Richmond Textiles Company manufactures a variety of natural
fabrics for the clothing industry. The following data pertain to the Weaving
Department for the month of September.
Equivalent units of direct material . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40,000
Equivalent units of conversion . . . . . . . . .. . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44,000
Units completed and transferred out during September . . . .
. . . .. . . . . . . . . . . . . . . . . . . .
50,000
The cost data for September are
as follows: Work in process, September 1
Direct material . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . Tshs.
94,000
Conversion . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44,400
Costs incurred during September
Direct material . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tshs.164,000
Conversion . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . .
272,800
There were 20,000 units in process in the Weaving Department
on September 1 (complete as to direct material, and 40% complete as to
conversion).
Required:
Compute each of the following amounts using FIFO process
costing.
1. Cost of
goods completed and transferred out of the Weaving Department during September.
2. Cost of
the September 30 work-in-process inventory in the Weaving Department. The
equivalent units in the ending work in process are 10,000 for direct material
and 2,000 for conversion
QUESTION TWO
Dahal 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 .............................................................................................................
90,000
Stage
of completion with respect to
materials................................................................. 80%
Stage of completion with respect to conversion.............................................................. 90% Costs in the beginning inventory:
Materials
cost...............................................................................................
Tshs. 1,008,000
Conversion cost.............................................................................................
Tshs.27, 621,000
Units started into production during the
month........................................................... 19,000
Units completed and transferred
out............................................................................
19,700
Costs added to production during the month:
Materials
cost...................................................................................................
Tshs.22, 992,000 Conversion
cost...............................................................................................
Tshs.650, 504,000
Work in process, ending:
Units in process..............................................................................................................
20,000
Stage
of completion with respect to
materials................................................................ 90%
Stage of completion with respect to conversion.............................................................
10% Required:
Prepare a production report for the department using the
FIFO method
QUESTION THREE
Ebert 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........................................................................................................
600
Stage of completion with respect to
materials.......................................................... 60%
Stage of completion with respect
to conversion....................................................... 70% Costs
in the beginning inventory:
Materials
cost.................................................................................................
Tshs.1, 188,000
Conversion
cost..............................................................................................
Tshs.16, 548,000
Units started into production during the
month..................................................... 18,000
Units completed and transferred out
..................................................................... 18,400
Costs added to production during the month:
Materials
cost................................................................................................
Tshs.56, 234,000 Conversion cost.............................................................................................
Tshs.715, 394,000
Work in process, ending:
Units in process
............................................................................................................
200
Stage
of completion with respect to materials
............................................................. 50% Stage of
completion with respect to
conversion........................................................... 20%
Required:
Using the FIFO method:
a.
Determine the equivalent units of production for
materials and conversion costs.
b. Determine
the cost per equivalent unit for materials and conversion costs.
c.
Determine the cost of units transferred out of the
department during the month.
d. Determine
the cost of ending work in process inventory in the department.
QUESTION FOUR
Edwards 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
..........................................................................................................
100
Stage of completion with respect to
materials.............................................................. 50%
Stage of completion with respect
to conversion........................................................... 90%
Costs in the beginning inventory:
Materials
cost........................................................................................................
Tshs.260, 000
Conversion
cost.....................................................................................................
Tshs.3, 366,000
Units started into production during the month
................................................... 20,000
Units completed and transferred
out.................................................................... 19,800
Costs added to production during the month:
Materials
cost.......................................................................................................
Tshs.99, 650,000 Conversion
cost...................................................................................................
Tshs.745, 329,000
Work in process, ending:
Units in process
...................................................................................................
300
Stage of completion with
respect to materials ...................................................... 60%
Stage of completion with respect to
conversion................................................. 20%
Required:
Using the FIFO method:
a.
Determine the equivalent units of production for
materials and conversion costs.
b. Determine
the cost per equivalent unit for materials and conversion costs.
c.
Determine the cost of units transferred out of the
department during the month.
d. Determine
the cost of ending work in process inventory in the department.
QUESTION ONE
SAP Company processes wood pulp for manufacturing various
paper products. The company employs a process costing system for its
manufacturing operations. All direct materials are added at the beginning of
the process, and conversion costs are incurred uniformly throughout the
process. This is the company’s production schedule for May 2014:
PERCENT COMPLETE
Tons of Pulp
|
Materials
|
Conversion
|
Work-in-process
inventory, May 1, 2014 6,000
Started during May 15,000
Units to account for 21,000
Units transferred out
during May 18,000
|
100%
|
20%
|
Work-in-process inventory,
May 31, 2014
3,000
|
100%
|
50%
|
Total units account for
21,000
The cost data are as follows:
Work-in-process inventory, May 1, 2014
Direct materials Tshs. 93,750,000
Conversion Tshs.
124,800,000
Costs incurred during May 2014
Direct materials Tshs. 221,250,000
Conversion Tshs. 356,850,000
Prepare Cost of Production Report if the FIFO method is used
QUESTION TWO
Yutong Motor Company rebuilds automobile engines that have
been damaged or are in need of extensive repair. The rebuilt engine has a
100,000-mile warranty and is purchased by auto shops, large motor pools in
companies and governmental units, and some individual auto owners. The Dayton
plant at Hawthorne specializes in the Ford V6 engine. The current month began
with a WIP inventory of 200 engines, which were 50 percent complete as to
materials and 50 percent complete as to conversion costs. The materials costs
in the beginning WIP inventory was Tshs.54, 860,000 while the conversion costs
was Tshs.63, 000,000. 600 engines were completed and shipped out during the
month, and total materials cost of Tshs.549,940,000 and conversion cost of
Tshs.640,000,000 were incurred during the month. The ending WIP inventory was
100 engines 20 percent complete as to materials and 40 percent complete as to
conversion cost. Data for analysis:
Beginning WIP inventory--units ………………………………………………………..200
% complete--materials content
…………………………………………………..50%
% complete--conversion cost
……………………………………………………50%
Beginning WIP inventory--costs:
Materials
……………………………………………………………………Tshs.54,860
Conversion…………………………………………………………………..Tshs.63,000
No. of units completed and shipped out during the
month……………………………. 600 Production costs incurred during the month:
Materials
……………………………………………………………………..Tshs.549,940
Conversion…………………………………………………………………...
Tshs.640,000
Stage of completion, ending WIP Inventory:
Materials
………………………………………………………………………………20%
Conversion
……………………………………………………………………………40%
Compute the cost of goods transferred out and the cost of
goods in ending work-in-process using
FIFO method
QUESTION THREE
TRONIC Electronics manufactures
circuit-testing devices in a single department. Three different models are
produced: Standard, Economy, and Deluxe. All three models require the same
amount of processing time; the differences between the three models are in the
materials used. During the month, Tshs.91,400,000 in conversion costs were
expended. Production statistics are as follows:
Standard
|
Economy
|
Deluxe
|
Beginning WIP........................... 5,000 units
|
5,000 units
|
2,500 units
|
% completed......................... 60%
|
60%
|
40%
|
Started
........................................ 60,000 units
|
90,000 units
|
80,000 units
|
Ending WIP ................................
4,000 units
|
6,000 units
|
3,000 units
|
% completed......................... 60%
|
40%
|
40%
|
Cost of materials ........................ Tshs.4,500 Tshs.2,500 Tshs.8,000
Required:
Determine the transferred-out and ending work-in-process
values using operational costing. Use job-order costing for materials and FIFO
process costing for conversion costs. Assume that materials are added at the
beginning of the process
QUESTION FOUR
A company operates several production processes involving
the mixing of ingredients to produce bulk animal foodstuffs. One such product
is mixed in two separate process operations. The information below is costs
incurred in and output from Process 2 during period just completes
Cost
Incurred
|
Tshs
|
Transfer from Process 1
|
187,704
|
Raw Materials
|
47,972
|
Conversion costs
|
63,176
|
Opening WIP
|
3,009
|
Production
|
Units
|
Opening WIP (100% complete
apart from process 2, 50% conversion Cost)
|
1,200
|
Transfer from Process 1
|
112,000
|
Completed Output
|
105,400
|
Closing WIP ((100% complete
apart from process 2, 75% conversion Cost)
|
1,600
|
Normal wastage of materials (including product transferred
from Process 1) which occur in the early stages of process 2 after materials
have been added is expected to be 5% of the input. Process 2 conversion costs
ate all apportioned to the units of good output. Wastage materials have no
saleable value
Required
Prepare cost of production
report and process 2 account assuming FIFO method
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