1. CH1:ManagerialAccountingandCostConcepts

AdeliaForeignerEntertainmentofferseventswithforeignermodelsinSouthKorealikeadvertisement,modeling,orevents.Theyalsoprovideofincludingclothesforthemodels.Ifwelookthepast,AdeliaForeignerEntertainmentusedthefollowingformulatodescribeitstotaloverheadcosts:Y$1,500,000+$250X,whereYtotaloverheadcostsandXnumberofadvertisements.

Overheadcostsareassignedbydividingtotaloverheadcostsbythenumberofadvertisements.Foragivenfuneral,thecostofdirectmaterials(materialsformakingconceptsforthemodel)rangesfrom$1,350to$15,550,dependingontheadvertisementconcept.Theaveragecostis$6,750.Directlaboraverages$2,500permodelsoneadvertisement.During2020,Adeliaconducted15,000advertisements.Theaveragepricechargedforeachadvertisementis$10,000.Adeliaincursannualsellingexpensesof$100,000andadministrativeexpensesof$275,000.

Required

1.WhatisthetotaloverheadcostincurredbyAdeliafortheyear2020?

2.Whatistheoverheadcostperadvertisementfortheyear2020?

3.Calculatetheunitproductcostfortheyear.

4.PrepareanincomestatementforAdeliaForeignerEntertainment.

Answer:

1.TotalOverheadCost>Y:$1,500,000Y+$250X

Y:TotalOverheadCosts

X:Numberofadvertisements.

DirectMaterialis$1,350-$15,000,Dependingtheadvertisementconcept$6,750

Directlaborcosts:$2,500/Model

AveragePriceforeveryconceptofadvertisement:$10,000

SalesExpenses:$100,000

AdministrativeExpenses:$275,000

1.Howmucharetheoverheadcosts?

Y=$1,500,000+$250X

=$1,500,000+$250(15,000)

Y=$5,250,000

2.Totaloverheadcostperadvertisement

Y=$1,500,000/15,000

$1,000/advertisement

3.Unitproductcost:

Directmaterials$6,750+

Directlabor2,500+

Overhead1,000+

Total$10,250

4.IncomeStatement

AdeliaForeignerEntertainmentIncomeStatement FortheYearEndedDecember31,2020
Sales	10,000x15,000	150,000,000
Lesscostofservicessold:
Directmaterials	6,750x15,000=101,250,000
Directlabor	2,500x15,000=37,500,000
Overhead	1,000x15,000=150,000
Grossmargin		11,100,000
Lessoperatingexpenses:
Sellingexpenses	100,000
Administrativeexpenses	275,000	375,000
Incomebeforeincometaxes		10,725,000

2. CH2&3:JobOrderCosting

Adelia'sskincarecompanyisabigskincarecompanyinIndonesia.Adeliausesjobordercostaccumulationandappliesoverheadbasedondirectlaborhours.AnyunderappliedoroverappliedoverheadisadjusteddirectlytoCostofGoodsSoldattheendofeachmonth.Adeliahasjutsproduced4differentskincareproducts.Itiscalled'OurVegan'LinethatincludesToner,Lotion,EssenceandCream.OnSeptember1st,Tonerjobinprocess,DuringSeptember,CreamwasstartedandbySeptember30,LotionandEssencewerecompleted.jobcostsheetsindicatedthefollowing:

	Toner	Lotion	Essence	Cream
DirectMaterial	$3,000	$4,500	$2,750	$3,750
DirectLabor	2,250	3,500	2,000	3,000

OtherInformation:

(a)Overheadisappliedattherateof110%ofdirectlaborcost

(b)Theoperatingexpensesinthisaccountwas$3,000

Required:

1.Preparejob-ordercostsheetsforeachjobasofSeptember30.

2.CalculatetheendingbalanceinWorkinProcess(asofSeptember30)andCostof

GoodsSoldforSeptember.

3.ConstructanincomestatementforAdelia'sskincarecompanyforthemonthofSeptember.

1.

	Toner	Lotion	Essence	Cream
DirectMaterial	$3,000	$4,500	$2,750	$3,750
DirectLabor	2,250	3,500	2,000	3,000
AppliedOverhead	2,475	3,850	2,200	3,300
Total	$7,725	$11,850	$6,950	$10,050

2.EndingbalanceinWorkinProcess =JobToner+Cream

=$7,725+$10,050

=$17,775

CostofGoodsSoldforSeptember =JobLotionandEssence

=$11,850+$6,950

=$18,800

3.

Adelia'sSkincareCompanyIncomeStatement FortheMonthEndedSeptember31,2020
Sales	18,800+(0,50x18,800)	$28,200
Costofgoodssold		18,800
Grossmargin		9,400
Operatingexpenses		3,000
Incomebeforeincometaxes		$6,400

3. CH4ProcessCoasting

Adelia'sskincarecorp.producesanewskincareproductthatpassesthroughtwodepartments:MixingandPackaging.IntheMixingDepartment,allmaterialsareaddedatthebeginningoftheprocess.ThefollowinginformationpertainstotheMixingDepartmentforMay2020:

	Departmentmixing
Beginningworkinprocess(BWIP)	35,000kg
Unitscompletedandtransferredouttodepartmentpackaging	30,000kg
Endingworkinprocess	5,000kg
Materials	$70,000
Labor	$31,000
Overhead	$46,500
Materialcost	100%
Conversioncost	20%

Required:

1.Prepareascheduleofequivalentunits.

2.Composethecostperequivalentunits

3.Computethecostofgoodstransferredoutandthecostofendingworkin

process.

4.Prepareacostreconciliation

Solutions:

1.Scheduleofequivalentunits

Materialunitcost	30,000+(5,000x100%)=	35,000kg
Conversion	30,000+(5,000x20%)=	31,000kg

Conversioncostisincludedoflaborcostandoverhead

2.Composethecostperequivalentunits

Materialunitcost	$70,000/35,000	=$2
Laborunitcost	$31,000/31,000	=$1
Overheadunitcost	$46,500/31,000	=$1.5
Totalunitcost		=$4.5perequivalentunit

3.

Costofgoodstransferredouttopackagingdepartment:

30,000kgX$4.5=$135,000

Costofworkinprocess

DirectMaterial	5,000x100%x$2	=$10,000
DirectLabor	5,000x20%x$1	=$1,000
AppliedOverhead	5,000x20%x$1.5	=$1,500
Total		=$12,500

4.Costreconciliation:

??

please help me to check whether this is correct or not and please answer number 4