APCO Company manufactures various lines of bicycles. Because of the high volume of each line, the...
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APCO Company manufactures various lines of bicycles. Because of the high volume of each line, the company employs a process costing system using the weighted-average method. Bicycle parts are manufactured in the molding department and then are consolidated into a single bike unit in the molding department and transferred to the assembly department where they are assembled. After assembly, the bicycle is sent to the packing department. Annual cost and production figures for the assembly department are presented in the schedules below. Defective bicycles are identified at the inspection point when the assembly labor process is 70% complete; all assembly materials have been added at this point. The normal rejection rate for defective bicycles is 5% of the bicycles reaching the inspection point. Any defective bicycles above the 5% quota are considered to be abnormal. All defective bikes are removed from the production process and destroyed. Prior period costs Current period costs Total costs Assembly Department Cost Data Transferred-in from Molding Department $ 100, 200 1,252,200 $1,352,400 Assembly Materials $ 9,360 105,480 $114,840 Beginning inventory. Transferred-in from molding during year. Transferred out to packing during year. Ending inventory Assembly Department Production Data Assembly Conversion $ 14,990 249,730 $264,720 Required: 1. Compute the number of defective, or spoiled, bikes that are considered to be a. Normal spoilage b. Abnormal spoilage. Total Cost of Bike through Assembly 124,550 1,607,410 $1,731,960 C. Abnormal spoiled units. d. Ending Work-in-Process Inventory in the assembly department. $ Bicycles Transferred-in. 3,180 100% 63,000 100 49,000 100 4,360 100 Percentage Complete Assembly Materials 100% 100 50 Assembly Conversion 80% 2. Compute the equivalent units of production for the year for a. Bicycles transferred in from the molding department. b. Bicycles s produced with regard to assembly materials. c. Bicycles produced with regard to assembly conversion. 3. Compute the cost per equivalent unit for the fully assembled bike. 4. Compute the amount of the total production cost of $1,731,960 that will be associated with the following items: a. Normal spoiled units. b. Good units completed in the assembly department. 100 20 APCO Company manufactures various lines of bicycles. Because of the high volume of each line, the company employs a process costing system using the weighted-average method. Bicycle parts are manufactured in the molding department and then are consolidated into a single bike unit in the molding department and transferred to the assembly department where they are assembled. After assembly, the bicycle is sent to the packing department. Annual cost and production figures for the assembly department are presented in the schedules below. Defective bicycles are identified at the inspection point when the assembly labor process is 70% complete; all assembly materials have been added at this point. The normal rejection rate for defective bicycles is 5% of the bicycles reaching the inspection point. Any defective bicycles above the 5% quota are considered to be abnormal. All defective bikes are removed from the production process and destroyed. Prior period costs Current period costs Total costs Assembly Department Cost Data Transferred-in from Molding Department $ 100, 200 1,252,200 $1,352,400 Assembly Materials $ 9,360 105,480 $114,840 Beginning inventory. Transferred-in from molding during year. Transferred out to packing during year. Ending inventory Assembly Department Production Data Assembly Conversion $ 14,990 249,730 $264,720 Required: 1. Compute the number of defective, or spoiled, bikes that are considered to be a. Normal spoilage b. Abnormal spoilage. Total Cost of Bike through Assembly 124,550 1,607,410 $1,731,960 C. Abnormal spoiled units. d. Ending Work-in-Process Inventory in the assembly department. $ Bicycles Transferred-in. 3,180 100% 63,000 100 49,000 100 4,360 100 Percentage Complete Assembly Materials 100% 100 50 Assembly Conversion 80% 2. Compute the equivalent units of production for the year for a. Bicycles transferred in from the molding department. b. Bicycles s produced with regard to assembly materials. c. Bicycles produced with regard to assembly conversion. 3. Compute the cost per equivalent unit for the fully assembled bike. 4. Compute the amount of the total production cost of $1,731,960 that will be associated with the following items: a. Normal spoiled units. b. Good units completed in the assembly department. 100 20
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Cost Management A Strategic Emphasis
ISBN: 978-0077733773
7th edition
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
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