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EXERCISE 6: Company Halco Company Halco produces and sell Product Y and Z for supermarkets. Accounting department has provided information regarding stocks and costs of
EXERCISE 6: Company Halco Company Halco produces and sell Product Y and Z for supermarkets. Accounting department has provided information regarding stocks and costs of the period as below tables. Y is produced from raw materials while Z is produced from Y. For June year N, Company Halco has purchased several times and the total amount was 85,000 . Company Halco has also used 12,000 kg of Y to produce Z. Production in June was 16,000 units of Y and 10,800 units of Z. Beginning inventory: Raw materials Finished goods Y Finished goods Z Sales of June: Finished goods Y Finished goods Z 114,000 8,800 Kg for 87,800 1,900 Kg for 34,200 10,500 Kg @ 20 per kg 12,000 Kg @ 35 per kg Closing inventory: . Raw materials Finished goods Y Finished goods Z Table of indirect cost: 64,000 2,300 units 700 units Service departments Production department Cost items Human Adminis- Distribu-ti resource Store tration Prod 1 Prod 2 on Apportionned cost 25,000 21,000 23,800 23,000 35,000 18,000 Reapportionment Human resource 2,5 7,5 5 5 5 Store 3 4 5 4 Administration 1/3 1/4 remaining Prod 1 department is dedicated for Product Y; therefore its cost is incorporated only in production cost of Product Y. The total indirect cost of Prod 2 department is totally for Product Z whereas the total of Distribution department is divided between Product Y and Product Z for 1/3 and 2/3 respectively. Required '1 Prepare an analysis showing the distribution of overhead costs to departments. Reapportion service cost centre costs using the reciprocal method. 2. Calculate production cost for Product Y and Product Z. 3. Show profit analysis of June
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