PART 4.1 Process Costing - Weighted Average General Information O The I See The Light Company...
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PART 4.1 Process Costing - Weighted Average General Information O The I See The Light Company has a related company that produces the figurines. They use process costing 1 in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. 2 The material is added at the beginning of the process. The labor and overhead costs are assumed B 4 5. to be added uniformly throughout. 7 7 Month of January B 9 Selected information for January is presented below. Note that the applied overhead rate was O 50% of direct labor costs in the molding department. 1 2 Molding Department 4 Goods in-process as of January 1 were 3,400 figurines at a cost of $3,213.00. Of this amount, $2,040.00 was from 5 raw materials added, $782.00 for labor and $391.00 for overhead. These 3,400 figurines were assumed to be 5 10.00% complete as to labor and overhead. 7 During January, 24,000 units were started, $12,000.00 of materials and $57,753.00 of labor costs were incurred. B 9 The 6,500 figurines that were in-process at the end of January were assumed to be 70.00% complete to 9 labor and overhead. 1 All figurines in January passed inspection. 2 B Physical Flow of Units Work-in-Process - Beginning Units Started this Period Units to Account for Total transferred out Work-in-Process - Ending Total Accounted for Equivalent Units Material (Round to three places, ##.####.####) Equivalent Units Conversion (Round to three places, ##.###.######) Total cost of Material (Round to two places, ##.####.###) Total cost of Conversion (Round to two places, ##.####.##) Total cost to account for (Round to two places, ###.####.##) Cost per equivalent unit of Material (Round to seven places, #####.# Cost per equivalent unit of Conversion (Round to seven places, #####: January 20,787 units (13. 01} 6,500 units (13. 02} 27,213.000 (13. 03} 25,263.000 (13.04) 14,040.00 (13.05} $ $ 69,753.00 (13. 06} 83,793.00 (13. 07} 0.5159299 (13. 08) 2.3538772 (13. 09} Cost of the units transferred, material and convesion (Round to two places, $####,#####.###) 3.2700000 13. 10} Cost of the ending inventory, material and convesion (Round to two places, $#########.###) 14,063.69 (13. 11} Process Costing - First-In First-Out Mr. Jones, a consultant, has indicated that FIFO process costing would produce more meaningful cost data. General Information The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout. Month of January Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department. Molding Department Goods in-process as of January 1 were 3,400 figurines at a cost of $3,213.00. Of this amount, $2,040.00 was from raw materials added, $782.00 for labor and $391.00 for overhead. These 3,400 figurines were assumed to be 10.00% complete as to labor and overhead. During January, 24,000 units were started, $12,000.00 of materials and $57,753.00 of labor costs were incurred. The 6,500 figurines that were in-process at the end of January were assumed to be 70.00% complete to labor and overhead. All figurines in January passed inspection. Physical Flow of Units Work-in-Process - Beginning Units Started this Period Units to Account for Total transferred out Work-in-Process - Ending Total Accounted for Equivalent Units Material (Round to three places, ##.###.####) Equivalent Units Conversion (Round to three places, ##.###.####) January 20,900 units (15.01} 4,550.000 (15.02} 2,002.400 (15.03} Total cost in the Beginning Inventory (Round to two places, ##,###.##) $ 3,213.00 (15.04} Total cost of Material this period (Round to two places, ##.###.##) $ 12,000.00 (15.05} Total cost of Conversion this period (Round to two places, ##.###.##) $ 58,144.00 (15.06} Total cost to account for (Round to two places, ##.###.###) $ 73,357.00 (15.07} Cost per equivalent unit of Material this period (Round to seven places, ###.# $ 0.50 {15.08} Cost per equivalent unit of Conversion this period (Round to seven places, ###.####### $ 2.42 (15.09) Cost of the units transferred, material and convesion (Round to two places, $###,###.###) $ 61,083.73 (15. 10} Cost of the ending inventory, material and convesion (Round to two places, $####,###.##) $ 18,997.33 (15. 11} Process Costing - Weighted Average With Spoilage Mr. Smith, a consultant, has indicated that the Weighted Average method is appropriate our needs. He is concerned about the number of units that failed inspection and the pricing of the good units completed. General Information The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout. The industrial engineers have studied our system and have determined that the acceptable loss for every hundred units that pass the inspection point is 5 units. Month of January Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department. Molding Department Goods in-process as of January 1 were 3,400 figurines at a cost of $3,213.00. Of this amount, $2,040.00 was from raw materials added, $782.00 for labor and $391.00 for overhead. These 3,400 figurines were assumed to be 10.00% complete as to labor and overhead. During January, 24,000 units were started, $12,000.00 of materials and $57,753.00 of labor costs were incurred. The 6,500 figurines that were in-process at the end of January were assumed to be 70.00% complete to labor and overhead. While normal spoilage is 5% of the good units completed, 2,508 units failed inspection in January. The units are inspected at the end of the process. Physical Flow of Units Work-in-Process - Beginning Units Started this Period Units to Account for Total transferred out Normal spoilage (Roundup to the next unit if needed) Abnormal spoilage Work-in-Process - Ending Total Accounted for January 18,400 units {17. 01} 920 units (17.02} 2,508 units {17.03} 6,500 units {17.04} 27,400 units {17.05} Equivalent Units Material (Round to three places, ##.###.###) Equivalent Units Conversion (Round to three places, ##.###.###) Total cost of Material (Round to two places, ##.###.##) Total cost of Conversion (Round to two places, ##.###.##) Total cost to account for (Round to two places, ##.###.##) Cost per equivalent unit of Material (Round to seven places, ###.#######) 24,000.000 {17. 06} 21,000.000 (17.07} $ 14,040.00 (17.08} $ 63,476.00 {17. 09} $ 77,516.00 {17. 10} $ 0.5856735 {17. 11} Cost per equivalent unit of Conversion (Round to seven places, ###.#######) $ 3.0226667 {17. 12} Cost of the ending inventory, material and convesion (Round to two places, $###,###.## $ 17,164.19 {17. 13} Cost of the units transferred, material and convesion (Round to two places, $###,###.## $ 66,381.07 {17. 14} Cost of the abnormal spoilage (Round to two places, $###,###.## $ 9,048.03 {17. 15} PART 4.1 Process Costing - Weighted Average General Information O The I See The Light Company has a related company that produces the figurines. They use process costing 1 in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. 2 The material is added at the beginning of the process. The labor and overhead costs are assumed B 4 5. to be added uniformly throughout. 7 7 Month of January B 9 Selected information for January is presented below. Note that the applied overhead rate was O 50% of direct labor costs in the molding department. 1 2 Molding Department 4 Goods in-process as of January 1 were 3,400 figurines at a cost of $3,213.00. Of this amount, $2,040.00 was from 5 raw materials added, $782.00 for labor and $391.00 for overhead. These 3,400 figurines were assumed to be 5 10.00% complete as to labor and overhead. 7 During January, 24,000 units were started, $12,000.00 of materials and $57,753.00 of labor costs were incurred. B 9 The 6,500 figurines that were in-process at the end of January were assumed to be 70.00% complete to 9 labor and overhead. 1 All figurines in January passed inspection. 2 B Physical Flow of Units Work-in-Process - Beginning Units Started this Period Units to Account for Total transferred out Work-in-Process - Ending Total Accounted for Equivalent Units Material (Round to three places, ##.####.####) Equivalent Units Conversion (Round to three places, ##.###.######) Total cost of Material (Round to two places, ##.####.###) Total cost of Conversion (Round to two places, ##.####.##) Total cost to account for (Round to two places, ###.####.##) Cost per equivalent unit of Material (Round to seven places, #####.# Cost per equivalent unit of Conversion (Round to seven places, #####: January 20,787 units (13. 01} 6,500 units (13. 02} 27,213.000 (13. 03} 25,263.000 (13.04) 14,040.00 (13.05} $ $ 69,753.00 (13. 06} 83,793.00 (13. 07} 0.5159299 (13. 08) 2.3538772 (13. 09} Cost of the units transferred, material and convesion (Round to two places, $####,#####.###) 3.2700000 13. 10} Cost of the ending inventory, material and convesion (Round to two places, $#########.###) 14,063.69 (13. 11} Process Costing - First-In First-Out Mr. Jones, a consultant, has indicated that FIFO process costing would produce more meaningful cost data. General Information The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout. Month of January Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department. Molding Department Goods in-process as of January 1 were 3,400 figurines at a cost of $3,213.00. Of this amount, $2,040.00 was from raw materials added, $782.00 for labor and $391.00 for overhead. These 3,400 figurines were assumed to be 10.00% complete as to labor and overhead. During January, 24,000 units were started, $12,000.00 of materials and $57,753.00 of labor costs were incurred. The 6,500 figurines that were in-process at the end of January were assumed to be 70.00% complete to labor and overhead. All figurines in January passed inspection. Physical Flow of Units Work-in-Process - Beginning Units Started this Period Units to Account for Total transferred out Work-in-Process - Ending Total Accounted for Equivalent Units Material (Round to three places, ##.###.####) Equivalent Units Conversion (Round to three places, ##.###.####) January 20,900 units (15.01} 4,550.000 (15.02} 2,002.400 (15.03} Total cost in the Beginning Inventory (Round to two places, ##,###.##) $ 3,213.00 (15.04} Total cost of Material this period (Round to two places, ##.###.##) $ 12,000.00 (15.05} Total cost of Conversion this period (Round to two places, ##.###.##) $ 58,144.00 (15.06} Total cost to account for (Round to two places, ##.###.###) $ 73,357.00 (15.07} Cost per equivalent unit of Material this period (Round to seven places, ###.# $ 0.50 {15.08} Cost per equivalent unit of Conversion this period (Round to seven places, ###.####### $ 2.42 (15.09) Cost of the units transferred, material and convesion (Round to two places, $###,###.###) $ 61,083.73 (15. 10} Cost of the ending inventory, material and convesion (Round to two places, $####,###.##) $ 18,997.33 (15. 11} Process Costing - Weighted Average With Spoilage Mr. Smith, a consultant, has indicated that the Weighted Average method is appropriate our needs. He is concerned about the number of units that failed inspection and the pricing of the good units completed. General Information The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout. The industrial engineers have studied our system and have determined that the acceptable loss for every hundred units that pass the inspection point is 5 units. Month of January Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department. Molding Department Goods in-process as of January 1 were 3,400 figurines at a cost of $3,213.00. Of this amount, $2,040.00 was from raw materials added, $782.00 for labor and $391.00 for overhead. These 3,400 figurines were assumed to be 10.00% complete as to labor and overhead. During January, 24,000 units were started, $12,000.00 of materials and $57,753.00 of labor costs were incurred. The 6,500 figurines that were in-process at the end of January were assumed to be 70.00% complete to labor and overhead. While normal spoilage is 5% of the good units completed, 2,508 units failed inspection in January. The units are inspected at the end of the process. Physical Flow of Units Work-in-Process - Beginning Units Started this Period Units to Account for Total transferred out Normal spoilage (Roundup to the next unit if needed) Abnormal spoilage Work-in-Process - Ending Total Accounted for January 18,400 units {17. 01} 920 units (17.02} 2,508 units {17.03} 6,500 units {17.04} 27,400 units {17.05} Equivalent Units Material (Round to three places, ##.###.###) Equivalent Units Conversion (Round to three places, ##.###.###) Total cost of Material (Round to two places, ##.###.##) Total cost of Conversion (Round to two places, ##.###.##) Total cost to account for (Round to two places, ##.###.##) Cost per equivalent unit of Material (Round to seven places, ###.#######) 24,000.000 {17. 06} 21,000.000 (17.07} $ 14,040.00 (17.08} $ 63,476.00 {17. 09} $ 77,516.00 {17. 10} $ 0.5856735 {17. 11} Cost per equivalent unit of Conversion (Round to seven places, ###.#######) $ 3.0226667 {17. 12} Cost of the ending inventory, material and convesion (Round to two places, $###,###.## $ 17,164.19 {17. 13} Cost of the units transferred, material and convesion (Round to two places, $###,###.## $ 66,381.07 {17. 14} Cost of the abnormal spoilage (Round to two places, $###,###.## $ 9,048.03 {17. 15}
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