Brooks Inc. uses process costing. I really understood the explanations given, Your email address will not be published. The cost per equivalent unit for conversion costs. Packaging department: 100 units, 3/4 complete as to packaging materials and 1/4 complete as to direct labor. The following information was obtained from the department’s quantity schedule: Equivalent units of production calculation. 19____, (Cost from preceding departments / Units from preceding departments – Lost units) – Unit cost from preceding department, (5,000 × 1.80) = $9,000 / 50,000 = $0.18. Accounting For Management, Explanations, Exercises, Problems and Calculators, Exercise 1: Computation of equivalent units under weighted average and FIFO method, Exercise 2: Preparation of quantity schedule in process costing, Exercise 3: Quantity schedule and equivalent units, Exercise 4: Cost per equivalent unit – weighted average and FIFO method, Exercise 5: Equivalent units, cost per equivalent unit – weighted average method, Exercise 6: cost reconciliation – weighted average method, Exercise 7: Quantity schedule, cost per equivalent units – FIFO method, Exercise 8: Cost reconciliation – FIFO method, Exercise 9: Process costing journal entries, Exercise 10: Cost of production report of 2nd department, Exercise 11: Cost of production report – normal loss, Exercise 12: Cost of production report – abnormal loss, Exercise 13: Cost of production report – normal loss at the end of process, Solutions: Available for all 13 exercises. Materials are added in the beginning of the process in department B. Brooks Inc. View 2_Exercises_Job_order_costing_with_solution.pdf from AA 1Ágnes Siklósi PhD Managerial Accounting Job-Order Costing Seminar 2 True/False Questions 1. 4-2 Job-order and processing costing are similar in the following ways: 1.Job-order costing and process costing have the same basic purposes—to assign It is ascertained that in each process normally 5% of the total weight is lost and 10% is scrap which from processes A and B realizes Rs.80 … Department 2 (2) cost per equivalent unit for conversion costs: During February, the Assembly department received 60,000 units from Cutting department at a unit cost of $3.54. Costs added in the Assembly department were: materials, $41,650; labor, $101,700; and factory overhead. Required: The cost of production report for Department 2 for April. Materials = 50,000 + 9,000 + 1,000/2 lost units = 59,500 units, Labor and factory overhead = 50,000 + (9,000 × 2/3) + 1,000/2 lost units = 56,500, Materials = $41,650 / 59,500 = $0.70 per unit, Labor = $101,700 / 56,500 = $1.80 per unit, Factory overhead = $56,500 / 56,500 = $1.00 per unit. Equivalent Units of Production: During April, 20,000 units were transferred in from department A at a … Managerial and Cost Accounting Exercises I 14 Problem 4: Solution Solution 4 a1)of the raw materials purchases remain in ending raw materials inventory. Transferred in during the month (12,000 units), Unit cost for units transferred in from department 1. Labor and factory overhead = 9,000 + (2,000 × 70%) + 450 + 550, Materials = $18,000 / 9,000 = $2.00 per unit, Labor and factory overhead = $45,600 / 11,400 = $4.00 per unit. 25% a2)e total amount placed into process was $20,125,000 (($10,500,000 X 75%) + $7,000,000 + $5,250,000)). Exercise 2: Preparation of quantity schedule in process costing Exercise 3: Quantity schedule and equivalent units Exercise 4: Cost per equivalent unit – weighted average and FIFO method Materials cost of $6,500 and conversion cost of $9,000 were added in department B. Hettinger Inc., uses process costing system in its two producing departments. Of the 60,000 units received, 50,000 were transferred out; 9,000 units were in process at the end of the month (all materials, 2/3 converted); 1,000 lost units were 1/2 complete as to materials and conversion costs. Equivalent units of Fabrication department’s direct labor in all inventories, Jun 30, 19___, Equivalent units of packaging materials in all inventories, June 30, 19___. Calculate equivalent units of production. On April 30, department B had 5,000 units of work in process 60% complete as to conversion as costs. Assembly department: 1,000 units, 2/5 complete as to direct labor. For the Month of June, 19___, Materials = 7,000 + (5,000 × 50%) = 9,500 units, Labor and factory overhead = 7,000 + (5,000 × 25%) = 8,250 units. Addition of materials and beginning inventory, Business and Quality Improvement Programs, Costing of Units Transferred Out; Abnormal Loss, Cost of Production Report; Normal and Abnormal Loss, Cost of Production Report; Spoiled Units – Normal and Abnormal, Definition and explanation of process costing system, Characteristics and Procedures of Process Costing System, Procedure for Materials, Labor and Factory Overhead Costs in a Process Costing System, General Questions and Answers About Process Costing, Cost Flow and Journal Entries–Process Costing System, Characteristics and Procedure of Process Costing System, General Questions and Answers about Process Costing System, Accounting Principles and Accounting Equation. During march ,10,500 units were put into process. Systems Design: Process Costing Solutions to Questions 4-1 A process costing system should be used in situations where a homogeneous product is produced on a continuous basis. What is the treatment of normal and abnormal loss in process costing system? Accounting students can take help from Video lectures, handouts, helping materials, assignments solution, On-line Quizzes, GDB, Past Papers, books and Solved problems. There was no beginning inventory. Labor and factory overhead = 25,000 + (42,00 × 50%) + (750 × 96%) + (50 × 96%), Materials = $12,500 / 25,000 = $.50 per unit, Labor and factory overhead = $139,340 / 27,888 = $5.00 per unit. Your email address will not be published. Cost of Production Report The cost department collected following figures for department 2: Required: A cost of production report for department 2 for December. (25% X $10,500,000 = $2,625,000). The costs for Department 2 for April were: The degree of completion of the work in process as to costs originating in department 2 was: 50% of units were 40% complete; 20% were 30% complete; and the balance were 20% complete. A spoilage rate of 3% of good output is considered normal. The product of a manufacturing concern passes through two processes A and B and then to finished stock. Shipping for finished goods are: 400 units. The Sterling Company uses process costing. Department 2 In department B, conversion costs are incurred uniformly throughout the process. Journal Entry #3 cites administrative salaries at $20,000.00, but in the Solutions section, administrative salaries are posted in the journal at $200,000.00. Units received from preceding department A, (Abnormal loss – 1/2 materials, labor, and overhead), Labor and factory overhead = 9,000 + (2,000, Conversion cost (labor + factory overhead), Ending work in process inventory (50% complete). The T account for Work in Process in the Solutions carries an opening balance of $20,000.00, but the balance given in the actual question is $15,000. Required fields are marked *. Cost of Production Report The entire loss is considered abnormal and is to be charged to factory overhead. A company’s Department 2 costs for June were: The quantity schedule shows 12,000 units were received during the month from Department 1; 7,000 units were transferred to finished goods; and 5,000 units in process at the end of June were 50% complete as to materials cost and 25% complete as to conversion cost. At the end of the fiscal year, June 30, the following inventory of product D is on hand: Very fascinating! Prepare the format of cost of production report. The number of equivalent units of packaging materials in all inventories at June 30. The number of equivalent units of the fabrication department’s direct labor in all inventories at June 30.
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