ACCT 212 Chapter : Chapter 3-4 Notes 17-18notes
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Problem 6
Luxemburg Corporation produces medical grade isotopes.Theisotopes are produced in single continuous process and Luxemburguses de FIFO process costing method of accounting forproduction.
The production process requires constant utilization offacilities and equipment, as well as direct labor by skilledtechnicians.As a result, direct labor and factory overhead are bothdeemed to be introduced uniformly throughout production.
Luxemburg Corporation prepared the following âunitreconciliationâ for the month of April:
UNIT RECONCILIATION | |||||||||
QUANTITY | |||||||||
Beginning Work in Process | 7,500 | ||||||||
Started into Production | 9,000 | ||||||||
Total Units into Production | 16,500 | EQUIVALENT UNITS CALCULATIONS: | |||||||
CONVERSION | |||||||||
DIRECT | DIRECT | FACTORY | |||||||
2,250 | 2,625 | 2,625 | |||||||
4,500 | 4,500 | 4,500 | |||||||
3,150 | 2,250 | 2,250 | |||||||
To Finished Goods | 9,900 | 9,375 | 9,375 | ||||||
From beginning WIP | 7,500 | ||||||||
Started and Completed | 4,500 | ||||||||
Ending Work in Process | 4,500 | ||||||||
Total Units Reconciled | 16,500 | ||||||||
The above beginning work in process inventory had an assignedcost of $4,500,000, divided between direct materials (30%), directlabor (35%), and factory overhead (35%).
Additional costs incurred during April were $15,000,000, dividedbetween direct materials (15%), direct labor (20%), and factoryoverhead (65%).
Prepare a schedule showing the calculation of cost perequivalent unit.
WORKSHEET # 6
COST PER EQUIVALENT UNIT:
CONVERSION | ||||||||
TOTAL COST | DIRECT | DIRECT | FACTORY | |||||
Beginning Work in Process | ||||||||
Cost incurred during period | ||||||||
Total cost | ||||||||
Equivalent units | ||||||||
Cost per equivalent unit |
Exercise 16-15 Weighted average: Completing a process costsummary LO C3
The following partially completed process cost summary describesthe July production activities of Ashad Company. Its productionoutput is sent to its warehouse for shipping. All direct materialsare added to products when processing begins. Beginning goods inprocess inventory is 20% complete with respect to direct labor andoverhead. Ending work in process inventory is 60% complete withrespect to conversion. |
Equivalent units of production | Direct Materials | Direct Labor | Factory Overhead | |||
Units transferred out | 127,000 | 127,000 | 127,000 | |||
Units of ending goods in process | 15,000 | 9,000 | 9,000 | |||
| ||||||
Equivalent units of production | 142,000 | 136,000 | 136,000 | |||
| ||||||
Costs | Direct Materials | Direct Labor | Factory Overhead | |||
Costs of beginning goods in process | $ | 38,500 | $ | 1,400 | $ | 2,800 |
Costs incurred this period | 856,100 | 168,600 | 337,200 | |||
| ||||||
Total costs | $ | 894,600 | $ | 170,000 | $ | 340,000 |
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Units in beginning goods in process (all completed during July) | 8,000 |
Units started this period | 134,000 |
Units completed and transferred out | 127,000 |
Units in ending goods in process | 15,000 |
Prepare its process cost summary using the weighted-averagemethod. (Round "Cost per EUP" to 2 decimalplaces.) |
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