# BUS-2003 Study Guide - Midterm Guide: Activity-Based Costing, Weighted Arithmetic Mean, Deutsche Luft Hansa

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Published on 6 Oct 2011
School
University of Winnipeg
Department
Course
BUS-2003
BUS2003
Test 2
October 18, 2010
Name:____________________________________________________
Student Number: __________________________________________
Instructions: Please answer the following questions on the examination test sheets. If you
need more room, please use the back of the pages. Show your calculations in detail.
Q1
/16
Q2
/20
Q3
/ 9
Q4
/ 3
Total
/48
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Question One: (16 marks)
Staffordville Company produces baseball bats and cricket paddles. It has two departments
that process all products, Cutting and Finishing. During July the beginning work in
process in the Cutting department was half completed as to conversion and complete as to
direct materials. The beginning inventory included \$40,000 for materials and \$60,000 for
conversion costs. Ending work in process inventory in the Cutting department was 40
percent complete. Direct materials are added at the beginning of the cutting process.
Beginning work in process in the Finishing department was 80 percent complete as to
conversion. Direct materials for finishing the units are added at the end of the process.
Beginning inventories included \$24,000 for transferred-in costs and \$28,000 for
conversion costs. Ending work in process inventory for the Finishing department was 30
Cutting Finishing
---------- ------------
Beginning work in process units 20,000 24,000
Units started this period 60,000 ?
Units transferred this period 64,000 68,000
Ending work in process units 20,000
Conversion costs 28,000 68,200
Transferred-out cost 128,240 ?
Required:
a) Prepare a production cost worksheet using the weighted average method for
the Finishing department. Be sure to reconcile total units and total costs.
(Round to the nearest cent for dollar calculations). (14 marks)
b) Prepare the journal entry to record the transfer of goods from the Cutting
Department to the Finishing Department for the month. (2 marks)
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Question One Solution:
a)
Finishing Department
Cost Production Worksheet
Equivalent Units Calc
Physical DM CON Trans-In
BI 24,000
Started 64,000
Total 88,000
Completed 68,000 100% 68,000 100% 68,000 100% 68,000
EI 20,000 0% 0 30% 6,000 100% 20,000
Total 88,000 68,000 74,000 88,000
1 mark for balancing to 88,000 units
1 mark for units started
1 mark for each ending inventory cost category = 3 marks
Unit Cost
Total DM CON Trans-In
BI 52,000 0 28,000 24,000
Total 282,440 34,000 96,200 152,240
/ units 68,000 74,000 88,000
Unit cost 3.53 0.50 1.30 1.73
1 mark for added trans-in costs
1 mark for each unit cost amounts – cfw = 4 marks
Cost Reconciliation:
Cost of units transferred (68,000 x 3.53) 240,040 1 mark
Ending Inventory:
CON (6,000 x \$1.30) 7,800 1 mark
Trans-in (20,000 x \$1.73) 34,600 42,400 1 mark
Total 282,440
1 mark for matching 282,440 totals
b) WIP – Finishing 128,240
WIP – Cutting 128,240
1 mark for each line = 2 marks total
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