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8/10/2019 Cost Management Chapter 3 Problems -Fifth Edition
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roblems
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Problem 3.1
Unit Reconc i l iat ion
Units in beginning WIP (100% Material, 60% conversion) 11000Units Started 105000Unit to Account For 116000Units Completed 110900
Units in Ending WIP (70% conversion) 5100Units accounted For 116000
Material Labor OverheadBegining WIP $4,000.00 $200.00 $300.00
Cost Incurred during May $76,500.00 $8,880.00 $9,915.00
Total Cost $80,500.00 $9,080.00 $10,215.00
Units Material Labor OverheadUnits Completed 110900 110900 110900
Equivalent Units,ending WIP 5100 3570 3570
Total 116000 114470 114470
Costs per Equivalent Units(Total Costs/Total units) $0.69 $0.08 $0.09
Cost Reconcilliation Total
Total Costs to account for $99,795.00Cost of completed units $95,654.02Cost of ending WIP
Material $3,539.22Labour $283.18
Overhead $318.58 $4,140.98Total Costs accounted for $99,795.00
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Problem 3.2
Unit Reconc i l iat ion
Units in beginning WIP (80% Material, 70% conversion) 600Units Started 2700Unit to Account For 3300
Units Completed 2600Units in Ending WIP (70% Material, 60% conversion) 700Units accounted For 3300
Material Labor CostsBegining WIP $45,000.00 $11,000.00Cost Incurred during August $269,080.00 $77,800.00
Total Cost $314,080.00 $88,800.00
Units
Units Completed 2600 2600Equivalent Units,ending WIP 490 420Total 3090 3020
Costs per Equivalent Units $101.64 $29.40
(Total Costs/Total units)
Cost Reconcilliation
Total Costs to account for 980,080.00Cost of completed units 837,651.92Cost of ending WIPMaterial 49,805.57Labour 12,349.67Overhead 80,272.85 142,428.08
Total Costs to account for 980,080.00
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Problem 3.3
Unit Reconci l iat ion
Units in beginning WIP (65% Material, 35% conversion) 5000Units Started 6000Unit to Account For 11000Units Completed 4000
Units in Ending WIP (75% Material, 50% conversion) 7000Units accounted For 11000
Material Labor OverheadCostsBegining WIP $170,000.00 $160,000.00 $50,000.00
Cost Incurred during october $422,000.00 $1,055,000.00 $107,500.00
Total Cost $592,000.00 $1,215,000.00 $157,500.00
UnitsUnits Completed 4000 4000 4000
Equivalent Units,ending WIP 5250 3500 3500
Total 9250 7500 7500
Costs per Equivalent Units $64.00 $162.00 $21.00(Total Costs/Total units)
Cost Reconcilliation
Total Costs to account for $1,964,500
Cost of completed units $988,000Cost of ending WIPMaterial $336,000Labour $567,000Overhead $73,500 $976,500
Total Costs to account for $1,964,500
Production Cost Report
Journal Entry: Not Required
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Total
$380,000.00$1,584,500.00
$1,964,500.00
$247.00
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Unit reconciliation
Cost per equivalent unit calculation
Material Labor Cost
Beginning WIP $6,000 $2,000
Cost incurred during April $26,500 $12,350
Total $32,500 $14,350
Units
Units Completed 33,000 33,000
Equivalent units, Ending WIP 8,000 4,000
Total 41,000 37,000
Cost per equivalent unit $0.79 $0.39
Total Cost per unit $1.64
Cost Reconciliation
Total cost to account for
Cost of completed units
Cost of Ending WIP
Material
Labor
Manufacturing Overhead
Total Cost account for
Production Cost Report
Aussie yearn company
August, xxxx
nits in beginning WIP (100% material, 70% conversion cost
Units account for
Units started in August
Units to account for
Units completed
Units ending in WIP (100% material, 50% conversion cost)
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Journal Entries are not required
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Journal Entries are ignored;
No of boxes 125,000
Cost of Box $ 0.90
Material Cost % 40Labor Cost % 15Manufacturing overheads % 45
Direct Material cost $ 45000Direct Labor cost $ 16875
Manufacturing overhead $ 50625
Cost of goods sold $ 112500
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7002,700
3,400
2,300
100% material, 70% conv. costs) 1,100
3,400
Material Labor Overhead Total$450 $1,200 $2,400 $4,050
4,125 11,610 23,830 39,565
$4,575 $12,810 $26,230 $43,615
2,300 2,300 2,3001,100 770 770
3,400 3,070 3,070
$1.35 $4.17 $8.54 $14.06
Problem P3-7 Production Cost Report, Missing Data
Classic 50s Flooring produces linoleum flooring. Below is a partial production cost report for the Mixing
Department. In the report, a unit is a gallon of linoleum cement (a mixture of linseed oil, pine resin, and woodflour).
Production Cost ReportMixing Department
June
Quantity ReconciliationUnits in beginning WIP
Units started
Units to account for
Units completed
Units in ending WIP (
Units accounted for
Cost Per Equivalent Unit Calculation
CostBeginning WIP
Cost incurred during June
Total
Required:
Fill in the missing data (items a through l).
Units
Units completed
Equivalent units, ending WIP
Total
Cost per equivalent unit
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100% material, 10% conv. costs) 8,000
512,000520,000
515,000
100% material, 20% conv. costs) 5,000
520,000
Material Labor Overhead Total$45,200 $10,500 $26,300 $82,000
890,800 711,900 1,335,940 $2,938,640
$936,000 $722,400 $1,362,240 $3,020,640
515,000 515,000 515,0005,000 1,000 1,000
520,000 516,000 516,000
$1.80 $1.40 $2.64 $5.84
$3,020,640$3,007,600
$9,000$1,400
$2,640 $13,040Total cost accounted for $3,020,640
Cost Reconciliation
Problem P3-8 Production Cost Report, Missing Information
Production Cost ReportMarion Chemicals
Dec-11
Unit Reconciliation
Units startedUnits to account for
Units in beginning WIP (
Units completed
Units in ending WIP (
Units accounted for
Required:
Fill in the missing data (items a through l).
UnitsUnits completed
Equivalent units, ending WIP
Total
Cost per equivalent unit
Material
Overhead
Labor
Total Cost to account forCost of completed itemsCost of ending WIP
Cost Per Equivalent Unit Calculation
Cost
Beginning WIP
Cost incurred in December
Total
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Chapter 3 : Prolem 3.9
Mixing Department
Unit at the beginning 15000
(100% M; 90% C)
Unit Started 660000
Total 675000
Unit completed 635000
Cl WIP (100% M; 70% C) 40000
675000
Material Labour OH
Op WIP 8500 1200 2500Cost incurred during the month 254750 78360 130700
Total 263250 79560 133200
Unit Completed 635000 635000 635000
EU of WIP 40000 28000 28000
Total 675000 663000 663000
Cost per EU 0.3900 0.1200 0.2009
Value of Cl WIP in Mixing Dept
Material 15600
Labour 3360
OH 5625
Cl WIP in mixing Dept 24585
Trasferred out Cost 451425
Total 476010
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Packing Department
Unit at the beginning 14500
( 60%M; 50% C)
Unit Started 635000
Total 649500
Unit completed 611500
Cl WIP (80%M; 60% C) 38000
Total 649500
Total Direct Material
12200 Beginning WIP 925463810 Cost incurred during March 88941
476010 Total 89866
Units Completed 611500
Cl WIP - EU 30400
Total 641900
0.7109 Cost per EU 0.1400
Value of Cl WIP of Packing Dept
Direct Material 4256
Trf-in cost 24645
Labour 456
OH 684
Closing WIP of Shaping Dept 30041
Cost of Finished Goods 546770
Total 576811
Summary
Closing WIP in Mixing Dept 24585.34
Closing WIP of Shaping Dept 30041.07
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Cost of Finished Goods 546769.59
Total 601396.00
Cost per unit of Shampoo 0.8941
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Tranf-in Labour OH Total
3805.00 60.00 115.00 4905.00451425 12626 18914 571906
455230 12686 19029 576811
611500 611500 611500
35000 22800 22800
646500 634300 634300
0.7041 0.0200 0.0300 0.8941
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Chapter 3 : Prolem 3.10
Mixing Department
Unit at the beginning 5000
(100% M; 70% C)
Unit Started 45000
Total 50000
Unit completed 47000
Cl WIP (100% M; 50% C) 3000
50000
Material Labour OH
Op WIP 4000 1600 1900Cost incurred during the month 45440 23310 25830
Total 49440 24910 27730
Unit Completed 47000 47000 47000
EU of WIP 3000 1500 1500
Total 50000 48500 48500
Cost per EU 0.9888 0.5136 0.5718
Value of Cl WIP in Mixing Dept
Material 2966
Labour 770
OH 858
Cl WIP in mixing Dept 4594
Trasferred out Cost 97486
Total 102080
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Shaping Department
Unit at the beginning 5000
( 80% C)
Unit Started 47000
Total 52000
Unit completed 50500
Cl WIP (60% C) 1500
Total 52000
Total Tranf-in Labour
7500 Beginning WIP 4420 80094580 Cost incurred during March 97486 13584
102080 Total 101906 14384
Units Completed 50500 50500
Cl WIP - EU 1500 900
Total 52000 51400
2.0742 Cost per EU 1.9597 0.2798
Value of Cl WIP of Shaping Dept
Trf-in cost 2940
Labour 252
OH 174
Closing WIP of Shaping Dept 3365
Cost of Finished Goods 122844
Total 126210
Summary
Closing WIP in Mixing Dept 4594.44
Closing WIP of Shaping Dept 3365.14
Cost of Finished Goods 122844.42
Total 130804.00
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Cost per unit of Candy 2.4326
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OH Total
600 58209320 120390
9920 126210
50500
900
51400
0.1930 2.4326
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Tropical Sun Limited
Unit Reconci l iat ion
Units in beginning WIP (80% material, 55% conversion) 7500Units Started 97000Unit to Account For 104500
Units Completed 92500Units in Ending WIP (65% Material, 20% conversion) 12000Units accounted For 104500
Cost per equivalent unit calculation
Material Conversion Cost Total
Cost
Beginning WIP 7000 8000 15000Cost incurred 106473 143632 250105Total Cost 113473 151632 265105
UnitsUnits Completed 92500 92500EQU, ending WIP 7800 2400Cost per equivalent unit 1.13 1.60 2.73
Cost Reconci l ia t ion
Total Cost to Account For 265105Cost of Completed Units 252446Cost of Ending WIP
Material 8824 Conversion Cost 3835
12659
265105
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Kia Corporation
Unit Reconci l iat ion
Units in beginning WIP (85% conversion) 6000Units Started 33000Unit to Account For 39000
Units Completed 29500Units in Ending WIP (55% conversion) 9500Units accounted For 39000
Cost per equivalent unit calculation
Material Labor Overhead
Cost
Beginning WIP 260000Cost incurred 1535250 162500 455000Total Cost 1795250
UnitsUnits Completed 29500EQU, ending WIP 9500Cost per equivalent unit 46.03
Cost Reconci l ia t ion
Total Cost to Account For 2482750Cost of Completed Units 1941999Cost of Ending WIP
Material 437304 Conversion Cost 103447Total Cost 540751
2482750
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Conversion Cost Total
70000 330000617500 2770250687500 2482750
29500522519.80 65.83
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Hartwell Drug Company
Unit Reconci l iat ion
Units in beginning WIP (40% Complete) 600Units Started 1000Unit to Account For 1600
Units Completed 1300Units in Ending WIP (80% Complete) 300Units accounted For 1600
Cost per equivalent unit calculation
Material Labor Overhead Conversion Cost
Cost
Beginning WIP 0 36000 6000 42000Cost incurred 0 102780 49000 151780Total Cost 0 138780 55000 193780
UnitsUnits Completed 1300 1300 1300 1300EQU, ending WIP 300 240 240 240Cost per equivalent unit 0.00 90.12 35.71 125.83
Cost Reconci l ia t ion
Total Cost to Account For 193780Cost of Completed Units 163580.52 This is also conversion cost ofCost of Ending WIP
Material 0.00 Labor 21628.05 Overhead 8571.43
193780.00
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Total
42000151780193780
125.83
nits completed in March
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Sassy Cotton Company
Unit Reconci l iat ion
Units in beginning WIP (100% Material, 40% conversion) 8000Units Started 31000Unit to Account For 39000Units Completed 30500Units in Ending WIP (60% conversion) 8500Units accounted For 39000
Cost per equivalent unit calculation
Material Labor Overhead
Cost
Beginning WIP $7,500 $3,400 $2,200Cost incurred $33,060 $10,484 $17,024Total Cost $40,560 $13,884 $19,224
Units
Units Completed 30500 30500 30500
EQU, ending WIP 8500 5100 5100Cost per equivalent unit $1.04 $0.39 $0.54
Cost Reconci l iat ion
Total Cost to Account For $73,668.00Cost of Completed Units $60,085.00Cost of Ending WIP
Material $8,840.00 Labor $1,989.00
Overead $2,754.00$13,583.00
$73,668.00
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Total
$13,100$60,568$73,668
$1.97
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Lindy Glitter
Unit Reconci l iat ion
Units in beginning WIP (100% Material, 70% conversion) 8000Units Started 83000Unit to Account For 91000Units Completed 89200Units in Ending WIP (80% conversion) 1800Units accounted For 91000
Cost per equivalent unit calculation
Material Labor Overhead Conversio
Cost
Beginning WIP $3,000.00 $300.00 $200.00Cost incurred $71,700.00 $7,764.00 $8,760.00Total Cost $74,700.00 $8,064.00 $8,960.00
Units
Units Completed 89200 89200 89200
EQU, ending WIP 1800 1440 1440Cost per equivalent unit $0.82 $0.09 $0.10
Cost Reconci l iat ion
Total Cost to Account For $91,724.00Cost of Completed Units $89,975.96Cost of Ending WIP
Material $1,477.58 Labor $128.11
Overead $142.35$1,748.04
$91,724.00
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Total
$3,500.00$88,224.00$91,724.00
$1.01
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Unit Information
work in process, May 1 (75% complete) 40000Units started during May 90000Total to account for 130000
Units completed 110000Units ending in WIP(45% complete) 20000Total Units Account for 130000
Cost Information
Direct Mat Coversion TotalWork in Process, May 1 43000 340300 383300Cost incurred during May 87000 733080 820080
Total 130000 1073380 1203380
UnitsUnits completed 110000 110000Equivalent Units ending WIP (45% complete) 20000 9000total 130000 119000Cost per Equivalent Unit 1.00 9.02 10.02
Cost Reconciliation
Total Cost accounted for 1203380
Cost of completed units 1102200Cost of Ending WIPMaterial 20000Conversion 81180Total 101180 101180
Total 1203380
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Chapter 3 : Prolem 3.17150000
$1.75$262,500.00$144,375.00$65,625.00$52,500.00
$262,500.00
$0.35
Journal entries are ignored
Overhead Rate per unit
Cost of Goods Sold
Number of units producedPer unit costTotal CostDirect MaterialLabor CostManufacturing Overhead
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Chapter 3 : Prolem 3.18Total Per unit Old Production New Production
300,000 300,000 350,000$15,000 0.05 $15,000.00 $17,500.00$30,000 0.1 $30,000.00 $35,000.00
$105,000 $105,000.00 $105,000.00$150,000 $150,000.00 $157,500.00
$0.50 $0.45
Since the motivation for increasing the capacity is mainly to reduce the cost by shifting a part o
Equivalent cost per unit
Number of units ProducedDirect MaterialsDirect LaborManufacturing overheadTotal costs
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f overhead to next peirod, it is not a good idea.