Mang acct hw wk6 - Lecture notes 3 PDF

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management accounting...

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5.8 The equivalent units in beginning WIP are not identified separately. FIFO assumes that the WIP inventory is completed before the production of new units commences. 5.9 FIFO means first in first out ,the work in process is transferred to finished goods before any new units come in. 5.10 Under the weighted average method the cost per equivalent unit is based on the total costs incurred including the cost of beginning WIP. Under FIFO, the equivalent units in opening Work In Process are subtracted from total equivalent units to give equivalent units of new production for the month .

5.27 1.Equivalent direct material units=154500 Equivalent conversion units=145500 Total equivalent units=154500+145500=300000

direct material costs per equivalent unit, (16350+169050)/154500 =1.2 per unit Conversion cost per unit, (43425+240300)/145500 =1.95 per unit Total unit cost , 1.2+1.095 =2.295 per unit (a).no of goods completed x total unit cost =133500x2.295 = 306,382.5 (b) direct material cost, No of equivalent units of direct material x direct material cost per equivalent unit, (154500-133500)x1.2 =25200 Conversion cost, (145500-133500)x1.95 =23400

Total cost, =25200+23400 =48600 2. New equivalent units of direct material in July only, 139500-15000 =124500 New equivalent units of conversion cost in July only, 140250-15000x35% =135000 Total new equivalent cost =124500+135000 =259500 direct material cost per equivalent unit, 169050/124500 =1.357 Conversion cost per equivalent unit, 240300/135000 =1.78 Total cost per equivalent unit, 1.357+1.78 =3.137 (a) Cost of 1 April work in process which is transferred out first, 16350+43425 =59775 Cost of conversion to complete work in process 1 July , (15000x65%)x1.78 =17355

Cost of started and completed units during July, (133500-15000)x3.137 =371734.5 Total cost of goods completed, 59775+17355+371734.5 =448864.5 (b) Direct material cost, (139500-15000)x1.357 =168946.5 Conversion cost, (140250-15000x65%)x1.78 =232290 Total cost , 168946.5+232290 =401236.5

5.38 1.Direct material and conversion of units completed=220000 Direct material unit spoiled=60000 Conversion unit spoiled=60000x25%=15000 Direct material work in process=20000 2.direct material, (58500+114000)/(220000+60000+20000) =0.575 Conversion cost, (24000+76400)/220000+15000+20000x80%) =3.139 Total cost , 0.575+3.139 =3.714

3.cost of unit completed, 220000x3.714 =81708 4.cost of spoiled, 60000x0.575+15000x3.139 =81585 5.direct material cost, =20000x0.575 =11500 Conversion cost, 20000x80%x3.139 =50224 Total cost, 11500+50224 =143309 6.(a)DR cost of goods transferred in(81585+81708+143309)

306602

CR cost of goods completed and transferred out (b)DR cost of goods transferred in

225017

DR loss on abnormal spoiled CR

306602

cost of goods completed and transferred out

81585 306602

7. To use a FIFO approach we would need to identify units that are spoiled from work done on the 1 April work in process inventory and unit that are started and spoiled during April.

5.45 grading department: 1. equivalent units of production, 36000

2.Total manufacturing costs, 265680+86400 =352080 3.cost per unit, (265680+86400)/36000 =9.78

5.Cost of good completed, =36000x9.78 =352080 Saturating department: 1.equivalent units of production, =36000x50% =18000units 2. total manufacturing costs , 85920 3. cost per equivalent unit (kilograms) , 85920/18000 =4.773 4. cost of ending work in process inventory 36000x50%x4.773 =85914 5. cost of goods completed and transferred out 17600+1600x50%x4.773+(36000+1600-2000)x4.773 =257742...