Question
In: Accounting
1. A company uses a process costing system and the weighted average method for inventory costs....
1. A company uses a process costing system and the weighted
average method for inventory costs. The following information is
available regarding direct labor for the current year:
| Work in Process, January 1 | 5,500 units, 80% complete |
| Work in Process, December 31 | 8,800 units, 40% complete |
| Units completed and transferred to finished goods | 46,900 units |
| Direct labor costs during the year | $266,300 |
(a) Calculate the equivalent units of production for direct labor
for the year.
(b) Calculate the average cost per equivalent unit for direct labor
(round to the nearest cent).
2. Refer to the following information about the Finishing
Department in the Davidson Factory for the month of June. Davidson
Factory uses the FIFO method of inventory costing.
| Beginning Work in Process inventory: | ||
| Physical units | 5,000 | units |
| % complete for materials | 70% | |
| % complete for labor and overhead | 25% | |
| Materials cost from May | $7,350 | |
| Labor and overhead cost from May | $3,125 | |
| Product started and completed: | ||
| Physical units | 40,000 | units |
| Ending Work in Process inventory: | ||
| Physical units | 4,000 | units |
| % complete for materials | 40% | |
| % complete for labor and overhead | 10% | |
| Manufacturing costs for June: | ||
| Materials | $96,975 | |
| Labor and overhead | $79,470 |
Compute equivalent units for direct materials, direct labor and
overhead for June.
3. A company has two products: A and B. It uses a plantwide
overhead allocation method based on activity 2 and has prepared the
following analysis showing budgeted costs and activities. Use this
information to compute (a) the company's plantwide overhead rate
and (b) the amount of overhead allocated to Product A.
| Budgeted Activity | ||||
Activity Cost Pool |
Budgeted Overhead Cost |
Product A |
Product B |
Total |
| Activity 1 | $160,000 | 400 | 1,600 | 2,000 |
| Activity 2 | $110,000 | 2,000 | 1,000 | 3,000 |
| Activity 3 | $180,000 | 1,200 | 10,800 | 12,000 |
| Total budgeted overhead | $450,000 | |||
Solutions
Expert Solution
1.
| Weighted average cost | |||
| Beggining units | 5500 | Transferred out | 46,900 |
| Started intro production | 50200 | Ending units | 8,800 |
| Units accounted for | 55700 | 55700 | |
| Equivalent units | Labor | ||
| Units transferred A | 46900 | ||
| Ending Units | 8,800 | ||
| Completion | 40% | ||
| B | 3520 | ||
| Total units | 50420 | ||
| Cost per equivalent units | |||
| Particulars | Labor | ||
| Cost to be accounted for | 266300 | ||
| Total eqivalent units | 50420 | ||
| Cost per equivalent unit | 5.28 | ||
| Cost per equivalent unit = Cost to be accounted for / Total equivalent units | |||
2.
| FIFO method | |||
| Beggining units | 5000 | Transferred out | 45,000 |
| Started into production | 44000 | Ending units | 4,000 |
| 49000 | 49000 | ||
| Equivalent units | Material | Conversion | |
| Beginning units | 5000 | 5000 | |
| Completion in current period | 30% | 75% | |
| A | 1500 | 3750 | |
| Units started and completed | 40000 | 40000 | |
| Completion | 100% | 100% | |
| B | 40000 | 40000 | |
| Ending Units | 4,000 | 4,000 | |
| Completion | 40% | 10% | |
| C | 1600 | 400 | |
| Total units A+B+C | 43100 | 44150 |
3. Plantwide overhead rate activity 2 = 450000/3000= 150
For product A = 150*2000= 300000
ekkarill92 answered 1 year agoRelated Solutions
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