Question

12.Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $700,000, and direct labor costs to be $350,000. Actual overhead costs for the year totaled $710,000, and actual direct labor costs totaled $390,000. At year-end, the balance in the Factory Overhead account is a:

18.

Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department:

Units:
Beginning Inventory: 94,000 units, 80% complete as to materials and 25% complete as to conversion.
Units started and completed: 264,000.
Units completed and transferred out: 358,000.
Ending Inventory: 37,000 units, 40% complete as to materials and 15% complete as to conversion.

Costs:
Costs in beginning Work in Process - Direct Materials: $51,200.
Costs in beginning Work in Process - Conversion: $93,700.
Costs incurred in October - Direct Materials: $791,980.
Costs incurred in October - Conversion: $1,164,680.

Calculate the cost per equivalent unit of conversion.

20.During November, the production department of a process operations system completed and transferred to finished goods 20,000 units that were in process at the beginning of November and 200,000 that were started and completed in November. November's beginning inventory units were 100% complete with respect to materials and 70% complete with respect to conversion. At the end of November, 20,000 additional units were in process in the production department and were 100% complete with respect to materials and 60% complete with respect to conversion. Compute the number of equivalent units with respect to conversion for November using the weighted-average method.

21.During March, the production department of a process operations system completed and transferred to finished goods 20,000 units that were in process at the beginning of March and 170,000 units that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 65% complete with respect to labor. At the end of March, 37,000 additional units were in process in the production department and were 100% complete with respect to materials and 40% complete with respect to labor. The production department incurred direct materials cost of $255,000 and its beginning inventory included materials cost of $94,100. Compute the direct materials cost per equivalent unit for the department using the weighted-average method.

Answer 1

Req 1.
OH rate as % of DLC:
Estimated Overheads		7,00,000
Divide: Estimated DLC		3,50,000
OH rate as % of DLC:			200%
Actual DLC			3,90,000
Multiply: OH rate			200%
Overheads applied			7,80,000
OH incurred			7,10,000
Credit balance of OH			70,000
Answer is $70,000 Credit
Req 2.
Cost per equivalent unit of conversion = $3.425
Equivalent Units:
				Conversion
			UNITS	% Completion	Units
Units completed from Beg. WIP	94000	75%	70,500
Units started and completed	264000	100%	2,64,000
Ending Work in Process	37000	15%	5,550
Total Equivalent units	395000		3,40,050
TOTAL COST TO ACCOUNT FOR:
				Conversion
Cost Added during May		11,64,680
Divide: EUP of Conversion		3,40,050
Conversion cost per EUP		3.425
Req 3.
Equivalent units of conversion is 232,000 units
Equivalent Units:
				Conversion
			UNITS	% Completion	Units
Units completd and transferred out	220000	100%	2,20,000
Ending Work in Process	20000	60%	12,000
Total Equivalent units	240000		2,32,000
Req 4.
Cost per EUP of material is $ 1.54
Equivalent Units:
				Material
			UNITS	% Completion	Units
Units completd and transferred out	190000	100%	1,90,000
Ending Work in Process	37000	100%	37,000
Total Equivalent units	227000		2,27,000
TOTAL COST TO ACCOUNT FOR:
				Material
Beginning work in Process		94,100
Cost Added during May		2,55,000
Total Cost to account for:		3,49,100
Divide: EUP of material		227000
Cost per equivalent unit of material	1.54