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Equivalent Units and Related Costs; Cost of Production Report; Entries

Dover Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the materials pass through the Reaction and Filling departments, emerging as finished chemicals.

The balance in the account Work in Process—Filling was as follows on January 1:

The following costs were charged to Work in Process—Filling during January:

During January, 44,800 units of specialty chemicals were completed. Work in Process—Filling Department on January 31 was 3,900 units, 50% completed.

Required:

1. Prepare a cost of production report for the Filling Department for January. If an amount is zero, enter "0". If required, round your cost per equivalent unit answers to two decimal places.

2. Journalize the entries for (1) costs transferred from Reaction to Filling and (2) the cost transferred from Filling to Finished Goods.

3. Determine the increase or decrease in the cost per equivalent unit from Decemberto January for direct materials and conversion costs. If required, round your answers to two decimal places.

4. The cost of production report may be used as the basis for allocating product costs between and . The report can also be used to control costs by holding each department head responsible for the units entering production and the costs incurred in the department. Any differences in unit product costs from one month to another, such as those in part (3), can be studied carefully and any significant differences investigated.

Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments--Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):

Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.

Required:

For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base. For questions 9-15, assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments.

1. What was the company’s plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)

2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

3. What was the total manufacturing cost assigned to Job P? (Do not round intermediate calculations.)

4. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

5. What was the total manufacturing cost assigned to Job Q? (Do not round intermediate calculations.)

6. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

7. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)

8. What was Sweeten Company’s cost of goods sold for March?

9. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department?

10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q?

11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

12. If Job P included 20 units, what was its unit product cost?

13. If Job Q included 30 units, what was its unit product cost?

14. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (Do not round intermediate calculations.)

15. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)

Appendix: Normal and Abnormal Spoilage in Process Costing, Changes in Output Measures, Multiple Departments Grayson Company produces an industrial chemical used for cleaning and lubricating machinery. In the Mixing Department, liquid and dry chemicals are blended to form slurry. Output is measured in gallons. In the Baking Department, the slurry is subjected to high heat, and the residue appears in irregular lumps. Output is measured in pounds. In the Grinding Department, the irregular lumps are ground into a powder, and this powder is placed in 50-pound bags. Output is measured in bags produced. In April, the company reported the following data: The Mixing Department transferred 50,000 gallons to the Baking Department, costing $250,000. Each gallon of slurry weighs two pounds. The Baking Department transferred 100,000 pounds (irregular lumps) to the Grinding Department. At the beginning of the month, there were 5,000 gallons of slurry in process, 25 percent complete, costing $35,000 (transferred-in cost of $25,000 plus conversion cost of $10,000). No additional direct materials are added in the Baking Department. At the end of April, there was no ending work in process. Conversion costs for the month totaled $205,000. Normal loss during baking is 5 percent of good output. All transferred-in materials are lost, but since loss occurs uniformly throughout the process, only 50 percent of the conversion units are assumed to be lost. The Grinding Department transferred 2,500 bags of chemicals to its finished goods warehouse. Beginning work in process for this department was 25,000 pounds, 40 percent complete with the following costs: transferred-in cost, $132,500; conversion cost, $15,000. Bags are used at the end of the process and cost $1.50 each. During bagging, normally one out of every 11 bags is torn and must be discarded. No powder is lost (the tearing occurs when the bag is being attached to a funnel). Conversion costs for the month's production are $172,500. There is no ending work in process. Required: 1. Using FIFO, calculate the cost per bag of chemicals transferred to the finished goods warehouse. Round per-unit costs to the nearest cent. Round all other answers to the nearest unit or dollar, if required. Baking Department (to obtain the cost of goods transferred out): Units to account for: Beginning work in process fill in the blank ed6055ffd07c073_1 10,000 Units started fill in the blank ed6055ffd07c073_2 100,000 Total units to account for fill in the blank ed6055ffd07c073_3 110,000 Units accounted for: Units transferred out fill in the blank ed6055ffd07c073_4 Normal spoilage fill in the blank ed6055ffd07c073_5 Abnormal spoilage fill in the blank ed6055ffd07c073_6 Total units accounted for fill in the blank ed6055ffd07c073_7 Equivalent Units Conversion Costs Transferred In Total equivalent units fill in the blank ed6055ffd07c073_8 fill in the blank ed6055ffd07c073_9 Total unit cost $fill in the blank ed6055ffd07c073_10 Cost of units transferred out: Started and competed $fill in the blank ed6055ffd07c073_11 Prior period costs $fill in the blank ed6055ffd07c073_12 Costs to finish fill in the blank ed6055ffd07c073_13 fill in the blank ed6055ffd07c073_14 Normal spoilage fill in the blank ed6055ffd07c073_15 Total $fill in the blank ed6055ffd07c073_16 Grinding Department: Total units accounted for fill in the blank ed6055ffd07c073_17 Note: (For direct materials: 11 bags are used to get 10 good bags). Unit cost of units started and completed: Direct Materials Conversion Costs Transferred In Total Costs added $fill in the blank ed6055ffd07c073_18 $fill in the blank ed6055ffd07c073_19 $fill in the blank ed6055ffd07c073_20 Total equivalent units fill in the blank ed6055ffd07c073_21 fill in the blank ed6055ffd07c073_22 fill in the blank ed6055ffd07c073_23 Cost per equivalent unit $fill in the blank ed6055ffd07c073_24 $fill in the blank ed6055ffd07c073_25 $fill in the blank ed6055ffd07c073_26 $fill in the blank ed6055ffd07c073_27 Unit cost of units from beginning work in process: Prior period costs $fill in the blank ed6055ffd07c073_28 Costs to finish: Direct materials fill in the blank ed6055ffd07c073_29 Conversion costs fill in the blank ed6055ffd07c073_30 Total $fill in the blank ed6055ffd07c073_31 Unit cost $fill in the blank ed6055ffd07c073_32 per unit

The following data pertain to Babor Company for the fiscal year ended December 31:

Sales in the current year were $668,000.

Required:

Prepare a schedule of cost of goods manufactured and an income statement for the current year for Babor Company.

Complete this question by entering your answers in the tabs below.

• Stmt of COGM
• Income Statement

Prepare a schedule of cost of goods manufactured for the current year for Babor Company.

Strums Ltd manufactures 2 types of guitars to the extent of 1000 units of each per month. These require Direct material and Direct labour as under:

Overheads for a month amount to Rs. 1 crore which are usually allocated on the basis of direct labour cost consumed by each product. The manager feels that the current cost structure does not reflect the true cost absorbed by the products. He has collected further activity-wise information regarding the overheads which is tabulated as under:

Find out the total cost of each unit of Soul and Heal as per the existing method of costing as well as per Activity Based Costing.

Question (June 2015)

Zack Company developed the following information for its product:

Required:

(a) Calculate variable cost per unit and total fixed expenses.

(b) Calculate the operating profit for Zack Company using contribution margin income statement.

(c) Calculate the breakeven unit and check your answer by preparing a contribution margin income statement based on the breakeven units.

(d) How much sales must be generated for the company to earn a profit of RM300,000 ?

(e) If the company plans to hire sales promoter and pay a commission of RM5 for every unit sold, how many additional units must be sold to earn the same operating income it is now making? Check your answer by preparing a conteibution margin income statementbased on the new quantity. ,

Manila Company manufactures ceramic vases . To complete a vase, Manila requires the following input: Direct material standard 5 pounds at $1.50 pound Direct labor standard 0.5 hours at $6.40 per hour Budgeted fixed cost per quarter is $33,000 . Budgeted selling price $32.10 . During the year of 2019 the company budgeted to produce and sell $2,200 vases. Actual information for 2019 is provided below: Number of vases made and sold 2,090 Selling price $33.71 Direct materials used in production 10,032 pounds Direct labor used in production 993 hours Total cost of DM used $18,810 Total cost of direct labor $8,026 Fixed cost incurred $31,350

Requirements Assuming that direct labor and direct materials are the only variable costs in the company:

1 Prepare a static budget for 2019.

2 Prepare a flexible budget for 2019.

3 Compute direct material efficiency variance and direct material price variance, total direct material variance, and indicate whether each variance as favorable or unfavorable. Comment on findings.

Subscribing to the theory that life is indeed a beach, the residents of La Playa spend all of their money on three things: Every year, they collectively buy 250 bathing suits, 600 tubes of sunscreen, and 400 beach towels. Item (Amount purchased) Price 2013 ($) Price 2014 ($) Price 2015 ($) Price 2016 ($) Bathing suits (250) $10.00 $12.00 $15.00 $18.00 Sunscreen (600) 4.00 5.00 5.00 6.00 Beach towels (400) 5.00 5.50 7.00 9.00 Use the data in the table above to calculate the following. a. The total cost of this basket each year from 2013 through 2016. Instructions: Round your answers to the nearest whole number. Price 2013 ($) Price 2014 ($) Price 2015 ($) Price 2016 ($) Total cost of basket $ $ $ $ b. How much the cost of this basket has changed from year to year in percentage terms. Instructions: Round your answers to one decimal place. 2013−2014 2014−2015 2015−2016 Percentage change in total cost of basket % % %

  
Delph had no overapplied or underapplied manufacturing overhead during the year.

Ending Finished Goods Inventory Budget

Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs:

For the coming year, Play-Disc expects to make 300,000 plastic discs, and to sell 284,000 of them. Budgeted beginning inventory in units is 19,000 with unit cost of $4.85. (There are no beginning or ending inventories of work in process.)

Required:

1. Prepare an ending finished goods inventory budget for Play-Disc for the coming year. If required, round your answers to the nearest cent.

2. What if sales increased to 294,000 discs? How would that affect the ending finished goods inventory budget? Calculate the value of budgeted ending finished goods inventory.
Finished goods inventory has   to $