Cost Accounting

Daniel LLC incurred the following cost in the month of October:

Material $55,000
Labor $46,000
Factory Overhead $23,000

There was no beginning inventory. Ending work in process was 10,000 units at 50 percent complete. 15,000 units were completed and transferred out.

Prepare a cost of production summary for the month, assuming Daniel uses the average cost method of process costing

Consider the following cost of production summary for Carrigan Products for May.

Carrigan Products Cost of Production Summary For the Month Ended May 31, 20--
Cost of work in process, beginning of month:
Materials	$ 8,200
Labor	5,500
Factory overhead	2,000	$15,700
Cost of production for month:
Materials	$24,000
Labor	17,600
Factory overhead	16,900	58,500
Total costs to be accounted for		$74,200
Unit output for month:
Finished and transferred to Finished goods
during month		2,000
Equivalent units of work in process, end of
month (1,000 units, 80% completed)		800
Total equivalent production		2,800
Unit cost for month:
Materials [($8,200 + $24,000) / 2,800]		$ 11.50
Labor [($5,500 + $17,600) / 2,800]		8.25
Factory overhead [($2,000 + $16,900) / 2,800]		6.75
Total		$ 26.50
Inventory costs:
Cost of goods finished and transferred to
Finished goods during month: (2,000 × $26.50)		$53,000
Cost of work in process, end of month:
Materials (1,000 × .8 × $11.50)	$ 9,200
Labor (1,000 × .8 × $8.25)	6,600
Factory overhead (1,000 × .8 × $6.75)	5,400	21,200
Total production costs accounted for		$74,200

a. Prepare the journal entries to record the production activity.
b. Prepare the Statement of Cost of Goods Manufactured for May.

Howard Corporation has two production departments. Curing has 12,000 units in process at the beginning of the period, 3 / 4 complete. During the period, 45,000 units were received from Crushing, 48,000 units were transferred to Finished Goods, and 9,000 units were in process at the end of the period, 2/ 3 complete. Cost information was as follows:

Cost of beginning Work in Process:
Cost in Crushing	$ 21,640

Cost in Curing:
Materials	8,810
Labor	1,190
Factory overhead	2,420

Costs during the month:
Cost of goods received from Crushing	$ 85,520

Cost in Curing:
Materials	53,830
Labor	10,690
Factory overhead	17,560
Total costs to be accounted for	$201,660

a.   Determine the unit cost for the month in Curing.
b.   Determine the total cost of the products transferred to Finished Goods.
c.   Determine the total cost of the ending Work in Process inventory.

Information for Chaucer, Ltd. in July for the Prep Department, the first stage of the production cycle, is as follows:

	Materials	Conversion Costs
Beginning work in process	$ 8,100	$ 6,200
Costs added during July	23,400	13,400
Total costs	$31,500	$19,600

Goods completed		60,000 units
Ending work in process		15,000 units

Material costs are added at the beginning of the process. The ending work in process is two-thirds complete as to conversion costs. How would the total costs accounted for be distributed using the average cost method?

Howard Poster Incorporated had 12,000 units of work in process in Department A on October 1. These units were 60 percent complete as to conversion costs. Materials are added in the beginning of the process. During the month of October, 38,000 units were started and 40,000 units were completed. Howard had 10,000 units of work in process on October 31. These units were 75 percent complete as to conversion costs.

1) Compute the equivalent units for materials and conversion costs for the month of October using the FIFO method.

2) Using the average cost method determine the equivalent units for materials and conversion costs for the month of October.

Jim Davis Company processes Pork into three products, chops, bacon and sausage. Production and selling price data follow:

Chops	100,000 lbs.	$5.00/ lb.
Bacon	210,000 lbs.	$4.00/ lb.
Sausage	410,000 lbs.	$2.00/ lb.

Pork are processed in the Processing Department.  From the split-off point, bacon is smoked, sliced and packaged in the Bacon Department.  The cost incurred for these processes was $100,000.  In addition, sausage was ground and formed into patties in the Sausage Department after the split-off.  This process cost $60,000.

Required:
a)  If joint processing costs were $1,500,000, calculate the total cost of each product using the adjusted sales value method.
b)  Prepare the journal entries to 1) record the joint processing and movement of product out of the Processing Department after the split off, and 2) record the additional processing and completion of the bacon and sausage

9 years ago

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