Accounting Problems
Sweetest Honey
b-20.03student_1.xlsProblem
| Zeus Corporation produces cultured diamonds via a secretive process that grows the diamonds in a vacuum chamber filled with a carbon gas cloud. The diamonds are produced in a single continuous process, and Zeus uses the weighted-average process costing method of accounting for production. The production process requires constant utilization of facilities and equipment, as well as direct labor by skilled technicians. As a result, direct labor and factory overhead are both deemed to be introduced uniformly throughout production. | ||||||||
| Zeus Corporation prepared the following "unit reconciliation" for the month of July: | ||||||||
| Unit Reconciliation: | ||||||||
| Quantity Schedule | ||||||||
| Beginning Work in Process | 5,000 | |||||||
| Started into Production | 6,000 | |||||||
| Total Units into Production | 11,000 | Equivalent Units Calculations: | ||||||
| Conversion | ||||||||
| Direct Materials | Direct Labor | Factory Overhead | ||||||
| To Finished Goods | 8,000 | 8,000 | 8,000 | 8,000 | ||||
| Ending Work in Process | 3,000 | 1,800 | 1,500 | 1,500 | ||||
| Total Units Reconciled | 11,000 | 9,800 | 9,500 | 9,500 | ||||
| Ending WIP Completion Status: Materials = 60% and Conversion = 50% | ||||||||
| The above beginning work in process inventory had an assigned cost of $3,000,000, divided between direct materials (30%), direct labor (20%), and factory overhead (50%). | ||||||||
| Additional costs incurred during July were $9,500,000, divided between direct materials (15%), direct labor (25%), and factory overhead (60%). | ||||||||
| Prepare a schedule showing the calculation of cost per equivalent unit. |
&L&"Arial,Bold"&20 &R&"Myriad Web Pro,Bold"&20B-20.03
B-20.03
Worksheet
| Cost Per Equivalent Unit: | ||||||
| Conversion | ||||||
| Total Cost | Direct Materials | Direct Labor | Factory Overhead | |||
| Beginning Work in Process | ||||||
| Cost incurred during period | ||||||
| Total cost | ||||||
| Equivalent units | ||||||
| Costs per equivalent unit |
&L&"Myriad Web Pro,Bold"&12Name:
Date: Section: &R&"Myriad Web Pro,Bold"&20B-20.03
B-20.03
