Mangerial Accounting 2.4 Homework
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Florida Institute of Technology *
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Jan 9, 2024
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Sierra Henderson 2.4 Homework
1
Chapter #3
Exercise 13:
At the start of November, Penco Refinery had Work in Process Inventory consisting of 4,000 units that
were 90 percent complete with respect to materials and 50 percent complete with respect to conversion
costs. The cost of the units was $43,000 ($30,000 of material cost and $13,000 of labor and overhead).
During November, the company started 44,000 units and incurred $421,990 of material cost and
$394,880 of labor and overhead. The company completed 45,000 units during the month and, 3,000
units were in process at the end of November. The units in ending Work in Process were 85 percent
complete with respect to materials and 45 percent complete with respect to conversion costs.
a.
Calculate the cost per equivalent unit for materials and conversion costs.
Cost in beginning work in process
$25,000
Cost during the period
+
$421,970
$446,970
Conversion cost:
Cost in beginning work in process
$13,000
Cost during the period
+
$394,880
$407,880
Equivalent Units in ending work in process:
Material (4,000 units x .9) = 3,600
Conversion cost (4,000 x .5) = 2,000
Cost per equivalent unit of material:
$446,970 divided by (44,000 + 3,600) = $9.39
Cost per equivalent unit for conversion cost:
$407,880 divided by (44,000 + 2000) = $8.87
$9.39 + $8.87
= $ 18.26
b.
Calculate the cost of items completed during November.
45,000 units x $18.26
= $821,700
c.
Calculate the cost of ending Work in Process.
Material cost: (3,600 x $ 9.39)
= $33,804
Conversion cost: (2,000 x $ 8.87)
= $17,740
Total cost of ending work in process
: $ 51,544
d.
Round cost per equivalent unit calculations to the nearest cent and cost of work in process to
the nearest dollar.
Sierra Henderson 2.4 Homework
2
Exercise 14:
The Simon Fishing Company processes salmon for various distributors. The two departments involved
are Cleaning and Packing. The next table summarizes the data related to pounds of salmon processed in
the Cleaning Department during June:
Pounds of Salmon
Percent Complete *
Work in Process, June 1
40,000
50%
Started into processing during
June
500,000
-
Work in Process, June 30
30,000
75%
*Labor and overhead only
All materials are added at the beginning of the process in the Cleaning Department.
a.
Prepare a reconciliation of units and a computation of equivalent units for June for the Cleaning
Department.
Units
Percent Complete
Materials (100%) Conversion (75%)
Work in Process, beginning
of June,
40,000
Started into process during
June
+500,000
Total Units
=540,000
Work in Process, June 30
-30,000
Total Units Completed
=510,000
Material
Labor
Overhead
510,000
510,000
510,000
Work in Process, June 30
30,000
22,500
22,500
Total
540,000
532,000
532,000
Sierra Henderson 2.4 Homework
3
Problem 11:
Tropical Sun makes suntan lotion in two stages. The lotion is first blended in the Blending Department
and then bottled and packaged in the Bottling Department. Using the provided table and data, prepare a
production report for the Blending Department for May.
Prepare a production cost reports for Mixing and Shaping for the month of March. In your calculations,
round to two decimal places.
Unit Reconciliation
Units in beg. WIP (80% material, 55% conversion costs)
7,500
Units started during
+ 97
,000
Units to account for
104
,500
Units completed and transferred to bottling
92,500
Units in ending WIP (65% material, 20% conversion costs)
+ 12
,000
Units accounted for
104
,500
Cost per Equivalent Unit Calculation
Material
Conversion
Total
Cost
Beginning WIP
$
7,000
$
8,000
$
15,000
Cost incurred during March
+ 106
,473
+ 143
,632
+ 250
,105
Total
$113
,473
$151
,632
$265
,105
Units
Units completed and trans. out
92,500
92,500
Equivalent units,
ending WIP
+7
,800
+ 2
,400
Total
100
,300
94
,900
Cost per equivalent unit
$1.13
$1.60
$2.73
Cost Reconciliation
Total
$265
,105
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Sierra Henderson 2.4 Homework
4
Cost of units trans. out (92,500 units
$2.73)
$252,525
Cost of ending WIP
Material (7,800 equivalent units
$1.13)
$8,814
Conversion costs (2,400 equivalent units
$1.60)
3
,840
12
,654
Total
$265
,179