ABF's metal spare parts manufacturing company uses the customised production method by attributing the GST to the products it produces with the help of predetermined attribution coefficients. The processing of metal parts is carried out in two production departments: the Cutting and Drilling department, and the Assembly department. The GIS attribution coefficients for the two departments are based on the operating hours of machines and the cost of direct work respectively. At the beginning of the year, the following budgets were implemented: Cutting and Drilling Department Assembly Department Direct Labor Costs (in euros) 1.320.000 2.000.000 G.B.E. (in euros) 4.800.000 2.400.000 Machinery Operating Hours 80.000 5.000 Direct Work Hours 27.000 12.000 Requested: To calculate the coefficient of attribution of the General Secretariat that will be used in each department. (4 units) To determine the production cost per unit for order 158 which was sold for 2,500,000 euros, included 20,000 pieces and which was completed with the following characteristics. (8 units): Cutting and Drilling Department Assembly Department Consumed raw materials (in euro) 100.000 140.000 Direct Labor Costs (in euros) 300.000 70.000 Machinery Operating Hours 5.000 200 Direct Work Hours 400 700 The calendar entries from the update of the production account in progress concerning order 158 to the determination of the cost of sales. Consider that the initial inventory and purchases of inventory, revenues and all cost data related to the order have been recorded in the company's books. (10 units)

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 8E: A manufacturing company has two service and two production departments. Building Maintenance and...

See similar textbooks

Related questions

Question

ABF's metal spare parts manufacturing company uses the customised production method by attributing the GST to the products it produces with the help of predetermined attribution coefficients. The processing of metal parts is carried out in two production departments: the Cutting and Drilling department, and the Assembly department. The GIS attribution coefficients for the two departments are based on the operating hours of machines and the cost of direct work respectively.

At the beginning of the year, the following budgets were implemented:

	Cutting and Drilling Department	Assembly Department
Direct Labor Costs (in euros)	1.320.000	2.000.000
G.B.E. (in euros)	4.800.000	2.400.000
Machinery Operating Hours	80.000	5.000
Direct Work Hours	27.000	12.000

Requested:

To calculate the coefficient of attribution of the General Secretariat that will be used in each department. (4 units)
To determine the production cost per unit for order 158 which was sold for 2,500,000 euros, included 20,000 pieces and which was completed with the following characteristics. (8 units):

	Cutting and Drilling Department	Assembly Department
Consumed raw materials (in euro)	100.000	140.000
Direct Labor Costs (in euros)	300.000	70.000
Machinery Operating Hours	5.000	200
Direct Work Hours	400	700

The calendar entries from the update of the production account in progress concerning order 158 to the determination of the cost of sales. Consider that the initial inventory and purchases of inventory, revenues and all cost data related to the order have been recorded in the company's books. (10 units)

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here