Israr Corporation uses the weighted-average method in its process costing system. During the month ending work in process inventory consists of 9,000 units. The ending work in process inventory is 100% complete with respect to materials and 70% complete with respect to labor and overhead. If the cost per equivalent unit for the period is Rs. 3.75 for material and Rs.1.25 for labor and overhead. What is the balance of the ending work in process inventory account?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
1) Israr Corporation uses the weighted-average method in its
What is the balance of the ending work in process inventory account?
2) Mehboob Inc. has provided the following data for the month of April. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
|
|
Work in Process |
Finished Goods |
Cost of Goods Sold |
Total |
|
Direct materials |
5,640 |
7,540 |
72,460 |
85,640 |
|
Direct labor |
5,430 |
13,780 |
80,220 |
99,430 |
|
Manufacturing overhead applied |
4,990 |
8,400 |
56,700 |
70,000 |
|
Total |
16,060 |
29,720 |
209,380 |
255,070 |
Manufacturing overhead for the month was overapplied by Rs. 6,000.
The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts.
The cost of goods sold for April after allocation of overapplied manufacturing is?
3) Munawar Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, Hanif Corporation incurred Rs. 150,000 in actual
4) Calculate Break-Even Point sales, when total sales, total variable costs and fixed costs are 300,000, 200,000 and 50,000 respectively.
5)
Compute the amount of raw materials used during August if Rs. 75,000 of raw materials were purchased during the month and the inventories were as follows:
|
Inventories |
Balance August 1 |
Balance August 31 |
|
Raw Materials |
5,000 |
3,000 |
|
Work in Process |
13,000 |
16,000 |
|
Finished Goods |
25,000 |
27,000 |
6) In March, one of the processing departments at ABC Corporation had starting work in process inventory of Rs.25,000 and ending work in process inventory of Rs. 34,000. During March, Rs.290,000 of costs were added to production and the cost of units transferred out from the department was Rs.281,000. In the department's cost reconciliation report for March, the total cost to be accounted for under the weighted-average method would be:
7) Jalal Corporation contribution margin ratio is 24% and its fixed monthly expenses are Rs. 64,000. If the company's sales for a month are Rs. 425,000, what is the best estimate of the company's variable expenses? Assume that the fixed monthly expenses do not change.
8)
ABC Corporation has provided the following data concerning manufacturing overhead for May:
Actual manufacturing overhead incurred Rs. 66,000
Manufacturing overhead applied to Work in Process Rs. 62,000
The Corporation's gross profit was Rs. 225,000 prior to closing out its Manufacturing Overhead account. The Corporation closes out its Manufacturing Overhead account to Cost of Goods Sold. What would be the gross profit after closing manufacturing overhead account:
9)
XYZ Enterprises Corporation's single product appear below:
|
Selling Price Per Unit |
Rs. 150 |
|
Variable Expense Per Unit |
90 |
|
Fixed Expenses for the month |
424,840 |
Total Variable Expenses in amount to attain the company's monthly target profit of Rs. 50,000 is closest to:
10)
Irfan Inc, instituted a new process in October, during which it started 10,000 units in Department H. Out of 10,000 units, 1,000 units, a normal number, were lost during the process: 7,000 were transferred to Department B: and 2,000 remained in work in process inventory at the end of the month, 100% complete as to materials and 50% complete as to conversion cost. Materials and conversion cost of Rs. 27,000 and Rs. 40,000, respectively, were charged to the department in October.
The cost of work in process inventory at the end of month:
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