X Associates undertake to prepare income tax returns for individuals for a fee. They use the weighted average method and actual costs for the financial reporting purposes. However, for internal reporting, they use a standard costs system. The standards, based on equivalent performance, have been established as follows : Labour per return 5 hrs @ $ 40 per hour Overhead per return 5 hrs @ $ 20 per hour For March 2018 performance, budgeted overhead is $ 98,000 for standard labour hours allowed. The following additional information pertains to the months of March 2018: Return-in-process (25% complete) 200 No. Return started in March March 1 March 31 825 Nos. Mar-31 Return-in-process (80% complete) 125 Nos. Cost Data: Mar-01 Return-in-process labour |- Overheads March 1 to 31 Labour : 4,000 hours |Overheads $12000 $5000 $1,78,000 |$90000 You are required to compute: (a) For each element, equivalent units of performance and the actual cost per equivalent unit. (b) Actual cost of return-in-process on March 31.

X Associates undertake to prepare income tax returns for individuals for a fee. They use the weighted average method and actual costs for the financial reporting purposes. However, for internal reporting, they use a standard costs system. The standards, based on equivalent performance, have been established as follows : Labour per return 5 hrs @ $ 40 per hour Overhead per return 5 hrs @ $ 20 per hour For March 2018 performance, budgeted overhead is $ 98,000 for standard labour hours allowed. The following additional information pertains to the months of March 2018: Return-in-process (25% complete) 200 No. Return started in March March 1 March 31 825 Nos. Mar-31 Return-in-process (80% complete) 125 Nos. Cost Data: Mar-01 Return-in-process labour |- Overheads March 1 to 31 Labour : 4,000 hours |Overheads $12000 $5000 $1,78,000 |$90000 You are required to compute: (a) For each element, equivalent units of performance and the actual cost per equivalent unit. (b) Actual cost of return-in-process on March 31.

Name: X Associates undertake to prepare income tax returns for individuals
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Description: X Associates undertake to prepare income tax returns for individuals for a fee. They use the weightedaverage method and actual costs for the financial reporting purposes. However, for internal reporting,they use a standard costs system. The standard

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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