Question

JJU ASSighment #3 Saved View Help Open in Desktop App I U DAVAO DE E D Tell me what you want to do E ... Normal Question 2. (14 Marks) Yum Yum Meat Company uses a process costing system. The following information relates to one month's activity in the company's Curing Department: Conversion Percentage Complete Beginning work in process inventory Units started Units completed and transferred out Ending work in process inventory Units 10,000 21,000 26,000 5,000 The conversion cost of the beginning inventory was $6,500. During the month, $112.000 in additional conversion cost was incurred. Required: a) Assume that the company uses the FIFO method. Compute the following: 1. The equivalent units of production for conversion for the month. (2Marks) 2. The cost per equivalent unit for conversion for the month. (1 Mark) 3. The total cost transferred out during the month. (3 Marks) 4. The cost assigned to the ending work-in-process inventory. (2 Marks) b) Assume that the company uses the weighted-average cost method. Compute the following: 1. The equivalent units of production for conversion for the month. (Mark) 2. The cost per equivalent unit for conversion for the month (2 Marks) 3. The total cost transferred out during the month. (1 Mark) 4. The cost assigned to the ending work-in-process inventory (2 Marks)

Answer 1

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Yum-Yum
Answer a- FIFO method.
Cost of Production Report
				Note
Units	Physical Units	Equivalent Units
Units charged to production:
Beginning Inventory in process	10,000.00
Units started	21,000.00				Started and completed in the month
Total physical units accounted for	31,000.00				Transferred to Finished Goods	26,000.00
					Beginning Inventory in process	10,000.00
Units to be assigned costs:					Started and completed in Dec	16,000.00	I
Beginning Inventory in process	10,000.00	8,000.00		J= Units multiplied by % yet to be completed i.e. 100%-20%= 80%.
Started and completed in the month	16,000.00	16,000.00		See I
Transferred to Finished Goods	26,000.00	24,000.00		K= I+J
Ending Inventory in process	5,000.00	4,000.00		L= Units multiplied by % of completion
Equivalent units of production	31,000.00	28,000.00		M=K+L	This is answer 1.
Cost Information			Total
Costs per equivalent unit
Total costs for the month		112,000.00	112,000.00	N
Total equivalent units		28,000.00		See M
Costs per equivalent unit		4.00		N=N/M	This is answer 2.
Costs allocated to completed and partially completed units
Beginning Inventory in process			6,500.00	O
To complete Beginning Inventory in process		32,000.00	32,000.00	P= J*N
Started and completed in the month		64,000.00	64,000.00	Q=I*N
Transferred out in the month			102,500.00	R=O+P+Q	This is answer 3.
Ending Inventory in process		16,000.00	16,000.00	S=L*N	This is answer 4.

Answer b- Weighted Average Method.
Cost of Production Report
				Note
Units	Physical Units	Equivalent Units
Units charged to production:
Beginning Inventory in process	10,000.00
Units started	21,000.00
Total physical units accounted for	31,000.00
Units to be assigned costs:
Beginning Inventory in process	10,000.00	10,000.00		T
Started and completed in the month	16,000.00	16,000.00		See I
Transferred to Finished Goods	26,000.00	26,000.00		U= I+T
Ending Inventory in process	5,000.00	4,000.00		L= Units multiplied by % of completion
Equivalent units of production	31,000.00	30,000.00		V=U+L	This is answer 1.
Cost Information			Total
Costs per equivalent unit
Total costs for the month		118,500.00	118,500.00	W= $ 6,500+ 112,000.
Total equivalent units		30,000.00		See V
Costs per equivalent unit		3.95		X=W/V	This is answer 2.
Costs allocated to completed and partially completed units
To complete Beginning Inventory in process		39,500.00	39,500.00	Y=T*X
Started and completed in the month		63,200.00	63,200.00	Z=I*X
Transferred out in the month			102,700.00	AA=Y+Z	This is answer 3.
Ending Inventory in process		15,800.00	15,800.00	AB=L*X	This is answer 4.