Question

Problem 1 The Arlene Doll Co. uses a process costing system. Consider the following data for Dept. A. UNITS: W-1-P Nov. 1: 8,000 units. 100% completed for direct material 75% completed for conversion costs Started in November: 10,000 units Transferred to Dept B: 12,000 units W-1-P Nov. 30: 6,000 units, 100% completed for direct material 50% completed for conversion costs COSTS: W-1-P Nov. 1: Direct Materials $9,600 Conversion 4,800 Costs added in November: Direct Material $15,600 Conversion 14,400 Prepare a complete process costing schedule for Dept. A for November.

Answer 1

Direct Material Conversion Cost Units as on Nov. 30 6000 50% 3000 12000 6000 Stage of completion Equivalent units on Nov. 30 Transferred during the month 100% 6000 12000 8000 75% 6000 9000 Units as on Nov. 1 Stage of completion Equivalent units on Nov. 1 Total equivalent units processed during the month 8000 100% 8000 10000 Statement of Cost per unit Direct Material Conversion Cost 14400 9000 Costs incurred during the month of November Equivalents units processed during the month Cost per unit 15600 10000 1.56 1.6 Value of Closing Stock 6,000 units Direct Material @ 100% completed 9360 Conversion Costs @ 50% complete Value of Closing Stock 4800 14160

Process Account $ 14400 Transfer to Deptt. B 15600 Closing Balance 14400 $ 30240 Units Units Opening Stock 8000 12000 6000 14160 Material 10000 Conversion costs 44400 18000 18000 44400