Question

Tap Corp. is a pharma company based in London. It makes a drug in a single processing department. Direct materials are added at the start of the process. Conversion costs are added evenly during the process. Spoilage is detected upon inspection at the completion of the process. Spoiled units are disposed of at zero net disposal value. Tap uses the weighted average method of process costing. The following information for June 2010 is available. Equivalent Units Physical Direct Conversion Units Materials Costs Work in process, June 1 11,000" Started during June ? Completed and transferred out during June 41,000 Normal spoilage 100 Abnormal spoilage Work in process, June 31 12,8006 aDegree of completion direct materials, 100%; conversion costs, 30%. bDegree of completion: direct materials, 100%; conversion costs, 70%. Total Costs for June 2010 Work in process, beginning Direct materials $ 70,500 Conversion costs 42,500 $ 113,000 Direct materials added during June 351,000 Conversion costs added during June 428,000 Total costs to account for $892,000 100 Required: 1. Calculate the cost per equivalent unit for direct materials and conversion costs. (60 marks) 2. Summarize the total costs to account for, and assign them to units completed (and transferred out) and to units in ending work in process. (40 marks)

Answer 1

plocess account. units Амоинф реля 4fauloss ва | lunas Amount (3) (Гооб clooxo). Noenal loss (Noemval Sportage) ва самояила о » Cabomogucal spolage) 100 (660. (Baltig). 70S OO региоя У w срол Хуу юo9k Ти – роблеу. Couné -1) Directmaterial conversion wst no whit indeoduced during Jane. Бе4 чацезаg conversion cost 425 Оо, 4(обо 7,06,020. 42soo Свше 42 By completed and reausbesled out during June . 2.SI, ООО 12Коо 1, 4, 920 428ор О By tooge °л роса и тилQ 2) d 1007, s4p65 542,00 S4066 | 8,42,00 • (1) Rebe» Raqalелелi q statement of equivalent product carins) past?llergy is Matelieu cowestion cost pusticulares units Coutput) % cowp-Equivalent coneplove. Cawalent reded ubquit uwit Opedv9) Ftooo Мояшол 033, (оо SR) 100% м? (109 ко) working in Соок о). Abnormal loss 100, Process foo'r* Тоо, сдио - ) Соохү00) cioоkino) completedd 4000р. tool, 41006 (об'і. 4100р. wait indeodu 43000 seansfered (4 tooox700) Goooxoorr) ced. , 11&oo. 100, 12 воо. ПОy, process 446р. 428ООХtoo?) (цло – ) |a2gоох боу.) 100." -м - Гоор: S400р S 3400 So06. *10te% - since given in the quesipon thet spoilage is detected up on inspection at the completion of the process. oie, bol sporlage Dixech moterice used =100% convention cost used - 100%-

2) Stadement of cost. 'Dilectmaderial conversion cost particulars Cool K-PM- process beginning 70500 42500. Added during Jane 351000 428000. Jotel 421500 470500 Requliot - 1 cost per equivalent unit ost 421500 Crebeec). Direct made elal :53900 unies (Refel B) Equivalent using = 7082 pee cupit carvestion cost = 470500 (reflec) 500 60 hits (Refel B) 90.39 Paes unity 9.4 per unit Dilectmadelicet Required - 2 &- statement of appor fonment of cost units completed ca cost pee equivalent convert Pou cost unit Х (equivalent units per equivalent unit + = ( 41000 x 7.82)+(41000x9.4). 3,20,620 +3,85,400 7,06,020 coles in andling - (pequkseleht wins x ploce material cos Equivalent units equivalent unit (12800x7182) +(8960X9.4) work-in-process conversion cosa per ) X 100096 + 84224 184320 may Hem Due do sound oft answer ob nawe slight difference.