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Part D: Process Costing using First-in-First Out (FIFO)
Crone Corporation uses the FIFO method in its processing costing system. The following data concern
the company's Assembly Department for the month of October.
Cost in beginning work in process inventory ........ $1,920
Units started and completed this month ................ 3,130
Materials Conversion
Cost per equivalent unit ......................................... $9.50 $20.40
Equivalent units required to complete the units in
beginning work in process inventory ................. 360 140
Equivalent units in ending work in process
inventory ............................................................ 330 264
Required:
Determine the cost of ending work in process inventory and the cost of units transferred out of
the department during October using the FIFO method.
Part E: Activity-Based Costing
Welk Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, H16Z and P25P, about which it has provided the following data:
H16Z
P25P
Direct materials per unit ................
$10.20
$50.50
Direct labor per unit ......................
$8.40
$25.20
Direct labor-hours per unit ............
0.40
1.20
Annual production .........................
30,000
10,000
The company’s estimated total manufacturing overhead for the year is $1,464,480 and the company’s estimated total direct labor-hours for the year is 24,000.
The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:
Activities and Activity Measures
Estimated Overhead Cost
Supporting direct labor (DLHs) .................
$ 552,000
Setting up machines (setups) .....................
132,480
Parts administration (part types) ................
780,000
Total ...........................................................
$1,464,480
H16Z
P25P
Total
Supporting direct labor ......
12,000
12,000
24,000
Setting up machines ...........
864
240
1,104
Parts administration ...........
600
960
1,560
Required:
a. Determine the manufacturing overhead cost per unit of each of the company's two products under the traditional costing system.
b. Determine the manufacturing overhead cost per unit of each of the company's two products under activity-based costing system.

Answer 1

Calculation $ $ Question D Particulars From the Beginning Work in Process Inventory : - Cost in Beginning Work in Process Inventory - Cost to Complete these Units : - Materials - Conversion Total Cost from Beginning Inventory 1,920 360 Equivalent Units @ $ 9.50 per Equivalent Unit $ 140 Equivalent Units @ $ 20.40 per Equivalent Unit $ $ 3,420 2,856 8,196 Units started and completed this Month 3,130 Units @ $29.90 per Unit $ 93,587 Total Cost transferred to Next Department $ 101,783 Work in Process, October 31 : - Materials - Conversion Total Work in Process, October 31 330 Equivalent Units @ $ 9.50 per Equivalent Unit $ 264 Equivalent Units @ $ 20.40 per Equivalent Unit $ $ 3,135 5,386 8,521

$ Question E (A) Total Manufacturing Overheads Total Labor Hours Predetermined Overhead Rate 1,464,480 24,000 61.02 Per Direct Labor Hour $ Particulars Labor Hours Overhead Rate $ Manufacturing Overheads $ No. of Units Manufacturing Overheads per Unit $ H16Z 12,000 61.02 $ 732,240 $ 30,000 24.41 $ P25P 12,000 61.02 732,240 10,000 73.22 Question E (B) Particulars Supporting Direct Labor Setting-Up Machines Parts Administration Total Manufacturing Overheads Overhead Cost $ 552,000 $ 132,480 $ 780,000 $ 1,464,480 Driver Qty. Activity Rate 24,000 $ 23 1,104 $ 120 1,560 $ 500 Particulars Supporting Direct Labor Setting-Up Machines Parts Administration Total Manufacturing Overheads No. of Units Manufacturing Overheads per Unit Activity Rate $ 23 $ $ 120 $ 500 $ $ $ H16Z 276,000 $ 103,680 $ 300,000 $ 679,680 $ 30,000 22.66 $ P25P 276,000 28,800 480,000 784,800 10,000 78.48 $ $