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The Corp. Reach adds the materials at the beginning of their production process and the conversion...

The Corp. Reach adds the materials at the beginning of their production process and the conversion costs add them evenly. At the beginning of June 20XX the inventory in process had 25% termination; At the end of the month I had 70% termination. Further important data are reported below:

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Required:

  1. Prepares the cost report for the month of June 20xx.

Part III-Question (Value: 6points)

  1. Compares and contrasts accounting according to both methods (establishes two similarities and two differences).
  2. It establishes in which cost systems it is more practical to make a cost-benefit analysis and which applies a cost-per-volume analysis (use the text book and the presentation of the 2como Base module to answer).
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Answer #1

Answer to Q#1 (First question in the list Under FIFO method, equivalent units would consist efforts required to complete the beginning inventory, efforts put for completed and transferred out goods and ending inventory. As the materials are introduced at the beginning itself, beginning inventory is 100% complete in terms of materials, 0% efforts would be required in current process or period whereas conversion costs would require the uncompleted portion of costs in current process or period. So Units in beginning inventory 1,200 3,100 dd: Units added during the period Less: Units completed and transferred out($3,800)>1,200 units shall be from beg. inventory; Balance 2,600 units from current process. Units in ending inventory 500 Equivalent Units of Production (EUP) EUP Conversi on 300 EUP Materials Materials Conversion Particulars Whole Units Beginning work in process Started, Completed and transferred Transferred to Finished Goods Ending work in process Equivalent Units of Production (EUP) 1,200 2,600 3,800 500 4,300 0% 100% [1,200 units x 0%; 1,200 units x 25%) | [2,600 units x 100%; 2,600 units x 100%) 0 2,600 2,600 500 3,100 25% 100% | 2,600 2,900 350 3,250 100% T% [500 units x 100%; 500 units x 70%)Direct Cost per equivalent units of production Conversion Materials Cost of beginning work in process Cost added during the period Total Materials Costs & Conversion Costs Equivalent units of Production (EUP) Cost per Equivalent units of Production [Under FIFO method, it shall not be considered here] $280,000 $525 $280,000$525,000 3,100 $90.3226 $161.5385 [$280,000 / 3,100 units-$90.3226; $525,000 /3,250 units-$161.5385] 3,250 [As computed EUP schedule presented above] Cost per EUP Cost of goods completed & transferred EUP Totals Materials - Beginning cost Conversion Beginning Cost Cost of goods completed & trfd from beginning $115,000 [Given] $180,000 [Given] $295,000 2,600$90.3226 $234,839 [2,600 units x $90.3226] 2,900$161.5385 $468,462 [2,900 units x $161.5385] Materials - Current Cost Conversion - Current Cost Cost of goods completed & trfd from current Total Cost of goods completed & transferred $703,300 $998,300 [$295,000+$703,300]Cost per Cost of ending work-in-process Materials Conversion Total cost of ending work-in-process Totals EUP 500 350 $161.5385 $56,538 [350 units x $161.5385] EUP $90.3226$45,161 [500 units x $90.3226] $101,700 Production Cost Report Costs to account for: Beginning Work in Process Costs started this period $295,000[$115,000 $180,000] $805,000$280,000+$525,000] $1,100,000 Total Costs to account for Costs accounted for: Completed and transferred out Ending work in process $998,300 [As calculated] $101,700[As calculated] $1,100,000 Total Costs accounted for

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