C06F_Test_SOLUTION_Nov_2010

C06F_Test_SOLUTION_Nov_2010 - MGT C06F 2010-11 November 3...

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MGT C06F 2010-11 November 3, 2010 TEST SOLUTIONS QUESTION 1 A. LPV = ($10 -11) x 423,300 DLH = $423,300 UNF LEV Work Done this period Finish the BI, WIP: 20,000 x 60% = 12,000 eu Started & finished 80,000 – 35,000 = 45,000 units EI, WIP 35,000 units x 70% = 24,500 eu 81,500 eu x 5 std DLH Std DLH allowed = 407,500 LEV = (407,500 – 423,300) x $10 = $158,000 UNF MPV = ($4.00 – 4.05) X 171,000 Kg purchased = $8,550 UNF MEV Work done this period: WIP, BI = 0 Start & finish = 45,000 units WIP, EI = 35,000 units 80,000 units x 2 std kg Std Kg allowed = 160,000 kg MEV = (160,000 – 168,000) X $4 = $32,000 UNF B. Direct Labour variance proration LPV LEV Total EI, WIP 35,000 x 70% = 24,500 eu $127,250 $ 47,497 $174,747 COGS 65,000 – 8,000 eu in BI, WIP = 57,000 $296,050 $110,503 $406,553 81,500 C. Materials variance proration (simple solution, prorating MPV & MEV separately) MEV: EI, WIP 35,000 eu MEV to EI, WIP = 35/45 X $32,000 = $14,000 COGS 45,000 eu 80,000 (the COGS here only includes units started & finished this period, excluding BI, WIP of 20,000 units) 1
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MPV: EI, RM = 15,000 kg EI, WIP 35,000 units x 2 kg = 70,000 kg COGS (45,000 units x 2 kg) – 12,000 kg (BI, RM) = 78,000 kg 163,000 kg MPV to EI, WIP = 70 / 163 X $8,550 = $3,672 Alternate Solution Materials variance proration (prorating MPV to MEV first) MPV: EI, RM 15,000 kg MEV 8,000 kg MPV to MEV = 8/171 x $8,550 = $400 EI, WIP 70,000 kg MPV to EI, WIP = 70/171 x $8,550 = $3500 COGS 78,000 kg 171,000 kg MEV: EI, WIP 35,000 units MEV to EI, WIP = 35/80 x ($32,000 + $400) = $14,175 COGS 45,000 units 80,000 units 2
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QUESTION 2 A. i) Direct Method To Consumer To Industrial A/HR $600,000 40/75 $320,000 35/75 $280,000 IS $2,400,000 30/90 $800,000 60/90 $1,600,000 $ 1,120,000 $ 1,880,000 ii) Step-down (sequential) Method, closing A/HR first To Consumer To Industrial A/HR $600,000 40% $240,000 35% $210,000
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