I-Asgn3 - LESSON 3 Assignment Question 1 (14 marks)...

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LESSON 3 Assignment Question 1 (14 marks) Computer question Before you attempt this question, you should work through Computer illustration 3-1 in the Lesson Notes. Description Walton Company uses process costing. After three months of intensive effort, the company has converted its Midvale plant to a Flexible manufacturing system (FMS) layout and has installed necessary automated equipment in the various cells. As of the first of last month (March) the company also initiated a Just-in-time system on inventory control. In the past, Work in progress inventories have been a problem in that partially completed materials have accumulated in work areas and impeded the efficiency of operations. But during the last month, the company’s new JIT system, in conjunction with the FMS layout, has allowed the company to clear out its in-progress items and maintain a smooth flow of goods to meet current demand. Production data for March follow: Units Materials Conversion Work in progress, March 1 80,000 € 45,000 € 21,000 Started into production 530,000 Completed and transferred out 610,000 ? ? Work in progress, March 31 Cost added during the month 385,000 649,000 The March 1 Work in progress inventory was 75% complete as to materials and 25% complete as to conversion costs. The company uses the FIFO method to account for cost flows. Required a. (7 marks in total) Use the procedure described below to electronically prepare a production report for March. From this report, answer the following questions: (i) (4 marks) What was the total cost of one unit of production for the month of March? (ii) (3 marks) What was the total cost of goods transferred to finished goods inventory during the month of March? Management Accounting Fundamentals Assignment 3 1
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b. (7 marks in total) Use the procedure described below, and the additional data following, to electronically prepare a production report for April. During the following month (April), the company is able to increase its efficiency in the Midvale plant so that 630,000 units are started into production. Also, through JIT the company is able to keep Work in progress inventories from accumulating in the plant. The company incurs €378,000 in cost for materials and €567,000 in conversion cost for the month. From this report, answer the following questions: (i) (4 marks) What was the total cost of goods transferred to Finished goods inventory during the month of April? (ii) (3 marks) How (if at all) would the report you just prepared differ if the company used the weighted-average method to account for cost flows? Procedure 1. Open the file MA1L3Q1. 2. Examine the layout of the worksheet. 3. Display rows 19 to 29, and observe that the formulas in the quantity schedule have been pre-entered to save you time. 4.
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I-Asgn3 - LESSON 3 Assignment Question 1 (14 marks)...

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