week 2 SUFE Process Costing week 2 Feb 2012

5 m units wip 31st january 8 m units 25 completed

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Unformatted text preview: y : 8 M units 25% completed Costs: WIP 1st January: $ 0.15 M materials, direct Labor $ 0.65M Costs incurred during the month: Materials $ 0.25 M, direct Labor $ 1.25 M, Factory Overhead is applied based on 150% of direct labor costs Make a process cost sheet for January 2008 based on LIFO MA Ltd. • • • MA Ltd. Produces Management Accounting books in a 2 step production process: In February 2005 the opening stock was: 1600 books representing a value/costs of $ 12,600 The degree of completion of these books: – – – • • • • • Process 1 materials 100% Added materials 40% Conversion costs 30% During February 6000 books were transferred from process 1 to process 2 at a value of $ 36,200 Added materials costs were $ 19,000 and conversion costs were $ 24,000 The closing stock on 28 February amounted 2000 books which were 100% completed with respect to process 1 materials, 60% with respect to added materials and 40% with respect to conversion costs MA Ltd. Uses FIFO for the valuation of stocks and output Give the WIP account for Process 2 for the month of February 2005. Fill in the easy parts FIFO MA Ltd. Total Units Total $ Process Process 1 Units Process Process 1 $ Materials Units Materials $ Conversi on units Conversion Conversion $ WIP Start 1600 $ 12,600 1600 - 640 640 (40%) (40%) - 480 (30%) - Inputs 6000 $ 79,200 6000 $36,200 6160 $19,000 5920 $24,000 Total 7600 $ 91,800 7600 $ 36,200 6800 $ 19,000 6400 $ 24,000 Finished Finished Goods Goods 5600 $? 5600 $? 5600 $? 5600 $? WIP End 2000 $? 2000 $? 1200 (60%) $? 800 (40%) $? Total 7600 $ 91,800 7600 $ 36,200 6800 $ 19,000 6400 $ 24,000 Cost/unit FIFO Process 2 Cost Sheet (matrix) FIFO MA Ltd. Total Units Total $ Process 1 Units Process 1 $ Materials Units Materials $ Conversio n units Conversion Conversion $ WIP Start 1600 $ 12,600 1600 - 640 (40%) - 480 (30%) - Inputs 6000 $ 79,200 6000 $36,200 6160 $19,000 5920 $24,000 Total 7600 $ 91,800 7600 $ 36,200 6800 $ 19,000 6400 $ 24,000 Cost/unit FIFO $ 6.0333 $ 3.0844 $ 4.0541 Finished Finished Goods Goods 5600 $ 19,011 5600 $ 24,133 5600 $ 15,299 5600 $ 20,757 WIP End 2000 $ 72,789 2000 $ 12,067 12,067 1200 $ 3,701 3,701 800 $3,243 Total 7600 $ 91,800 7600 (2000*$6.03 (2000*$6.03 33) $ 36,200 6800 (1200*$3.08 (1200*$3.08 44) $ 19,000 (800*$ 4.0541) 6400 $ 24,000 Number of completed books • • • • WIP at start: 1600 books Units commenced: 6000 books WIP at end : 2000 books Completed: 5600 books Equivalent units MA Ltd. Transferred Materials in from Added process 1 Conversion Completed units 5600 5600 5600 Closing WIP 2000 1200 (60%) 800 (4...
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