Course Hero Logo

Problem 5 jkl company buys article g for p080 per

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 8 - 10 out of 24 pages.

PROBLEM 5JKL Company buys Article G for P0.80 per unit. At the end of processing in Department 1, Article G split intoproducts D, E and F. Product D is sold at split-off point with no further processing. E and F require furtherprocessing before they can be sold. E is processed in Department 2 and F is processed in Department 3.The following is a summary of costs and other related data for the year ended July 30, 2014.Cost of Article G:Department 1Department 2Department 3Direct materialsP 1,440,000Direct labor210,000P 675,000P 975,000Factory overhead150,000315,000735,000Product DProduct EProduct FUnits sold300,000450,000675,000Units on hand at July 30, 2014150,000-225,000SalesP 450,000P 1,440,000P 2,126,2501.The cost of Product E sold for the year ended July 30, 2014a. P1,470,000b. P1,440,000c. P990,000d. P1,350,000
2.The cost of ending inventory for Product D
PROBLEM 6The ABC Chemical Company produces a product known as “minergy” from which by product results.This by-product can be sold at P10 per pound.The manufacturing costs of the main product and by-product up to the point of separation for the threemonths ended March 31, 2014 follows: Materials, P175,000; Labor, P100,000; Overhead, P100,000.The units processed were 35,000 pounds of the main product and 3,500 pounds of the by-product.During the period, 31,500 pounds of the “minergy” were sold at P48, while the company was able to sell2,625 pounds of the by-product.Selling and administrative expenses related to the main product amounted to P210,000.
Disposal cost per unit of the by-product is P2.Assume that the by-product is inventoried and recorded at NRV. The NRV of the by-product reduces themanufacturing costs of “minergy”. (1)What is the unit cost of “minergy”? (2) What is the cost of inventory ofminergy?
9ANSWERS to PROBLEMS:Problem 1: c, d, aProblem 2: bProblem 3: dProblem 4: bProblem 5: d, cProblem 6: bw/ disposal costNRV = [email protected][email protected]@ SOPNRV Methodw/o disposal costNRV = FSV – APC@ SOPHypothetical MV/Estimated/Approximated NRVCA 5104 – COST ACCOUNTING & CONTROLStandard Costing & Variance AnalysisStandardStandard is a measure of acceptable performance established by management as a guide in makingeconomic decisions.Standard CostStandard Cost is a scientifically predetermined cost of manufacturing a unit or a specific quantity ofproduct during a particular period of time. It is a measure of acceptable performance, established bymanagement as a guide to certain economic decisions. It is in short, a reflection of what a managementthinks a cost ought to be.Standard CostingStandard costing is the practice of substituting an expected cost for an actual cost in the accountingrecords. Subsequently, variances are recorded to show the difference between the expected andactual costs. This approach represents a simplified alternative to cost layering systems, such as theFIFO and LIFO methods, where large amounts of historical cost information must be maintained forinventory items held in stock.

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 24 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Spring
Professor
N/A
Tags
Cost Accounting, joint products

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture