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Assignment Cost

The document contains exercises related to process costing and activity-based costing systems, including journal entries, equivalent units of production, and production cost reports. It provides calculations for direct material, direct labor, and manufacturing overhead costs, along with overhead rates and unit product costs for two products. The exercises illustrate the application of costing methods in a manufacturing context.

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ZAKARIYA
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10 views

Assignment Cost

The document contains exercises related to process costing and activity-based costing systems, including journal entries, equivalent units of production, and production cost reports. It provides calculations for direct material, direct labor, and manufacturing overhead costs, along with overhead rates and unit product costs for two products. The exercises illustrate the application of costing methods in a manufacturing context.

Uploaded by

ZAKARIYA
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Name: Zakariya Aden Mohamed

Exercises for process costing system

Exercise 1
Journal entries
Debit Credit
Raw materials 50,000
A/payable 50,000
WIP mixing.dept 20,000
WIP finishing.dept 14,000
Direct Material 34,000
Direct labor 80,000
Wages Payable 80,000
WIP mixing.dept 48,000
WIP finishing.dept 32,000
Direct labor 80,000
WIP mixing.dept 27,000
WIP finishing.dept 15,000
MOH 42,000
WIP finishing.dept 66,000
WIP mixing dept 66,000
Finished goods 60,000
WIP finishing dept 60,000
Cost of goods sold 30,000
Finished goods 30,000
A/receivable 45,000
Sells 45,000
Exercise 2:
A) Equivalent units of production.
Flow of production Physical Direct Conversion
units material cost
WIP May 1 0
Unit started during month 35,000
Units to be accounted for 35,000
Transferred and completed out 25,000 25,000 25,000
WIP May 31 10,000 10,000 4000
Unit accounted for equivalent unit 35,000 29,000

B)Unit production cost


Direct material: 70,000/35,000 = 2
Conversion Cost: 174000/29000 = 6

C)Production Cost report


Total Direct material Conversion
production cost cost
WIP May 1 0 0 0
Cost added during month 244,000 70,000 174000
Total cost to be accounted for 244,000 70,000 174,000
Divide by equivalent unit: /35000 /29000
Cost per equivalent unit: 2 6
Cost reconciliation for transferred 20,000 50,000 150,000
& completed
WIP May 31 44,000 20,000 24,000
Total cost accounted for 244,000 70,000 174,000
Exercise 3
Flow of production Physical unit Conversion cost
WIP May 1 12,000
Unit started during month 30,000
Unit accounted for 42,000
Unit completed and transferred 39,000 39,000
out
Ending WIP 3000 1,200
Equivalent unit 40,200

Exercise 4
Total cost Direct material Direct labor MOH
WIP May 1 156,270 14,550 23620 118,100
Cost added during month 174,330 88,350 14,330 71,650
Total cost accounted for 330,600 102,900 37,950 189,750
Divided by equivalent unit 1,200 1,100 1,100
Cost per equivalent unit 85.75 34.5 172.5
Total cost per equivalent unit 292.75
Exercise for ABC system

Activity cost pool Estimated overhead Expected Activity Activity rate


Labor related 46,000 4,000 DLHrs 11.5 per DLHRs
Machine related 43,400 14,000 MHRs 3.1 per MHRs
Machine setup 81,600 1,700 setups 48 per setp
Production order 26,000 1,300 orders 20 per order
Product testing 48,000 2000 tests 24 per test
Packaging 11,000 1,100 package 10 per package
General factory 108,800 3000 DLHRs 13.6 per DLHRs

POHR : 364,800/12,000 = 30.4

Question 2
Product Product B
A
Activity cost pool Activity rate Activity Amount Activity Amount
Labor related 7 per DLHs 1000 7000 40 280
Machine related 3 per MHRs 3,200 9,600 30 90
Machine setup 40 oer setup 5 200 1 40
Production order 160 per orders 5 800 1 160
Shipments 120 per shipment 10 1200 1 120
General Factory 4 General factory 1000 4000 40 160
Total overhead 22,800 850
Total units ÷4000 ÷100
produced
Overhead cost per 5.7 8.5
unit

Unit product cost:


Product A:
Direct material cost per unit = 6.5
Direct labor cost per unit = 3.75
MOH cost per unit = 5.7
Total = 15.95
Product B
Direct material cost per unit = 31
Direct labor cost per unit= 6
Overhead cost per unit = 8.5
Total = 45.5

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