CAT lvl 2 Module 3 Answers-1

7/24/2019 CAT lvl 2 Module 3 Answers-1

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Exercise 1

A

B

Exercise 2

A

B

Exercise 3

A

B

Equivalent units are needed as a measure of production volume. At the end of thecosts must be spread over the units produced, and it is incorrect to combine fully cthose that are still in production (akin to adding apples and oranges). eparate totmaterials are often introduced at speci!c points in production whereas conversion iuniformly throughout manufacturing.

"o. #he units are still in production, so none of them are fully completed. $t wouldthe !rm has done the work equivalent to manufacturing %,&&& !nished units.

'peration costing is used by !rms that produce dierent models of similar productsthrough essentially the same manufacturing process, so conversion costs can be as

similar to that used in processcosting systems. *aterials, on the other hand, are ugoods being produced and, accordingly, the cost is assigned by batch (or in a mannin +ob costing).

A sweater manufacturer produces multiple versions of its single product sweaters.incur roughly the same labor and overhead cost, with the ma+or dierence amongareas of fabric, color, and patterns (i.e., materials). #hus, the material cost will oftemanufacturer should take these dierences into account, not spread costs equally oas would be done in a processcosttype of procedure.

#ransferredin costs are costs attached to units that are transferred from one procesne-t. *ore speci!cally, these are the manufacturing costs incurred in the sendingdirect materials, direct labor, and applied manufacturing overhead).

#he receiving department should view these units to be the equivalent of directpartially completed units), or units to be worked on and processed by the addition

material, direct labor, and manufacturing overhead.



eriod, manufacturingmpleted units withls are needed becauseoften introduced

e correct to say that

. #he products gosigned in a manner

nique to the individualer similar to that used

#he garments likelyodels being in the

n dier and thever all units produced

sing department to thedepartment (i.e.,

materials (namely,of (possibly still) more



req. / +ob orders

0&/ 0&0 0&1 0&2

direct materials 3&,&&&.&& 00,&&&.&& /4,3&&.&& 4,&&&.&&

direct labor 4&,&&&.&& 2&,&&&.&& 01,&&&.&& /1,&&&.&&

5' 6&,&&&.&& 10,&&&.&& /7,3&&.&& %,&&&.&&

total prodn cost /%&,&&&.&& %2,&&&.&& 3%,&&&.&& 1&,&&&.&&

unit cost /,%&&.&& /,366.67 0,16&.&&

!nished 8 sold 59 end wip end

/ direct materials work in process %4,3&&.&&

issued to prodn materials

0 direct labor work in process /36,&&&.&&

payroll

1 factory overhead work in process //4,3&&.&&

applied to factory overhead, applied

prodn

2 transfer to !nished goods inventory

!nished goods work in process

3 sales accounts receivable

sales

cost of sales

!nished goods inventory

req. 0



req. 1

direct materials %4,3&&.&&

direct labor /36,&&&.&&

factory overhead //4,3&&.&&

total manufacturing cost 171,&&&.&&add work in process, beg

cost of goods placed in process 171,&&&.&&

less work in process, end 1&,&&&.&& +ob 02

cost of goods manufactured 121,&&&.&& +ob 0&/, 0&0,

add !nished goods, beg.

cost of goods available for sale 121,&&&.&&

less !nishe goods inventory end 3%,&&&.&& +ob 01

cost of goods sold 042,&&&.&&



total

%4,3&&.&&

/36,&&&.&&

//4,3&&.&&

171,&&&.&&

%4,3&&.&&

/36,&&&.&&

//4,3&&.&&

121,&&&.&&

121,&&&.&&

13&,&&&.&&

13&,&&&.&&

042,&&&.&&

042,&&&.&&



&1



/ *aterial beg 62,&&&

purchases 42,&&&

available for use /24,&&& or

:aw *at, end (6&,&&&)

;irect 8 indirect mat used 44,&&&

direct materials used (74,&&&)

indirect materials used 10,000

0 accrued payroll, beg

labor incurred (squee<ed) 3&,&&&

total 3&,&&&

paid 22,&&&

accrued payroll, end 6,&&&

total labor 3&,&&&

less direct labor cost (10,&&&)

indirect labor cost 18,000

1 direct labor cost 10,&&&

- /03=

5', applied 2&,&&&

2 ;* used 74,&&&

;> cost 10,&&&

5actory overhead, applied 2&,&&&

total manufacturing cost /3&,&&&add ?$@, beg 40,&&&

less ?$@, end (%2,&&&)

cost of goods manufactured 138,000

3 cost of goods manufactured /14,&&&

add 59, beg 0%6,&&&

less 59, end (1&2,&&&)cost of sales, normal 130,000



materials

*aterial beg 62,&&& direct materials used 74,&&&

material purchases 42,&&& indirect materials used /&,&&& squee<ed

materials end 6&,&&&

indirect mat /,&&&

indirect labor /4,&&&

insuance 3&&

depn 12&&

utility 6&&&

04,%&&

5', applied 2&,&&&

5', control 04,%&&

variance, f //,/&&



5$5' ': ?A (same answer) department 1

actual direct material conversion cost

?$@, beg

started 6&,&&&

units to account for 6&,&&&

?$@, beg, 5 8 # , 5 8 # 2&,&&& /&&= 2&,&&& /&&= 2&,&&&

?$@, end 0&,&&& /&&= 0&,&&& 73= /3,&&&

6&,&&&

EUP 60,000 55,000

total direct materidirect labor overhead

cost, this month /,&1&,&&& 24&,&&& 11&,&&& 00&&&&

divide E@ 6&,&&& 33,&&& 33,&&&

total /4 4 6 2

, 5 8 # (2&,&&& units - /4) 70&,&&&

?$@, end (0&,&&& units)

;* (0&,&&& units - 4) /6&,&&&

;> (/3,&&& C 6) %&,&&&

DD (/3,&&& units - 2) 6&,&&& 1/&,&&&

total /,&1&,&&&

DEPARTMENT 2

actual # in ;*wip beg

received fr. ;/ 2&,&&&


:ecd, 5 8 # 1&,&&& /&&= 1&,&&&

?$@, end /&,&&& 3&= 3,&&&

2&,&&&

E@ 40,000 35,000

# in ;* ;>cost, this month /,06%,&&& 70&,&&& 023,&&& /%&&&&

divide by E@ 2&,&&& 13,&&& 14,&&&

unit cost 33 18 5

:ecd, 5 8 # (1&,&&& units - 11) !!0,000

?$@, end

#ransferred in (/&,&&& units - /4) /4&,&&&



;* (3,&&& units - 7) 13,&&&

;> (4,&&& C 3) 2&,&&&

'F (4,&&& units - 1) 02,&&& 2!,000

/,06%,&&&



wipd0 70&,&&&

wipd/ 70&,&&&

DD

/&&= 1&,&&&

4&= 4,&&&

38,000

'F//2,&&&

14,&&&

3

59 %%&,&&&

?$@ ;0 %%&,&&&



ECE:D$E 7 "E#$%TED A&ERA$E MET%'D

AD#A> ;*

?$@ BE9 1&,&&&

#A:#E; G 6&,&&&

%&,&&&

#:A"5E::E; '# (7&,&&&)

?$@ BE9 5 8 # 1&,&&& /&&= 1&,&&&

#A:#E; 5 8 # 2&,&&& /&&= 2&,&&&

?$@ E"; 0&,&&& /&&= 0&,&&&

"$# ADD'"#E; 5': %&,&&&

req. a EUP !0,000

#'#A> ;*

?$@ BE9 D'# 1%0,&&& /0&,&&&

D::E"# D'# %31,6&& 034,&&&

#'#A> /,123,6&& 174,&&&

;$H$;E; BI E@ %&,&&&

req. b "$# D'# 16(00 4(20

req. c #:A"5E::E; '# 7&,&&& C /6 /,/0&,&&&

?$@ E";

;* 0&,&&& C 2.0 42&&&

req. d ;> /0,&&& C //.4& /2/6&& 003,6&&

/,123,6&&



actual strawberry

# out %&,&&& /&&= %&,&&&

?$@, end /&,&&& /&&= /&,&&&

/&&,&&&

req. / EUP 100,000

total strawberry

current cost 21/,2&& /4&,&&&

divide by E@ /&&,&&&

req. 0 )nit c*st 4(50 1(80

req. 1 #out (%&,&&& - 2.3&)

?$@ end

trawberry ( /&,&&& - /.4&) /4,&&&

Dhocolate (& - /.3&)

req. d DD (7,&&& - /.0&) 4,2&&



chocolate DD

/&&= %&,&&& /&&= %&,&&&

&= 7&= 7,&&&

!0,000 !,000

chocolate DD

/13,&&& //6,2&&

%&,&&& %7,&&&

1(50 1(20

405,000

26,40021/,2&&



department 1wip beg

placed in process 6&,&&&


actual direct material conversi

#out 16,&&& /&&= 16,&&& /&&=

?$@, end G %,&&& /&&= %,&&& /J1

n*rma+ +*st )nits /3,&&& &= &=

units accounted for 6&,&&&

EUP 45,000

total ;* ;>

cost, this month 071,6&& /4&,&&& 74,&&&

divide E@ 23,&&& 1%,&&&c*st per e)p 6(40 4(00 2(00

T*)t 36,000 x 6(40 230,400

?$@, end

;* %&&& - 2 16,&&&

;> 1,&&& C 0 6,&&&

'F 1,&&& - .2& /,0&& 43,200

"ormal loss ( & -6.2&) &

total 071,6&&

DEPARTMENT 2

actual # in ;*

:ecd from ;/ 16,&&&

added %,&&&

23,&&&

completed 1%,&&& 1%,&&& /&&= 1%,&&&

?$@, end 6,&&& 6,&&& /&&= 6,&&&

23,&&&

E@ 45,000 45,000

total # in ;* ;>

cost, this month 24%,6&& 01&,2&& /13,&&& 404&&

divide by E@ 23,&&& 23,&&& 2/,2&&

unit cost 11(12 5(120 3(000 2(000

#out

1%,&&& - //.0& 433,680 59 ?$@;0

?$@ end



#in cost 6,&&& - 3./0 1&,70&

;* 6,&&& - 1 /4,&&&

;> 02&& - 0 2,4&&

'F 0,2&& - / 02&& 55,!20

24%,6&&



n cost

16,&&&

1,&&&

3!,000

'F

/3,6&&

1%,&&&0(40

?$@ ;0 01&,2&&

?$@;/ 01&,2&&

DD

/&&= 1%,&&&

2&= 0,2&&

41,400

'F

2/,2&&

2/,2&&

1(000

211,64& 211,64&



recKd from previous dept 33,&&&

added to prodn 3,&&&

6&,&&&

actual # in ;*

# out 24,&&& 24,&&&

?$@, end /0,&&& /0,&&&

6&,&&&

E@ 60,000 60,000

# in ;* DD

cost, this month 43,31& 02,73& 7,0&& 31,34&

divide by E@ 6&,&&& 6&,&&& 36,2&&

unit cost 1(4825 0(41250 0(1200 0(!500

#out 24,&&& - /.2403 1,160

?@ end

#in /0,&&& - .23 2,%3&

;* /0,&&& - ./0 /,22&

DD 4,2&& - .%3 7,%4& 14,30

43,31&



DD

24,&&&

4,2&&

56,400



#'

A-TUA. DM

/# ?$@ BE9 6,&&&

0"; #A:#E; 20,&&&

24,&&&

#:A"5E::E; '# (2&,&&&)

?$@ BE9 5 8 # 6,&&& 4&= 2,4&& 7&=

#A:#E; 5 8 # 12,&&& /&&= 12,&&& /&&=

?$@ E"; G 4,&&& /&= 4&& /3=

"$# ADD'"#E; 5': 24,&&&

EUP 3!,600

"E#$%TED A&ERA$E

A-TUA. DM

?$@ BE9 6,&&&

#A:#E; 20,&&&

24,&&&

#:A"5E::E; '#

?$@ BE9 5 8 # 6,&&& /&&= 6,&&& /&&=

#A:#E; 5 8 # 12,&&& /&&= 12,&&& /&&=

?$@ E"; G 4,&&& /&= 4&& /3="$# ADD'"#E; 5': 24,&&&

EUP 40,800



--

2,0&&

12,&&&

/,0&&

3!,400

--

6,&&&

12,&&&

/,0&&

41,200



actual ;

?$@ beg 5 8 # 1&& 2&=

5 8 # /,2&& /&&=

?$@, end 6&& 2&=

0,1&&

req. / E@

;*

wip beg. Dost 32&

current cost 3,%70 1,7/2

6,3/0

divide by E@ /,76&

req. 0 )nit c*st 3(415430 2(11022

#out (/,7&& units)

?$@ beg. 5 8 #

wip beg. cost. (16& L/4&) 32&

cost, this mo.

;* /0& - 0.//&007 031

DD 0/& - /.1&30& 072 307

c*st */ ip e(, T 1,06

T 1400 x 3(41543 4,82

req. 1 #otal cost of goods manufactured(transferred out cost)

?$@ end

;* 02& - 0.//&007 3&6

req. 2 cc /0& - /.1&30& /37



DD

/0& 7&= 0/&

/,2&& /&&= /,2&&

02& 0&= /0&

1,60 1,30

DD

0,034

/,71&

1(30520

wipd0 3,42%

wipd/ 3,42%

5,84!

6636,3/0



?E$9F#E; AHE:A9E *E#F';

AD#A> ;*

?$@ beg /3,&&&.&&

units started 03&,&&&.&&

063,&&&.&&

?$@ beg. /3,&&&.&& /&&= /3,&&&

tarted 01&,&&&.&& /&&= 01&,&&&

?$@, end 0&,&&&.&& /&&= 0&,&&&

req. / 063,&&&.&& 265,000

#'#A> ;*

?$@ beg. Dost 07&,&&&.&& 0/&,&&&

cost this month 2,%34,&&&.&& 1,3&&,&&&

3,004,&&&.&& 1,7/&,&&&

divided by E@ 063,&&&

req. 0 cost per E@ 20(00 14

req. 1 transferred out (023,&&& - 0&) 4,!00,000

;* (0&,&&& C /2) 04&,&&&.&&

req. 2 DD (4,&&& C 6) 24,&&&.&& 328,000

3,004,&&&

#ransferred out (023,&&&)



5$5'

DD AD#A>

?$@ beg /3,&&&.&&

units started 03&,&&&.&&

063,&&&.&&

/&&= /3,&&& ?$@ beg. /3,&&&.&&

/&&= 01&,&&& tarted 01&,&&&.&&

2&= 4,&&& ?$@, end 0&,&&&.&&

253,000 req. / EUP 063,&&&.&&

DD total

6&,&&& ?$@ beg. Dost 07&,&&&.&&

/,234,&&& cost this month 2,%34,&&&.&&

/,3/4,&&& 3,004,&&&.&&

031,&&& divided by E@

6 req. 0 c*st per EUP 20

cost of ?$@ beg. 5 8 #

?$@ beg. Dost

current cost

;* & - /2

;> 3,&&& - 6 1&,&&&cost of ?$@ beg. 5 8 #

cost of :ecKd 5 8 # (01&,&&& - 0&)

req. 1 T'TA. c*st */ **ds c*mp+eted

cost of ?$@ end

;* (0&,&&& - /2) 04&,&&&

req. 2 ;> (4,&&& - 6) 24,&&&

#ransferred out (023,&&&)



;* DD

&= /J1 3,&&&

/&&= 01&,&&& /&&= 01&,&&&

/&&= 0&,&&& 2&= 4,&&&

250,000 243,000

;* DD

1,3&&,&&& /,234,&&&

03&,&&& 021,&&&

14 6

07&,&&&

1&,&&&1&&,&&&

2,6&&,&&&

4,!00,000

328,000(00

3,004,&&&



"E#$%TED A&ERA$E

AD#A> ;*

?$@ beg /,&&&

@laced in process %,&&&

/&,&&&

#out (4,&&&u)

?$@ beg. 5 8 # /,&&& /&&= /,&&& /&&=

@in @ 5 8 # 7,&&& /&&= 7,&&& /&&=

?$@ end /,3&& /&&= /,3&& 73=

an*rma+ +*ss 500 1007 500 1007

E@ /&,&&& 10,000

#'#A> ;* ;>

?$@ beg. Dost 6,46& 0,30& /,32&

current cost /17,2%& 70,24& 0/,36&

/22,13& 73,&&& 01,/&&

divided by E@ /&,&&& %,603

c*st per EUP 14(!00 (500 2(400

cost of Abnormal lost units (3&& units - /2.%) 7,23&

trans/erred *)t 8,000 x 14(!?$@ end

;* //,03&

;> 0,7&&

'F 1,73&

"#P end c*st

+*ss /r*m an*rma+ sp*i+aean*rma+ +*st )nits

#' AD#A> ;*

?$@ beg /,&&&

@laced in process %,&&&

/&,&&&

#out (4,&&&u)

"#P e( T 1,000 407 400 657

@in @ 5 8 # 7,&&& /&&= 7,&&& /&&=

?$@ end /,3&& /&&= /,3&& 73=

abnormal loss 3&& /&&= 3&& /&&=E@ /&,&&& !,400



#'#A> ;* ;>

?$@ beg. Dost 6,46&

current cost /17,2%& 70,24& 0/,36&

/22,13& 70,24& 0/,36&

divided by E@ %,2&& %,073

c*st per EUP 14(862! (1064 2(32453

?$@ beg. 5 8 # (/,&&& u)

wip beg. Dost 6,46&

current costs

;* 1,&42

;> /,3//

5' 1,60/ 4,0/6

?$@ BE9 5 8 # cost /3,&76

tarted 5 8 # (7,&&& - /2.460%) /&2,&2/

transferred out cost (4,&&& units) 11!,11

wip end

;* //,366

;> 0,6/3

5' 1,60/ 1,802

abnormal loss (3&& - /2.460%) loss fr. A ,431

/22,13&

$5 "':*A> @'$>A9E 3&&"$#

?$@ beg. 5 8 # (/,&&& u)

wip beg. Dost 6,46&

current costs

;* 1,&42

;> /,3//

5' 1,60/ 4,0/6

?$@ BE9 5 8 # cost /3,&76

tarted 5 8 # (7,&&& - /2.460%) /&2,&2/

"':*A> @'$>A9E 7,21/transferred out cost (4,&&& units) 126,548

wip end

;* //,366

;> 0,6/3

5' 1,60/ 1,802

/22,13&



> 'F

/,&&& /&&= /,&&&

7,&&& /&&= 7,&&&

/,/03 3&= 73&

500 1007 500

!,625 !,250

5'

0,4&&

21,23&

26,03&

%,03&

5(000

charged to loss from abnormal spoilage

11!,200 wipd0 //%,0&&loss fr. As 7,23&

wipd/ /06,63&

1,00

,450

/22,13&

> 'F

650 57 50

7,&&& /&&= 7,&&&

/,/03 3&= 73&

3&& /&&= 3&&!,25 !,000



5'

21,23&

21,23&

%,&&&

4(828



req. / *H M ND allocated

split o

A 20&,&&& 36.&&= 030,&&&

B 07&,&&& 16.&&= /60,&&&

D 6&,&&& 4.&&= 16,&&&

73&,&&& 23&,&&&

req. 0

units ave. cost ND allocated

A 3&,&&& 2.3& 003,&&&

B 2&,&&& 2.3& /4&,&&&

D /&,&&& 2.3& 23,&&&

/&&,&&& 23&,&&&

23&,&&&J/&&,&&& u



addKl cost total cost

44,&&& 340,000

1&,&&& 1!2,000

/0,&&& 48,000

/1&,&&& 580,000

addKl cost total cost

44,&&& 313,000

1&,&&& 210,000

/0,&&& 5,000

/1&,&&& 580,000

2.3&



!nal sales value 6.&&

further proc. Dost (0.&&)

*ktg 8 admin (/.&&)

operating pro!t (/.&&)

reversal costJmarket value per unit 0.&&

- units produced 0,&&&.&&

1 am*)nt a++*cated t* 4,000(00

2 market value at split o ratio

C (0&3) - 4&&& /0&,&&&.&& 2&=

I (037) - /&&&& /4&,&&&.&& 6&=

1&&,&&&.&&



9*int c*st a++*cated

80,000(00

120,000(00

200,000(00



E /7

@rocess / material 6,06&

@rocess / processing cost 2,&&&

#'#A> N'$"# D'# /&,06&

less byproduct revenue (south)

sales 0&&

less selling 8 adm. 0& /4&

+oint cost to be allocated to East 8 ?est /&,&4&

0 :E>A#$HE A>E HA>E A# @>$# '55 :A#$'

EA# (1,&&& C 7) 1,&&& /4,&&&.&& 62.0%=

?E# 0,&&& C 3 /&,&&&.&& 13.7/=

04,&&&.&&

EAT "ET

/ A>E /7,3&& 4,3&&

D'# '5 A>E

hare in +oint cost 6,24& 1,6&&

subsequent cost 1,&&& &

total manufacturing cost (1,&&& O 0,&& %,24& 1,6&&

less ending inventory /,34& 32&

cost of sales 7,%&& 1,&6&

9:' @:'5$# %,6&& 3,22&

less operating e-pense 1,3&& /,7&&

net inc*me 6,100 3,40



:- a++*catedaddKl proc total cost unit cost inventory end sales

6,480 1&&& %,24& 1./6 /,34& /73&&

3,600 & 1,6&& /.4& 32& 43&&

10,080 /1,&4& 0,/0&

T'TA.

06,&&&

/&,&4&

1,&&&

/1,&4&

0,/0&

/&,%6&

/3,&2&

3,0&&

!,840

CAT lvl 2 Module 3 Answers-1

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Transcript of CAT lvl 2 Module 3 Answers-1