Cost Accounting by Usry Chapter 6 Exercise 1
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Transcript of Cost Accounting by Usry Chapter 6 Exercise 1
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7/31/2019 Cost Accounting by Usry Chapter 6 Exercise 1
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MANAGERIAL AND COST ACCOUNTINGMATZ, USRY AND HAMMER9 th EDITION
CHAPTER 6 - COSTING BY-PRODUCTS AND JOINT PRODUCTSEXERCISE 1
REQUIRED
1) Accounts ReceivableIncome from sales of by product
( By product sold without incurring additional cost 80,000 poundsfor $ 0.36 per pound )
2) Finished goodsBy product
Work in process - Okay( By product transferred to finished goods and reducing the mainproduct cost by 80,000 pounds X $ 0.36 per pound )
3) Work in process By productPayrollApplied Factory overheadMaterial
( Further processing of By product accounting for material, labourand factory overhead after separation )
Finished goodsBy product
Work in process By product( By product transferred to finished goods after processing )
4) Work in process By productWork in process Okay (see working below)PayrollApplied Factory overheadMaterial
( Further processing of By product accounting for materail, labourand factory overhead and allocation of joint cost by the market value method )
Finished goods
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By productWork in process By product
( By product transferred to finished goods after processing )
WORKING FOR JOURNAL ENTRY 4Product Units
Okay 315,000By product 80,000
%age to allocate cost prior to separation = ($ 250,000+$200,000+$170,000) / $ 658,800
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Subsidiary Ledger General LedgerDebit / (Credit) Debit Credit
$ $ $
28,80028,800
28,80028800
28,800
20,0006,0004,000
10,000
20,00020,000
20,000
47,10427,104
6,0004,000
10,000
47,104
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47,104 47,104
Per unit market Total market Allocation of value at point of value at point of cost prior to
separation separation separation$ $ $
2.00 630,000 592,8960.36 28,800 27,104
658,800 620,000
$ 620,000 / $ 658,800 = 94.1105%