Cost Management Chapter 3 Problems -Fifth Edition

8/10/2019 Cost Management Chapter 3 Problems -Fifth Edition

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roblems

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Problem 3.1

Unit Reconc i l iat ion

Units in beginning WIP (100% Material, 60% conversion) 11000Units Started 105000Unit to Account For 116000Units Completed 110900

Units in Ending WIP (70% conversion) 5100Units accounted For 116000

Material Labor OverheadBegining WIP $4,000.00 $200.00 $300.00

Cost Incurred during May $76,500.00 $8,880.00 $9,915.00

Total Cost $80,500.00 $9,080.00 $10,215.00

Units Material Labor OverheadUnits Completed 110900 110900 110900

Equivalent Units,ending WIP 5100 3570 3570

Total 116000 114470 114470

Costs per Equivalent Units(Total Costs/Total units) $0.69 $0.08 $0.09

Cost Reconcilliation Total

Total Costs to account for $99,795.00Cost of completed units $95,654.02Cost of ending WIP

Material $3,539.22Labour $283.18

Overhead $318.58 $4,140.98Total Costs accounted for $99,795.00


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Problem 3.2

Unit Reconc i l iat ion

Units in beginning WIP (80% Material, 70% conversion) 600Units Started 2700Unit to Account For 3300

Units Completed 2600Units in Ending WIP (70% Material, 60% conversion) 700Units accounted For 3300

Material Labor CostsBegining WIP $45,000.00 $11,000.00Cost Incurred during August $269,080.00 $77,800.00

Total Cost $314,080.00 $88,800.00

Units

Units Completed 2600 2600Equivalent Units,ending WIP 490 420Total 3090 3020

Costs per Equivalent Units $101.64 $29.40

(Total Costs/Total units)

Cost Reconcilliation

Total Costs to account for 980,080.00Cost of completed units 837,651.92Cost of ending WIPMaterial 49,805.57Labour 12,349.67Overhead 80,272.85 142,428.08

Total Costs to account for 980,080.00


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Problem 3.3

Unit Reconci l iat ion

Units in beginning WIP (65% Material, 35% conversion) 5000Units Started 6000Unit to Account For 11000Units Completed 4000

Units in Ending WIP (75% Material, 50% conversion) 7000Units accounted For 11000

Material Labor OverheadCostsBegining WIP $170,000.00 $160,000.00 $50,000.00

Cost Incurred during october $422,000.00 $1,055,000.00 $107,500.00

Total Cost $592,000.00 $1,215,000.00 $157,500.00

UnitsUnits Completed 4000 4000 4000

Equivalent Units,ending WIP 5250 3500 3500

Total 9250 7500 7500

Costs per Equivalent Units $64.00 $162.00 $21.00(Total Costs/Total units)

Cost Reconcilliation

Total Costs to account for $1,964,500

Cost of completed units $988,000Cost of ending WIPMaterial $336,000Labour $567,000Overhead $73,500 $976,500

Total Costs to account for $1,964,500

Production Cost Report

Journal Entry: Not Required


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Total

$380,000.00$1,584,500.00

$1,964,500.00

$247.00


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Unit reconciliation

Cost per equivalent unit calculation

Material Labor Cost

Beginning WIP $6,000 $2,000

Cost incurred during April $26,500 $12,350

Total $32,500 $14,350

Units

Units Completed 33,000 33,000

Equivalent units, Ending WIP 8,000 4,000

Total 41,000 37,000

Cost per equivalent unit $0.79 $0.39

Total Cost per unit $1.64

Cost Reconciliation

Total cost to account for

Cost of completed units

Cost of Ending WIP

Material

Labor

Manufacturing Overhead

Total Cost account for

Production Cost Report

Aussie yearn company

August, xxxx

nits in beginning WIP (100% material, 70% conversion cost

Units account for

Units started in August

Units to account for

Units completed

Units ending in WIP (100% material, 50% conversion cost)


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Journal Entries are not required


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Journal Entries are ignored;

No of boxes 125,000

Cost of Box $ 0.90

Material Cost % 40Labor Cost % 15Manufacturing overheads % 45

Direct Material cost $ 45000Direct Labor cost $ 16875

Manufacturing overhead $ 50625

Cost of goods sold $ 112500


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7002,700

3,400

2,300

100% material, 70% conv. costs) 1,100

3,400

Material Labor Overhead Total$450 $1,200 $2,400 $4,050

4,125 11,610 23,830 39,565

$4,575 $12,810 $26,230 $43,615

2,300 2,300 2,3001,100 770 770

3,400 3,070 3,070

$1.35 $4.17 $8.54 $14.06

Problem P3-7 Production Cost Report, Missing Data

Classic 50s Flooring produces linoleum flooring. Below is a partial production cost report for the Mixing

Department. In the report, a unit is a gallon of linoleum cement (a mixture of linseed oil, pine resin, and woodflour).

Production Cost ReportMixing Department

June

Quantity ReconciliationUnits in beginning WIP

Units started

Units to account for

Units completed

Units in ending WIP (

Units accounted for

Cost Per Equivalent Unit Calculation

CostBeginning WIP

Cost incurred during June

Total

Required:

Fill in the missing data (items a through l).

Units

Units completed

Equivalent units, ending WIP

Total

Cost per equivalent unit


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512,000520,000

515,000


520,000

Material Labor Overhead Total$45,200 $10,500 $26,300 $82,000

890,800 711,900 1,335,940 $2,938,640

$936,000 $722,400 $1,362,240 $3,020,640

515,000 515,000 515,0005,000 1,000 1,000

520,000 516,000 516,000

$1.80 $1.40 $2.64 $5.84

$3,020,640$3,007,600

$9,000$1,400

$2,640 $13,040Total cost accounted for $3,020,640

Cost Reconciliation

Problem P3-8 Production Cost Report, Missing Information

Production Cost ReportMarion Chemicals

Dec-11

Unit Reconciliation

Units startedUnits to account for

Units in beginning WIP (

Units completed

Units in ending WIP (

Units accounted for

Required:

Fill in the missing data (items a through l).

UnitsUnits completed

Equivalent units, ending WIP

Total

Cost per equivalent unit

Material

Overhead

Labor

Total Cost to account forCost of completed itemsCost of ending WIP

Cost Per Equivalent Unit Calculation

Cost

Beginning WIP

Cost incurred in December

Total


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Chapter 3 : Prolem 3.9

Mixing Department

Unit at the beginning 15000

(100% M; 90% C)

Unit Started 660000

Total 675000

Unit completed 635000

Cl WIP (100% M; 70% C) 40000

675000

Material Labour OH

Op WIP 8500 1200 2500Cost incurred during the month 254750 78360 130700

Total 263250 79560 133200

Unit Completed 635000 635000 635000

EU of WIP 40000 28000 28000

Total 675000 663000 663000

Cost per EU 0.3900 0.1200 0.2009

Value of Cl WIP in Mixing Dept

Material 15600

Labour 3360

OH 5625

Cl WIP in mixing Dept 24585

Trasferred out Cost 451425

Total 476010


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Packing Department


( 60%M; 50% C)

Unit Started 635000

Total 649500


Cl WIP (80%M; 60% C) 38000

Total 649500

Total Direct Material

12200 Beginning WIP 925463810 Cost incurred during March 88941

476010 Total 89866

Units Completed 611500

Cl WIP - EU 30400

Total 641900

0.7109 Cost per EU 0.1400

Value of Cl WIP of Packing Dept

Direct Material 4256

Trf-in cost 24645

Labour 456

OH 684

Closing WIP of Shaping Dept 30041

Cost of Finished Goods 546770

Total 576811

Summary

Closing WIP in Mixing Dept 24585.34

Closing WIP of Shaping Dept 30041.07


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Cost of Finished Goods 546769.59

Total 601396.00

Cost per unit of Shampoo 0.8941


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Tranf-in Labour OH Total

3805.00 60.00 115.00 4905.00451425 12626 18914 571906

455230 12686 19029 576811

611500 611500 611500

35000 22800 22800

646500 634300 634300

0.7041 0.0200 0.0300 0.8941


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Mixing Department


(100% M; 70% C)

Unit Started 45000

Total 50000


Cl WIP (100% M; 50% C) 3000

50000

Material Labour OH

Op WIP 4000 1600 1900Cost incurred during the month 45440 23310 25830

Total 49440 24910 27730

Unit Completed 47000 47000 47000

EU of WIP 3000 1500 1500

Total 50000 48500 48500

Cost per EU 0.9888 0.5136 0.5718

Value of Cl WIP in Mixing Dept

Material 2966

Labour 770

OH 858

Cl WIP in mixing Dept 4594

Trasferred out Cost 97486

Total 102080


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Shaping Department


( 80% C)

Unit Started 47000

Total 52000


Cl WIP (60% C) 1500

Total 52000

Total Tranf-in Labour

7500 Beginning WIP 4420 80094580 Cost incurred during March 97486 13584

102080 Total 101906 14384

Units Completed 50500 50500

Cl WIP - EU 1500 900

Total 52000 51400

2.0742 Cost per EU 1.9597 0.2798

Value of Cl WIP of Shaping Dept

Trf-in cost 2940

Labour 252

OH 174

Closing WIP of Shaping Dept 3365

Cost of Finished Goods 122844

Total 126210

Summary

Closing WIP in Mixing Dept 4594.44

Closing WIP of Shaping Dept 3365.14

Cost of Finished Goods 122844.42

Total 130804.00


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Cost per unit of Candy 2.4326


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OH Total

600 58209320 120390

9920 126210

50500

900

51400

0.1930 2.4326


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Tropical Sun Limited


Units in beginning WIP (80% material, 55% conversion) 7500Units Started 97000Unit to Account For 104500

Units Completed 92500Units in Ending WIP (65% Material, 20% conversion) 12000Units accounted For 104500


Material Conversion Cost Total

Cost

Beginning WIP 7000 8000 15000Cost incurred 106473 143632 250105Total Cost 113473 151632 265105

UnitsUnits Completed 92500 92500EQU, ending WIP 7800 2400Cost per equivalent unit 1.13 1.60 2.73

Cost Reconci l ia t ion

Total Cost to Account For 265105Cost of Completed Units 252446Cost of Ending WIP

Material 8824 Conversion Cost 3835

12659

265105


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Kia Corporation


Units in beginning WIP (85% conversion) 6000Units Started 33000Unit to Account For 39000

Units Completed 29500Units in Ending WIP (55% conversion) 9500Units accounted For 39000


Material Labor Overhead

Cost

Beginning WIP 260000Cost incurred 1535250 162500 455000Total Cost 1795250

UnitsUnits Completed 29500EQU, ending WIP 9500Cost per equivalent unit 46.03


Total Cost to Account For 2482750Cost of Completed Units 1941999Cost of Ending WIP

Material 437304 Conversion Cost 103447Total Cost 540751

2482750


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Conversion Cost Total

70000 330000617500 2770250687500 2482750

29500522519.80 65.83


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Hartwell Drug Company


Units in beginning WIP (40% Complete) 600Units Started 1000Unit to Account For 1600

Units Completed 1300Units in Ending WIP (80% Complete) 300Units accounted For 1600


Material Labor Overhead Conversion Cost

Cost

Beginning WIP 0 36000 6000 42000Cost incurred 0 102780 49000 151780Total Cost 0 138780 55000 193780

UnitsUnits Completed 1300 1300 1300 1300EQU, ending WIP 300 240 240 240Cost per equivalent unit 0.00 90.12 35.71 125.83


Total Cost to Account For 193780Cost of Completed Units 163580.52 This is also conversion cost ofCost of Ending WIP

Material 0.00 Labor 21628.05 Overhead 8571.43

193780.00


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Total

42000151780193780

125.83

nits completed in March


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Sassy Cotton Company


Units in beginning WIP (100% Material, 40% conversion) 8000Units Started 31000Unit to Account For 39000Units Completed 30500Units in Ending WIP (60% conversion) 8500Units accounted For 39000


Material Labor Overhead

Cost

Beginning WIP $7,500 $3,400 $2,200Cost incurred $33,060 $10,484 $17,024Total Cost $40,560 $13,884 $19,224

Units

Units Completed 30500 30500 30500

EQU, ending WIP 8500 5100 5100Cost per equivalent unit $1.04 $0.39 $0.54

Cost Reconci l iat ion

Total Cost to Account For $73,668.00Cost of Completed Units $60,085.00Cost of Ending WIP

Material $8,840.00 Labor $1,989.00

Overead $2,754.00$13,583.00

$73,668.00


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Total

$13,100$60,568$73,668

$1.97


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Lindy Glitter


Units in beginning WIP (100% Material, 70% conversion) 8000Units Started 83000Unit to Account For 91000Units Completed 89200Units in Ending WIP (80% conversion) 1800Units accounted For 91000


Material Labor Overhead Conversio

Cost

Beginning WIP $3,000.00 $300.00 $200.00Cost incurred $71,700.00 $7,764.00 $8,760.00Total Cost $74,700.00 $8,064.00 $8,960.00

Units

Units Completed 89200 89200 89200

EQU, ending WIP 1800 1440 1440Cost per equivalent unit $0.82 $0.09 $0.10

Cost Reconci l iat ion

Total Cost to Account For $91,724.00Cost of Completed Units $89,975.96Cost of Ending WIP

Material $1,477.58 Labor $128.11

Overead $142.35$1,748.04

$91,724.00


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Total

$3,500.00$88,224.00$91,724.00

$1.01


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Unit Information

work in process, May 1 (75% complete) 40000Units started during May 90000Total to account for 130000

Units completed 110000Units ending in WIP(45% complete) 20000Total Units Account for 130000

Cost Information

Direct Mat Coversion TotalWork in Process, May 1 43000 340300 383300Cost incurred during May 87000 733080 820080

Total 130000 1073380 1203380

UnitsUnits completed 110000 110000Equivalent Units ending WIP (45% complete) 20000 9000total 130000 119000Cost per Equivalent Unit 1.00 9.02 10.02

Cost Reconciliation

Total Cost accounted for 1203380

Cost of completed units 1102200Cost of Ending WIPMaterial 20000Conversion 81180Total 101180 101180

Total 1203380


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$1.75$262,500.00$144,375.00$65,625.00$52,500.00

$262,500.00

$0.35

Journal entries are ignored

Overhead Rate per unit

Cost of Goods Sold

Number of units producedPer unit costTotal CostDirect MaterialLabor CostManufacturing Overhead


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Chapter 3 : Prolem 3.18Total Per unit Old Production New Production

300,000 300,000 350,000$15,000 0.05 $15,000.00 $17,500.00$30,000 0.1 $30,000.00 $35,000.00

$105,000 $105,000.00 $105,000.00$150,000 $150,000.00 $157,500.00

$0.50 $0.45

Since the motivation for increasing the capacity is mainly to reduce the cost by shifting a part o

Equivalent cost per unit

Number of units ProducedDirect MaterialsDirect LaborManufacturing overheadTotal costs


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f overhead to next peirod, it is not a good idea.

Cost Management Chapter 3 Problems -Fifth Edition

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