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Class 12 Accounting Questions asked by Filo students

Question 61

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Determine the equivalent units of production for materials and conversion costs.

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Accounting

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Question 62

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(a) Prepare a schedule showing physical units of production. Prepare a schedule showing physical units of production. Particulars Units Units to be accounted for: Work in process, June 1 0 Add: Started into production 22,000 Total units 22,000 Units accounted for: Units Completed and transferred out[equation(1)] 20,000 Work in process , June 30 2,000 Total units 22,000 Table (1) Process costing : The method of cost accounting which is used to determine cost of that product which passes through various processes. Physical Units: Units which can be seen and touched or which are tangible in nature are called as physical units. Compute the amount of units completed and transferred out Given, Beginning work in process is 0. Units started into production are 22,000 units. Ending work in process units is 2,000 units. The formula to compute amount of units completed and transferred out is: Units Completed and Transferred Out = ( Beginning Balance + Units Started − Ending Balance ) Substitute 0 for beginning balance 22,000 for units started and 2,000 for ending balance in above formula. Units Completed and Transferred Out = 0 units + 22 , 000 units − 2 , 000 units = 20 , 000 units (1) Therefore, total physical units are 22,000 units . (b) Calculate the equivalent units of production for materials and conversion costs. Equivalent units of production for materials and conversion costs are 22,000 and 20,800 units respectively. Equivalents units for production The activity of a processing department in terms of fully completed units is known as equivalent units. It includes the completed units of direct materials and conversion cost of beginning work in process, units completed and transferred out, and ending work in process. Compute the equivalent units in the ending work in process. Equivalent units in direct materials Direct materials are added at the beginning of the process; hence, the equivalent units of direct materials in the ending working process will be 2,000. Equivalent units in conversion cost Given, Conversion costs are 40% of completed. Ending work in process units are 2,000 units. Equivalent units of conversion cost of ending work in process is ( Equivalent Units of Conversion Cost of Ending Inventory ) = ( Number of Units Ending Work in Process × Percentage of Completion ) Substitute, 2,000 for number of units of ending work in process and 40% for percentage of completion in above formula. ( Equivalent Units of Conversion Cost of Ending Inventory ) = 2 , 000 units × 40 % = 800 units R company Production Cost Report Equivalents Units Particulars Direct Material Conversion Cost Completed and transferred out 20,000 20,000 Add: Ending work in process[refer working note] 2000 800 Total Equivalents Units 22,000 20,800 Table (2) Hence, equivalent units of production for materials and conversion costs are 22,000 and 20,800 units respectively. (c) Calculate the unit cost of production. The unit cost of production for materials and conversion costs are

9 an d

8 respectively. Cost per unit Total unit cost is the cost incurred by the company to produce one unit of product. The unit cost is calculated by dividing the units produced with the total cost. Prepare production cost report as follows to determine cost per equivalent unit. R company Production Cost Report (Partial) For the Month Ended June 30, 2017 Particulars Direct materials Conversion cost Total cost Cost

198, 000

364, 400 T o t a lC os t

166, 400

364,400 Equivalent units 22,000 units 20,800 units Cost per equivalent unit

198, 00022, 000 =

166, 40020, 800 =

17 T ab l e (3) W or kin g n o t e : C o m p u t e t h eco n v ers i o n cos tP a r t i c u l a rs A m o u n t (

) Labor cost 53,600 Add:Overhead cost 112,800 Total conversion cost 166,400 Table (4) Therefore unit cost of production is

17. (d) C a l c u l a t e t h ecos tt o b e a ss i g n e d t o t h e u ni t s t r an s f erre d o u t an d p rocess f or J u n e . C os tt o b e a ss i g n e d t o t h e u ni t s t r an s f erre d o u t an d p rocess f or J u n e i s

24, 400 res p ec t i v e l y . De t er min e t h ecos tt o b e a ss i g n e d t o t h e u ni t s t r an s f erre d o u t an d p rocess f or J u n e a s f o ll o w s : RC o m p an y P ro d u c t i o n C os tR e p or tC os t A ss i g nm e n tP a r t i c u l a rs U ni t sD i rec tM a t er ia l s C o n v ers i o n C os t s T o t a lC os t s C os tp ere q u i v a l e n t u ni t s

8

17 Completed and transferred out 20,000 unit Total Cost per Equivalent Units

17 C os t A ss i g n e d t o Eq u i v a l e n t u ni t sco m pl e t e d an d t r an s f erre d o u t (A) (20000 \times

340, 000

340,000 Ending work in process inventory Equivalents units in ending work in process 2,000 units 800 units Cost per Equivalent Unit

9

8 Cost assigned to ending work in process(B) ( 2000 ×

9) =

18 , 000 ( 800 ×

8) =

24, 400 T o t a lC os t A cco u n t e d ((A) + (B))

364,400 Table (5) Therefore, the cost to be assigned to the units transferred out and process in is mentioned above. (e) Prepare a production report for the molding department for the month of June. Prepare production cost report for company R as follows: R Company Production Cost Report Molding Department For the month ended June, 2017 Particulars Physical Units Equivalent Units Materials Units Conversion Cost Units to be accounted for: Work in process June 1 0 Add Started into production 22,000 Total units 22,000 Units to account for: Completed and transferred out 20,000 20,000 20,000 Ending work in process 2000 2,000 800 Total physical units 22,000 Total equivalent Units 22,000 20,800 Cost Particulars Direct materials Conversion cost Total cost Cost added during the period

198, 000

364, 400 T o t a lC os t A cco u n t e df or

166, 400

364,400 Total equivalent units 22,000 20,800 Cost per equivalent units

198, 00022, 000 =

166, 40020, 800 =

17 C os t A ss i g nm e n tC o m pl e t e d an d T r an s f erre d o u t : Eq u i v a l e n t u ni t sco m pl e t e d an d t r an s f erre d o u t 20, 000 C os tp ere q u i v a l e n t u ni t s

17 Cost Assigned to Equivalent units completed and transferred out(A) ( 20000 ×

17) =

340, 000 E n d in g w or kin p rocess in v e n t ory : 2, 000800 C os t a ss i g n e df ore n d in g in v e n t ory

8 C os t a ss i g n e d t oe n d in g w or kin p rocess (B) (2000 \times

18, 000 (800 \times

8 ) = $ 6 , 400 24,400 Total Cost Accounted for ( ( A ) + ( B ) ) 364,400 Table (6)

Topic:

Accounting

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Question 63

Views: 5,390

Prepare the physical units of production for each plant.

Topic:

Accounting

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Question 64

Views: 5,672

Identify the calculation of unit cost of $14.26 per gallon.

Topic:

Accounting

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Question 65

Views: 5,328

Calculate the unit cost for May in the farming department .

Topic:

Accounting

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Question 66

Views: 5,455

Explain the costs that company faces as a result of the accident.

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Accounting

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Question 67

Views: 5,572

Explain the steps involved in developing an activity based costing system.

Topic:

Accounting

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Question 68

Views: 5,595

Explain the preparation and use of value added/non-value added activity flowchart.

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Accounting

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Question 69

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Explain the activity cost pool.

Topic:

Accounting

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Question 70

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Explain the factor making the cost drivers accurate and appropriate.

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Accounting

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Question 71

Views: 5,018

Compute (1) Working capital , (2) Current ratio (3) Debt to assets ratio, (4) Free cash flow of Company CS and Corporation V for 2014

Topic:

Accounting

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Question 72

Views: 5,268

Classify the given cost pool on the basis of the level of activities.

Topic:

Accounting

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Question 73

Views: 5,658

Classify the given cost pool on the basis of the level of activities.

Topic:

Accounting

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Question 74

Views: 5,824

Compute the activity based overhead rate for each pool.

Topic:

Accounting

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Question 75

Views: 5,020

Identify the probable cost drivers for the given cost pools of Company W.

Topic:

Accounting

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Question 76

Views: 5,318

Compute the selling costs assigned to Product H under traditional product costing system.

Topic:

Accounting

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Question 77

Views: 5,659

Compute the quality control overhead costs under traditional costing.

Topic:

Accounting

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Question 78

Views: 5,562

Classify the given cost pool on the basis of the level of activities.

Topic:

Accounting

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Question 79

Views: 5,756

Identify at least 12 cost pools for the Company SP.

Topic:

Accounting

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Question 80

Views: 5,098

Prepare the comments, its implications, and the limitations of each of the items supporting the argument that Incorporation E’s financial health is improving.

Topic:

Accounting

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