Bell Computers, Ltd., located in Liverpool, England, assembles a standardized personal computer from parts it purchases from
Question:
Units to be accounted for:
Work in process, May 1: materials 90%
Complete; conversion 80% complete . . . . . . . . . . . . . 5,000
Started into production . . . . . . . . . . . . . . . . . . . . . . . . . . 29,000
Total units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,000
Units accounted for as follows:
Transferred to next department . . . . . . . . . . . . . . . . . . . 30,000
Work in process, May 31: materials 75%
Complete; conversion 50% complete . . . . . . . . . . . . . 4,000
Total units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,000
Cost Reconciliation
Cost to be accounted for:
Work in process, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . £ 13,400
Cost added in the department . . . . . . . . . . . . . . . . . . . 87,800
Total cost to be accounted for . . . . . . . . . . . . . . . . . . . . £101,200
Cost accounted for as follows:
Work in process, May 31 . . . . . . . . . . . . . . . . . . . . . . . . £ 8,200
Transferred to next department . . . . . . . . . . . . . . . . . . . 93,000
Total cost accounted for . . . . . . . . . . . . . . . . . . . . . . . . £101,200
The companys management would like some additional information about Mays operation in the CPU Assembly Department. (The currency in England is the pound, which is denoted by the symbol £.)
Required:
1. How many units were started and completed during May?
2. What were the equivalent units for May for materials and conversion costs?
3. What were the costs per equivalent unit for May? The following additional data are available concerning the departments costs:
4. Verify the accountants ending work in process inventory figure (£8,200) given in the report.
5. The new manager of the CPU Assembly Department was asked to estimate the incremental cost of processing an additional 1,000 units through the department. He took the unit cost for an equivalent whole unit you computed in (3) above and multiplied this figure by 1,000. Will this method yield a valid estimate of incremental cost?Explain.
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Related Book For
Managerial Accounting
ISBN: 978-0078111006
14th edition
Authors: Ray Garrison, Eric Noreen and Peter Brewer
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