Orange Company manufactures a single product. All material is added at the beginning of the process....
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Orange Company manufactures a single product. All material is added at the beginning of the process. Costs Beginning inventory Current period Total costs Material P 30,000 885,120 P915.120 Conversion P 3,600 335,088 Total P 33,600 P338.688 1,220,208 P1,253,808 UNITS Beginning inventory (30% complete-conversion) Started Completed Ending inventory (70% complete-conversion) Normal spoilage 6,000 units 180,000 units 152,000 units 20,000 units 4,800 units Required: Find ending WIP inventory, abnormal loss, and COGM. Assume that, for conversion costs, abnormal shrinkage is 60 percent. PROBLEM 2 Delightful Yogurt Company produces yogurt in two departments-Mixing and Finishing. In Mixing, all ingredients except fruit are added at the start of production. In Finishing, fruit is added and then the mixture is placed into containers. Adding the fruit to the basic yogurt mixture increases the volume transferred in by the number of gallons of fruit added. Any spoilage that occurs is in the Finishing Department. Spoilage is detected just before the yogurt is placed into containers or at the 98 percent completion point. All spoilage is abnormal. Finishing Department BWIP (100% fruit, 0% container, 30% CC) Gallons transferred in Gallons of fruit added EWIP (100% fruit, 0% container, 60% CC) Gallons transferred out Abnormal spoilage 5,000 gallons 5,500 1,200 1,700 gallons 9,000 1,000 BWIP Costs: Transferred In Fruit CC Current Costs: Transferred In Fruit Containers CC Total Costs P 9,700 10,500 15,000 12,400 54,000 11,000 98,000 P 210,600 Prepare a cost of production report for October 20X5. The company uses weighted average. PROBLEM 3 The following information is available for Hocking Company for March 20X8. All materials are added at the start of production. Beginning Work in Process: (80% complete) Started Normal spoilage (continuous) Abnormal spoilage Ending Work in Process: (55% complete) Transferred out Beginning Work in Process Costs: Material Conversion 8,000 units 35,000 units 6,000 units 2,500 units 15,000 units 19,500 units P 14,000 45,000 Current Costs: Material Conversion Total Costs Required: Prepare a cost of production report for March using FIFO. PROBLEM 4 50,000 175,000 284,000 Lumberton Industries has two departments. Department 1 uses FIFO costing while Department 2 uses weighted average. Units are introduced into the process in Department 1 (this is the only material added in Department 1). Spoilage occurs continuously through the department and normal spoilage should not exceed 10 percent of the units started. Department 2 adds material (packaging) at the 75 percent completion point; this material does not cause an increase in the number of units being processed. A quality control inspection takes place when the goods are 80 percent complete. Spoilage should not exceed 5 percent of the units transferred in from Department 1. The following production cost data are applicable for operations for August 20X7: Department 1 Production Data Beginning inventory (65% complete) Units started Units completed Units in ending inventory (40% complete) Department 1 Cost Data Beginning inventory: Material Conversion Current period: Material 1,000 25,000 22,000 2,800 P 3,850 P 1,550 2,300 P38,080 Conversion 78,645 Total costs to account for Department 2 Production Data Units transferred in Units completed Beginning inventory (90% complete) Units in ending inventory (20% complete) Department 2 Cost Data Beginning inventory: Transferred in Material Conversion Current period: P40,800 24,000 4,320 P113,700 8,000 22,000 24,000 4,500 116,725 P120.575 P 69,120* Transferred in Material Conversion Total costs to account for 53,775 11,079 178,554 P247.674 *This may not be the same amount determined for Department 1; ignore any difference and use this figure. Required: a. b. Compute the equivalent units of production in each department. Determine the cost per equivalent unit in each department and compute the cost transferred out, the cost in ending inventory, and the cost of spoilage (if necessary). Orange Company manufactures a single product. All material is added at the beginning of the process. Costs Beginning inventory Current period Total costs Material P 30,000 885,120 P915.120 Conversion P 3,600 335,088 Total P 33,600 P338.688 1,220,208 P1,253,808 UNITS Beginning inventory (30% complete-conversion) Started Completed Ending inventory (70% complete-conversion) Normal spoilage 6,000 units 180,000 units 152,000 units 20,000 units 4,800 units Required: Find ending WIP inventory, abnormal loss, and COGM. Assume that, for conversion costs, abnormal shrinkage is 60 percent. PROBLEM 2 Delightful Yogurt Company produces yogurt in two departments-Mixing and Finishing. In Mixing, all ingredients except fruit are added at the start of production. In Finishing, fruit is added and then the mixture is placed into containers. Adding the fruit to the basic yogurt mixture increases the volume transferred in by the number of gallons of fruit added. Any spoilage that occurs is in the Finishing Department. Spoilage is detected just before the yogurt is placed into containers or at the 98 percent completion point. All spoilage is abnormal. Finishing Department BWIP (100% fruit, 0% container, 30% CC) Gallons transferred in Gallons of fruit added EWIP (100% fruit, 0% container, 60% CC) Gallons transferred out Abnormal spoilage 5,000 gallons 5,500 1,200 1,700 gallons 9,000 1,000 BWIP Costs: Transferred In Fruit CC Current Costs: Transferred In Fruit Containers CC Total Costs P 9,700 10,500 15,000 12,400 54,000 11,000 98,000 P 210,600 Prepare a cost of production report for October 20X5. The company uses weighted average. PROBLEM 3 The following information is available for Hocking Company for March 20X8. All materials are added at the start of production. Beginning Work in Process: (80% complete) Started Normal spoilage (continuous) Abnormal spoilage Ending Work in Process: (55% complete) Transferred out Beginning Work in Process Costs: Material Conversion 8,000 units 35,000 units 6,000 units 2,500 units 15,000 units 19,500 units P 14,000 45,000 Current Costs: Material Conversion Total Costs Required: Prepare a cost of production report for March using FIFO. PROBLEM 4 50,000 175,000 284,000 Lumberton Industries has two departments. Department 1 uses FIFO costing while Department 2 uses weighted average. Units are introduced into the process in Department 1 (this is the only material added in Department 1). Spoilage occurs continuously through the department and normal spoilage should not exceed 10 percent of the units started. Department 2 adds material (packaging) at the 75 percent completion point; this material does not cause an increase in the number of units being processed. A quality control inspection takes place when the goods are 80 percent complete. Spoilage should not exceed 5 percent of the units transferred in from Department 1. The following production cost data are applicable for operations for August 20X7: Department 1 Production Data Beginning inventory (65% complete) Units started Units completed Units in ending inventory (40% complete) Department 1 Cost Data Beginning inventory: Material Conversion Current period: Material 1,000 25,000 22,000 2,800 P 3,850 P 1,550 2,300 P38,080 Conversion 78,645 Total costs to account for Department 2 Production Data Units transferred in Units completed Beginning inventory (90% complete) Units in ending inventory (20% complete) Department 2 Cost Data Beginning inventory: Transferred in Material Conversion Current period: P40,800 24,000 4,320 P113,700 8,000 22,000 24,000 4,500 116,725 P120.575 P 69,120* Transferred in Material Conversion Total costs to account for 53,775 11,079 178,554 P247.674 *This may not be the same amount determined for Department 1; ignore any difference and use this figure. Required: a. b. Compute the equivalent units of production in each department. Determine the cost per equivalent unit in each department and compute the cost transferred out, the cost in ending inventory, and the cost of spoilage (if necessary).
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