The company Chanos Ltd produces puzzles for adults within the framework of a standardized mass production.
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Question:
The company "Chanos Ltd produces puzzles for adults within the framework of a standardized mass production. The production process uses basic raw materials: cardboard and high quality ink. For the manufacture of a puzzle, half a square meter of cardboard and kg of ink are required. The cardboard is inserted at the beginning of the production process and the ink is added at the end by printing the design on the now perforated puzzle. The company uses the cost flow assumption FI.FO to value its inventories.
Here are some data for the month of August X:
The initial stock of semifinished on X was puzzles processed at in terms of conversion costs. The cost of the initial stock amounted to in terms of cardboard costs and in terms of conversion costs.
The conversion cost for the month amounted to
The final stock of semifinished on X was puzzles processed at in terms of conversion costs.
Data are also given regarding the initial stock and purchases of cardboard and ink for the month of August X
Cardboard Ink
Quantity PriceMon Value Quantity PriceMon Value
Initial Stock sqm sqm kg kg
Markets sqm sqm kg kg
The final stock of cardboard was square meters and ink was kg
Requested:
To calculate the production cost of finished and semifinished products in the Cutting Department of the production process by presenting in detail all the logical steps. Also, prepare the monthly Production Cost Report assuming that the company uses the FI.FO cost stream assumption.
To carry out the calendar entries related to the production department for the month of August X
Calculate the cost per equivalent unit of conversion costs if the enterprise adopted the cost flow assumption of the Weighted Average Cost.
Related Book For
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
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