Cheetah Accessories uses four departments to produce handles for kitchen cabinets: Forming requires mixing the raw...
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Cheetah Accessories uses four departments to produce handles for kitchen cabinets: Forming requires mixing the raw materials, Moulding, Spraying and Drying. After leaving the Drying Department, the handles are packaged and sent to the Finished Goods warehouse for shipment to retail outlets. The following data relates to the Spraying Department for the month of June: During the month, 2,000 handles valued at $275 each were transferred from the Molding Department to the Spraying Department. Other production costs incurred during the month are summarized as follows: Direct Materials Added $171,000 Direct Manufacturing Wages $425,600 Manufacturing Overhead $205,200 Process inspection occurs during the process and normally no losses are expected at this stage. However, during the month 200 handles were rejected at inspection. Rejected units from this department are sold as scrap at $400 each. These units had reached the following degree of completion: Transfer from Moulding Direct material added Conversion costs 100% 80% 50% During June, 1,400 handles were completed, packaged and transferred to Finished Goods. Work-in-progress at the end of June had reached the following degree of completion: Transfer from Moulding 100% 60% Materials added Conversion costs 40% Materials added and conversion costs are incurred uniformly throughout each process. There were no incomplete units in the Spraying Department at the beginning of the period. Required: (a) Compute the equivalent units and cost per equivalent units for direct materials (From Moulding & Direct materials added) and conversion costs. (10 marks) (b) Compute the: total cost of the handles completed and transferred out of the Drying Department cost of the unexpected losses ▪ cost of ending work in process inventory in the Spraying Department (3 marks) Post all transactions to the Work in Process Inventory - Spraying Department T-account. What is the ending balance? (5 marks) (d) Prepare the journal entries for the use of total direct materials, direct labour incurred, manufacturing overhead applied and the cost of the units completed and transferred out to the Drying Process. (5 marks) (e) Given that 25% of the unexpected losses were as a result of pilferage, Accessories true loss for the Spraying Department. calculate Chrome (2 marks) Cheetah Accessories uses four departments to produce handles for kitchen cabinets: Forming requires mixing the raw materials, Moulding, Spraying and Drying. After leaving the Drying Department, the handles are packaged and sent to the Finished Goods warehouse for shipment to retail outlets. The following data relates to the Spraying Department for the month of June: During the month, 2,000 handles valued at $275 each were transferred from the Molding Department to the Spraying Department. Other production costs incurred during the month are summarized as follows: Direct Materials Added $171,000 Direct Manufacturing Wages $425,600 Manufacturing Overhead $205,200 Process inspection occurs during the process and normally no losses are expected at this stage. However, during the month 200 handles were rejected at inspection. Rejected units from this department are sold as scrap at $400 each. These units had reached the following degree of completion: Transfer from Moulding Direct material added Conversion costs 100% 80% 50% During June, 1,400 handles were completed, packaged and transferred to Finished Goods. Work-in-progress at the end of June had reached the following degree of completion: Transfer from Moulding 100% 60% Materials added Conversion costs 40% Materials added and conversion costs are incurred uniformly throughout each process. There were no incomplete units in the Spraying Department at the beginning of the period. Required: (a) Compute the equivalent units and cost per equivalent units for direct materials (From Moulding & Direct materials added) and conversion costs. (10 marks) (b) Compute the: total cost of the handles completed and transferred out of the Drying Department cost of the unexpected losses ▪ cost of ending work in process inventory in the Spraying Department (3 marks) Post all transactions to the Work in Process Inventory - Spraying Department T-account. What is the ending balance? (5 marks) (d) Prepare the journal entries for the use of total direct materials, direct labour incurred, manufacturing overhead applied and the cost of the units completed and transferred out to the Drying Process. (5 marks) (e) Given that 25% of the unexpected losses were as a result of pilferage, Accessories true loss for the Spraying Department. calculate Chrome (2 marks)
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