Material K, a metal, is stamped to form a part that is assembled with one of the
Question:
Material K, a metal, is stamped to form a part that is assembled with one of the purchased parts “X”. The unit is then machined and cleaned after which it is assembled with two units of part “Y” to form the finished device known as a “Klebo.” Spray priming and enameling is the final operation.
Time-and-motion studies indicate that the total time required for the manufacture of a unit, in the first operation required 25% of the labor cost, the first assembly an additional 25%, machining and cleaning 12.50%, the second assembly 25%, and painting 12.50%. Factory overhead is considered to follow the same pattern of operations as does labor.
The following data apply to October, the first month of operation:
Material K purchased – 100,000 kilograms – Php25,000
Part X purchased – 80,000 units – Php16,000
Part Y purchased – 150,000 units – Php15,000
Primer and enamel used – Php1,072
Direct labor – Php45,415
Factory overhead – Php24,905
Units finished and sent to finished goods warehouse – 67,000
Units assembled but not painted – 5,000
Units ready for the second assembly – 3,000
Inventories at the end of the month:
a. Material K (kg) – 5,800
b. Part X (units) – 5,000
c. Part Y (units) – 6,000
d. Klebos in the process (units) – 8,000
e. Units in finished goods inventory – 7,500
Compute for the equivalent production of labor.
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren