Can I get answer from melarcode? Only melarcode answered me correctly last time
ID: 2459696 • Letter: C
Question
Can I get answer from melarcode? Only melarcode answered me correctly last time no any other anonymous.
Given the following information, prepare a cost of production report for Department B for July.
John Chemicals manufactures its products in two departments [A and B]. Data for Department B is listed below:
Units transferred from Department A...................................40,000
Per unit cost.........................................................................$3.20
Units transferred to finished goods......................................26,000
Units still in process [1/3 complete].......................................6000
Costs added by Department B:
Labor...............................................................................$31,500
Factory overhead..............................................................$23,100
All lost units are considered to be normal. Don't forget our per unit rounding rule.
Problem must be solved by the example below so use this:
Department B
Cost of Production Report
For the month of June
Quantity Schedule:
Units received from Department A
40000
Units transferred to finished goods
34000
Units still in process (1/4 labor & FOH)
4000
Units lost in process
2000
40000
Costs charged to Department B:
Total Cost
Unit Cost
Costs transferred from Depatment A
114000
2.85
Costs added by the Department:
Labor
32900
0.94
Factory Overhead
22400
0.64
Total cost added
55300
1.58
Adjusted for lost units
0.15
Total costs to be accounted for
169300
4.58
Costs accounted for as follows:
`
Transferred to Finished goods
(34000*4.58)
155720
Work in process - ending inventory
Adjusted cost from preceding dept
(4000*2.85+0.15)
12000
Labor - 4000*1/4*0.94
940
FOH - 4000*1/4*0.64
640
13580
Total costs to be accounted for
169300
Department B
Cost of Production Report
For the month of June
Quantity Schedule:
Units received from Department A
40000
Units transferred to finished goods
34000
Units still in process (1/4 labor & FOH)
4000
Units lost in process
2000
40000
Costs charged to Department B:
Total Cost
Unit Cost
Costs transferred from Depatment A
114000
2.85
Costs added by the Department:
Labor
32900
0.94
Factory Overhead
22400
0.64
Total cost added
55300
1.58
Adjusted for lost units
0.15
Total costs to be accounted for
169300
4.58
Explanation / Answer
It is a problem on process costing. Goods are produced through two departments A and B. Goods of A transferred to B. Then from B it is transferred to finished goods. Two prolbems are most sigificant here . They are stated below:
1. First consider partly finished goods closing stock. It is 600 units. It is 1/3 rd .complete. So it will be considered as completed 600x(1/3)=200 units. It is known as equivalent quantity.
2. Next one is normal loss units. Total units transferred from A is 40,000. Out of this 26,000 is completed units and 600 unit is semi finsished stock. So balance (40,000-26,000-6000) is 8,000 units. Cost of this units will be bourne by good units produced and end stock.
Based on above discussions calculations are shown below:
Units still in process
(1/3rd labor and FOH)
--------------------------------------------------------------------------------------------------------------------------
Costs accounted for
are as follows:
Labor-
6000*1/3*1.125
Factory overhead-
6000*1/3*0.825
Department B Cost of production report For the month of July Quatity schedule: Units received from Department A 40,000 Units trasferred to finished goods 26,000Units still in process
(1/3rd labor and FOH)
6,000 Units lost in process 8,000 40,000 Costs charged to Department B Total cost Unit cost Costs transfered from Department A 128,000 3.20 Labor cost 31,500 1.125 Factory overhead 23,100 0.825 Total cost added 182,600 1.95 Adjusted for lost units 0.80 Total cost to be accounted for 182,600 5.95