Instructions for Part 3 (Chapter 16) (a) Prepare a production cost report for yo

Question

Instructions for Part 3 (Chapter 16) (a) Prepare a production cost report for your company using the weighted-average method. Instructions for Part 4 (Chapter 17) (a) For each of these cost pools, what would be the likely activity cost driver? (b) Using the following information, determine the overhead rates and the actual cost assigned for each of the activity cost pools in a possible ABC system for your company. (c) (1) The results of ABC can provide a more accurate picture of costs. Discuss the value of your company using this system to determine overhead costs. (2) How might using ABC affect the decision making at your company?

Explanation / Answer

Solution - Part 3:

Computation of Equivalent unit of Production - Weighted Average (Molding Department) Particulars Physical Units Material Conversion (Labor + Overhead) Unit completed & Transferred out 58000 58000 58000 Closing WIP: 24000 Material (100%) 24000 Conversion (30%) 7200 Equivalent units of production 82000 82000 65200

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