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    Dente Q2

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    hanna fhaye dente
    Norman Corporation uses a process costing system to produce its only product. Units are started in the Forming Department and transferred to the Finishing Department to be completed. Spoilage is charged to Factory Overhead Control. In August, 9,000 units were started, 8,000 were transferred, and 1,500 units were in ending inventory. Total costs added were $144,150 which were accounted for through completed units, overhead control, and units in ending inventory.

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    Dente Q2

    Uploaded by

    hanna fhaye dente
    11 views3 pages
    Norman Corporation uses a process costing system to produce its only product. Units are started in the Forming Department and transferred to the Finishing Department to be completed. Spoilage is charged to Factory Overhead Control. In August, 9,000 units were started, 8,000 were transferred, and 1,500 units were in ending inventory. Total costs added were $144,150 which were accounted for through completed units, overhead control, and units in ending inventory.

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    Dente_Q2

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    Norman Corporation uses a process costing system to produce its only product. Units are started in the Forming Department and transferred to the Finishing Department to be completed. Spoilage is charged to Factory Overhead Control. In August, 9,000 units were started, 8,000 were transferred, and 1,500 units were in ending inventory. Total costs added were $144,150 which were accounted for through completed units, overhead control, and units in ending inventory.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    11 views3 pages

    Dente Q2

    Uploaded by

    hanna fhaye dente
    Norman Corporation uses a process costing system to produce its only product. Units are started in the Forming Department and transferred to the Finishing Department to be completed. Spoilage is charged to Factory Overhead Control. In August, 9,000 units were started, 8,000 were transferred, and 1,500 units were in ending inventory. Total costs added were $144,150 which were accounted for through completed units, overhead control, and units in ending inventory.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 3

    Problem 1

    Norman Corporation uses a process cost system with average cost to account for the production of its only product. The products are manufactured in two
    departments. Units of products are startedin the Forming Department and then transferred to the Finishing Department, where they are completed. Units are
    inspected at the end of the production process in the Forming Departmentand the cost of spoilage is charged to Factory Overhead Control. Data related to
    August operations in the

    Forming Department are:

    Units in beginning inventory (stage of completion: 60%


    1,000
    materials, 35% labor and 25% overhead)
    Units started in process 9,000

    Units transferred to the finishing department 8,000

    Units in ending inventory (stage of completion: 100%


    1,500
    materials, 75% labor, 50% overhead)

    Beg. Inventory During the month


    Costs charged to the department
    Materials 2,520.00 72,480.00
    Labor 1,540.00 21,560.00
    Overhead 2,800.00 43,450.00

    Norman Corporation
    Cost of Production Report
    For the Month ended, August

    Materials Labor Overhead


    Actual Work Done EP Work Done EP Work Done EP
    Unit Process Beg. 1,000
    Unit Started 9,000
    10,000
    Unit Completed and transferred 8,000 100% 8,000 100% 8,000 100% 8,000
    Unit IP, end. 1,500 100% 1,500 75% 1,125 50% 750
    Unit loss, end. 500 100% 500 100% 500 100% 500
    10,000 10,000 9,625 9,250
    Cost Charged to the department
    Cost Added to the Department
    IP, beg.
    Materials 2,520
    Labor 1,540
    Overhead 2,800
    Added during this month
    Materials 72,480.00 7.5
    Labor 21,360.00 2.4
    Overhead 43,450.00 5
    Total Cost Added 144,150.00 14.9
    Total Cost to be accounted for 144,150.00 14.9

    Cost Accounted as Follows:


    Completed and Transferred 119,200
    Factory Overhead Control 7,450
    In process, End
    Materials 11,250
    Labor 2,700
    Overhead 3,750 17,700
    Total Cost as Accounted for 144,350

    FIFO METHOD
    Problem 2

    Anchor Company manufactures three main products. A, B, and C from a joint process. Joint costs are allocated on the basis of market value at split off. for June
    Additional information production follows:

    A B C Total
    Units Produced 50,000 40,000 10,000 100,000
    Joint Costs 450,000.00
    Sales Value at SO 420,000.00 279,000.00 60,000.00 759,000.00
    Additional processing costs 88,000.00 30,000.00 12,000.00 130,000.00
    Sales Value if processed

    Requirement: Compute for the total costs of each product using:


    1. Market Value Method (10 points)
    2. Average Unit Cost Method (10 points)

    1. Market Value Method

    Product Units Produced SV and SO Share in Joint Cost Add'l Processing Cost Total Cost
    A 50,000 420,000.00 249,011.86 88,000.00 337,011.86
    B 40,000 279,000.00 165,415.02 30,000.00 195,415.02
    C 10,000 60,000.00 35,573.12 12,000.00 47,573.12
    100,000 759,000.00 450,000.00 130,000.00 580,000.00

    2. Average Unit Cost Method

    Product Units Produced Cost per Unit Share in Joint Cost Add'l Processing Cost Total Cost
    A 50,000 4.5 225,000 88,000.00 313,000.00
    B 40,000 4.5 180,000 30,000.00 210,000.00
    C 10,000 4.5 45,000 12,000.00 57,000
    100,000 130,000.00 580,000.00

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