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    Case 1: Cost Flows: Lecture-12

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    Aman Pratik
    This document contains three case studies related to job order costing and process costing. The first case provides cost information for a specific job and calculates the cost of the job and selling price to achieve a 25% profit margin. The second case uses process costing to calculate equivalent units, cost per equivalent unit, and cost of ending inventory for a manufacturing process. The third case also uses process costing to calculate cost of goods transferred out and ending work-in-process for the month using weighted average and FIFO costing methods.

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    Case 1: Cost Flows: Lecture-12

    Uploaded by

    Aman Pratik
    105 views2 pages
    This document contains three case studies related to job order costing and process costing. The first case provides cost information for a specific job and calculates the cost of the job and selling price to achieve a 25% profit margin. The second case uses process costing to calculate equivalent units, cost per equivalent unit, and cost of ending inventory for a manufacturing process. The third case also uses process costing to calculate cost of goods transferred out and ending work-in-process for the month using weighted average and FIFO costing methods.

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    This document contains three case studies related to job order costing and process costing. The first case provides cost information for a specific job and calculates the cost of the job and selling price to achieve a 25% profit margin. The second case uses process costing to calculate equivalent units, cost per equivalent unit, and cost of ending inventory for a manufacturing process. The third case also uses process costing to calculate cost of goods transferred out and ending work-in-process for the month using weighted average and FIFO costing methods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    105 views2 pages

    Case 1: Cost Flows: Lecture-12

    Uploaded by

    Aman Pratik
    This document contains three case studies related to job order costing and process costing. The first case provides cost information for a specific job and calculates the cost of the job and selling price to achieve a 25% profit margin. The second case uses process costing to calculate equivalent units, cost per equivalent unit, and cost of ending inventory for a manufacturing process. The third case also uses process costing to calculate cost of goods transferred out and ending work-in-process for the month using weighted average and FIFO costing methods.

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    Lecture-12

    1. The following direct costs were incurred on Job no. 678 of standard T.V. Company.

    Materials $4020
    Wages
    Dept. A 60 hours @$3 per hour
    Dept. B 40 hours @$2 per hour
    Dept. C 20 hours @$5 per hour
    overhead expenses were estimated as follows:
    Variable overheads:
    Dept. A $5000 for 5000 labour hours
    Dept. B $3000 for 1500 labour hours
    Dept. C $2000 for 500 labour hours
    Fixed overhead estimated at $20,000 for 10,000 normal working hours
     You are required to calculate the cost of Job no. 678 and calculate the price to give profit
    of 25% on selling price.

    Case 1: Cost Flows


    The following is a job cost sheet for a special product:
    Job No. 711 Date Started 5/26
    Date Completed 6/15
    Raw materials Direct labor
    Date Type Cost Qty. Amount Cost/hr. Hours Amount
    5/26 130 $30 6 $180 $18 5 $90
    6/15 248 10 20 200 15 10 150
    $380 15 $240

    Total direct materials $380


    Total direct labor 240
    Overhead (15 direct labor hours @$10/hour) 150
    Total job cost $770

    Overhead is allocated based on direct labor hours (DLH). The raw materials were in inventory
    before being used on job #711. The product is sold on 7/10. Identify the cost flows on each of
    these dates: 5/26, 6/15 and 7/10.

    Case 2: DeJure Scents

    DeJure Scents manufactures an aftershave and uses process costing. All materials are added at
    the beginning of the process and conversion costs are incurred uniformly over time. In May,
    DeJure started 15,000 gallons. There was no beginning inventory. May’s ending inventory of
    work in process was 2,000 gallons, which were 50 per cent complete with respect to conversion
    costs.
    In May, conversion costs were $28,000 and materials costs were $45,000.

    Required:
     Calculate the equivalent units of conversion and materials.
     Calculate the cost per equivalent unit of conversion and materials.
     Calculate the cost of the ending inventory and the cost transferred to finished goods
    inventory.

    Case 3: Neweway Plastics

    Neweway Plastics manufacturers an acrylic compound used in automobile bumpers in a


    continuous flow process. Raw material is added at the beginning of the process and conversion
    costs are incurred uniformly over the process. The accompanying table summarizes the results of
    operations for May:

    Beginning work in process (units) 6,000


    Raw materials $2,680
    Conversion costs (50%) 892 $3,572
    Units completed and transferred out 40,000
    Units started in May 38,000
    Ending work-in-process (units) 4,000 (70%)1
    Conversion costs incurred in May $17,512
    Material costs incurred in May $19,760

    Required:

     Compute the cost of goods transferred out and the ending work-in-process for the month
    of May using both the weighted average and FIFO methods.

    1
    Percentages denote percentage complete

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