COST ACCOUNTING 9TH EDITION

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CHAPTER 4 EXERCISES
1. Equivalent Production Department B Cost of Production Report 1 Quantity Schedule: Units Received from Last Depatment: Units completed and transferred out: Units still in process(60% Conversion) Total Units Accounted For

20000 15000 5000 20000 Total Cost 39000

Cost Charged by the Department Cost received from last department Cost Added by the department Material Conversion Total Cost Added by department Total Cost to be Accounted for

Unit Cost 1.95

6500 9000 15500 54500

0.325 0.5 2.775

Cost Accounted for as follows: Cost of Units completed and transferred out: 2.775 15000 Work in Process Closing Inventor Adjusted cost from preceding Department 1.95 X 5000 Material 0.325 5000 Conversion 0.5 X 3000 Total Cost Accounted For Additional Calculations: Equvilant Production Report Units Completed and transferred out Units still in process Equvilant Production Unit Cost

41625

= = =

9750 1625 1500 54500

Material 15000 5000 20000 0.325

Conversion 15000 3000 18000 0.5

2. Costing of units transferred; lost units. Rude Inc. Department A Cost of Production Report 1 Quantity Schedule: Units started in process: Units completed and transferred out: Units still in process(100% M, 50% Con) Units Lost in process Total Units Accounted For

10000 7000 2000 1000 10000

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2 Cost Added by the department Material Conversion Total Cost Added by department Cost Accounted for as follows: Cost of Units completed and transferred out: 8 x Work in Process Closing Inventor Material 3 x Conversion 5 x Total Cost Accounted For Additional Calculations: Equvilant Production Report Units Completed and transferred out Units still in process Equvilant Production Unit Cost Material 7000 2000 9000 3 Conversion 7000 1000 8000 5 Total Cost 27000 40000 67000 Unit Cost 3 5 8

7000 2000 1000

= = =

56000 6000 5000 67000

3. Cost of Production report; no lost units. A Company Department 2 Cost of Production Report 1 Quantity Schedule: Units Received from Last Depatment: Units completed and transferred out: Units still in process(M:50%, Con:25%) Total Units Accounted For

12000 7000 5000 12000 Total Cost 16320 43415 56100 58575 174410

Cost Charged by the Department Cost received from Department 1: Cost added by Department 2: Material Labour F.O.H Total Cost Added by department Cost Accounted for as follows: Cost of Units completed and transferred out: 19.83 x Work in Process Closing Inventor Cost charged by department 1: 1.36 x Material 4.57 x Labour 6.8 FOH 7.1 x Total Cost Accounted For

Unit Cost 1.36 4.57 6.8 7.1 19.83

7000

138810

5000 2500 1250 1250

6800 11425 8500 8875

35600 174410

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4 Additional Calculations: Equvilant Production Report Units Completed and transferred out Units still in process Equvilant Production Unit Cost Material 7000 2500 9500 4.57 Labour 7000 1250 8250 6.8 FOH 7000 1250 8250 7.1

4. Cost of Production report; Normal Spoilage. Wade Company Department 1 Cost of Production Report 1 Quantity Schedule: Units Put in to process Units completed and transferred out: Units still in process(90%) Units Lost in process (Up to 525 Normal) Total Units Accounted For

10500 7000 3000 500 10500 Total Cost 52500 39770 31525 123795

Cost added by Department 2: Material Labour F.O.H Total Cost Added by department Cost Accounted for as follows: Cost of Units completed and transferred out: 12.6 x Work in Process Closing Inventor Material 5.25 x Labour 4.1 FOH 3.25 x Total Cost Accounted For Additional Calculations: Equvilant Production Report Units Completed and transferred out Units still in process Equvilant Production Unit Cost

Unit Cost 5.25 4.1 3.25 12.6

7000 3000 2700 2700

= 15750 11070 8775

88200

35595 123795

Material 7000 3000 10000 5.25

Labour 7000 2700 9700 4.1

FOH 7000 2700 9700 3.25

5. Cost of Production report; Normal Loss. Lauren Chemical Inc. Department 2 Cost of Production Report 1 Quantity Schedule: Units Received from Last Depatment:

55000

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Units completed and transferred out: Units still in process(1/3 Conversion) Units Lost in process Total Units Accounted For 39500 10500 5000 55000 Total Cost 99000

Cost Charged by the Department Cost received from Department 1: Adjusted cost from Last Department Cost added by Department 2: Material Labour F.O.H Total Cost Added by department Cost Accounted for as follows: Cost of Units completed and transferred out: 2.98 x 39500 Work in Process Closing Inventor Cost charged by department 1: 1.98 x 10500 Material Labour 0.64 3500 FOH 0.36 x 3500 Total Cost Accounted For Additional Calculations: Equvilant Production Report

Unit Cost 1.8 1.98

27520 15480 142000

0.64 0.36 2.98

117710

20790 0 2240 1260

24290 142000

Material Units Completed and transferred out Units still in process Equvilant Production Unit Cost

Labour 39500 3500 43000 0.64

FOH 39500 3500 43000 0.36

6. Cost of production report; normal spoilage. Alabama Milling Company Department 2 Cost of Production Report 1 Quantity Schedule: Units Received from Last Depatment: Units completed and transferred out: Units still in process(1/4 Conversion) Units Lost in process Total Units Accounted For

110000 85000 22000 3000 110000 Total Cost 176000

Cost Charged by the Department Cost received from Department 1: Adjusted cost from Last Department Cost added by Department 2: Material Labour

Unit Cost 1.6 1.6448598

26245

0.29

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F.O.H Total Cost Added by department 3 Cost Accounted for as follows: Cost of Units completed and transferred out: 2.07486 x 85000 Work in Process Closing Inventor Cost charged by department 1: 1.64486 x 22000 Material Labour 0.29 5500 FOH 0.14 x 5500 Total Cost Accounted For Additional Calculations: Equvilant Production Report Material Units Completed and transferred out Units still in process Equvilant Production Unit Cost Labour 85000 5500 90500 0.29 FOH 85000 5500 90500 0.14 12670 214915 0.14 2.0748598

176363.08

36186.916 0 1595 770

38551.916 214915

7. Cost of production report; spoilage at end of process. Norman Company Department 2 Cost of Production Report 1 Quantity Schedule: Units Received from Last Depatment: Units completed and transferred out: Units still in process(1/2 Conversion) Units Lost in process Total Units Accounted For

160000 123000 34500 2500 160000 Total Cost 280000

Cost Charged by the Department Cost received from Department 1: Adjusted cost from Last Department Cost added by Department 2: Material Labour F.O.H Total Cost Added by department Adjusted Cost for Lost Units 2500*2.23/123000 0.045325 Cost Accounted for as follows: Cost of Units completed and transferred out: 0.045325+ 2.23 x 123000 Work in Process Closing Inventor Cost charged by department 1: 1.75 x 34500 Material Labour 0.32 x 17250

Unit Cost 1.75

45680 22840 348520

0.32 0.16 2.23

279865

60375 0 5520

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FOH 0.16 Total Cost Accounted For 4 x 17250 2760 68655 348520

Additional Calculations: Equvilant Production Report Material Units Completed and transferred out Units Lost in process Units still in process Equvilant Production Unit Cost Labour 123000 2500 17250 142750 0.32 FOH 123000 2500 17250 142750 0.16

8. Cost of production report; Units lost at end, all normal. Rogers Milling company Department 2 Cost of Production Report 1 Quantity Schedule: Units Received from Last Depatment: Units completed and transferred out: Units still in process(1/4 Conversion) Units Lost in process Total Units Accounted For Cost Charged by the Department Cost received from Department 1: Adjusted cost from Last Department Cost added by Department 2: Material Labour F.O.H Total Cost Added by department Adjusted Cost for Lost Units 3000*2.02/85000 0.071294 Cost Accounted for as follows: Cost of Units completed and transferred out: 0.056471+ 2.02 x 85000 Work in Process Closing Inventor Cost charged by department 1: 1.6 x 22000 Material Labour 0.28 5500 FOH 0.14 x 5500 Total Cost Accounted For Additional Calculations: Equvilant Production Report Material Units Completed and transferred out Units Lost in process Units still in process Equvilant Production Unit Cost Labour 85000 3000 5500 93500 0.28 FOH 85000 3000 5500 93500 0.14

110000 85000 22000 3000 110000 Total Cost 176000 Unit Cost 1.6

26180 13090 215270

0.28 0.14 2.02

177760

35200 0 1540 770

37510 215270

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9. Cost of production report; Abnormal Loss Assembly Department Cost of Production Report 1 Quantity Schedule: Units Received from Cutting Depatment: Units completed and transferred out: Units still in process(100% M, 2/3 Con) Units Lost in process Total Units Accounted For

60000 50000 9000 1000 60000 Total Cost 212400

Cost Charged by the Department Cost received from Department 1: Adjusted cost from Last Department Cost added by Department 2: Material Labour F.O.H Total Cost Added by department Cost Accounted for as follows: Cost of Units completed and transferred out: 7.04 x 50000 Transferred to FOH (Cost of abnormal Loss) Cost received from Department 1: 3.54 x 1000 Material 0.7 x 500 Labour 1.8 x 500 FOH 1 x 500 Work in Process Closing Inventor Cost charged by department 1: 3.54 x Material 0.7 x Labour 1.8 x FOH 1 x Total Cost Accounted For

Unit Cost 3.54

41650 101700 56500 412250

0.7 1.8 1 7.04

352000

= = = =

3540 350 900 500

9000 9000 6000 6000

31860 6300 10800 6000

54960 412250

Additional Calculations: Equvilant Production Report Units Completed and transferred out Units Lost in process Units still in process Equvilant Production Unit Cost Material 50000 500 9000 59500 0.7 Labour 50000 500 6000 56500 1.8 FOH 50000 500 6000 56500 1

10. Cost of production report; addition of materials

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Oloroso Inc. Third Department Cost of Production Report 1 Quantity Schedule: Units Received from Cutting Depatment: Units added by the department Total Units in department Units completed and transferred out: Units still in process(100% M, 50% Con) Total Units Accounted For

20000 20000 40000 32000 8000 40000 Total Cost 30000

Cost Charged by the Department Cost received from Department 2: Adjusted cost from Last Department Cost added by Department 2: Material Labour F.O.H Total Cost Added by department Cost Accounted for as follows: Cost of Units completed and transferred out: 1.40847 x 32000 Work in Process Closing Inventor Cost charged by department 2: 0.75 x Material 0.214634 x Labour 0.246575 x FOH 0.19726 x Total Cost Accounted For

Unit Cost 1.5 0.75 0.2146341 0.2465753 0.1972603 1.4084698

8800 9000 7200 55000

45071.032

8000 9000 4500 4500

6000 1931.7073 1109.589 887.67123

9928.9676 55000

Additional Calculations: Equvilant Production Report Units Completed and transferred out Units Lost in process Units still in process Equvilant Production Unit Cost Material 32000 9000 41000 0.2146341 Labour 32000 4500 36500 0.2465753 FOH 32000 4500 36500 0.19726

11. Cost of Production report; addition of materials: Cresent Corporation Department No. 2 Cost of Production Report 1 Quantity Schedule: Units Received from Cutting Depatment: Units added by the department Total Units in department

20000 10000 30000

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Units completed and transferred out: Units still in process(100% M, 50% Con) Total Units Accounted For 24000 6000 30000 Total Cost 60000

Cost Charged by the Department Cost received from Department 2: Adjusted cost from Last Department Cost added by Department 2: Material Conversion Total Cost Added by department Cost Accounted for as follows: Cost of Units completed and transferred out: 5 x 24000 Work in Process Closing Inventor Cost charged by department 2: 2 x Material 1 x Labour 2 x Total Cost Accounted For

Unit Cost 3 2 1 2 5

30000 54000 144000

120000

6000 6000 3000

12000 6000 6000 24000 144000

Additional Calculations: Equvilant Production Report Units Completed and transferred out Units Lost in process Units still in process Equvilant Production Unit Cost Material 24000 6000 30000 1 Conversion 24000 3000 27000 2

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CHAPTER 4 PROBLEMS
4-1 Equivalent Production: 1) The Number of Equivalent Units of Raw Material in all Inventories. Departments Assembly 10000*100% 10000

Fabrication 6000*25% 1500

Packing 3000*100% 3000

Shipping 8000*100% 8000

2) The Number of Equivalent units of Fabrication Department direct Labour in all Inventories. Departments Assembly 10000*100% 10000

Fabrication 6000*40% 2400

Packing 3000*100% 3000

Shipping 8000*100% 8000

3. The Number of equivalent units of Packaging Department Material and Direct Labour in the Packaging Department Inventory/ Material 3000*60% 1800 Labour 3000*75% 2250

2) Quantity & Equivalent Production Schedules: Lost Units. Fleming Laboratories Inc. 1) Quantity Schedule for each of the three departments a) Blending Department: Units Started in Process Units Completed & Transferd to Testing Department Units Still in Process( 100% M, 1/3 Labour & FOH) Units Lost in Process Total Units accounted for b) Testing Department: Units received from Blending Department Units Completed & Transferd to Terminal Department Units Still in Process( 100% M, 1/3 Labour & FOH) Units Lost in Process Total Units accounted for c) Terminal Department: Units Units 8000

5400 2400 200 8000 Units Units 5400

3200 1800 400 5400 Units Units

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Units received from Testing Department Units Completed & Transferd to Finished Goods Store Room Units Still in Process( 100% M, 2/3 Labour & FOH) Units Lost in Process Total Units accounted for 2) Equvilant Production Schedule for each of the three departments. a) Blending Department: Units Completed and Transferred to Testing Department Units Still in Process( 100% M, 1/3 Labour & FOH) Equivilant Production Quantity b) Testing Department Units Completed and Transferred to Terminal Department Units Still in Process( 100% M, 1/3 Labour & FOH) Equivilant Production Quantity c) Terminal Department: Units Completed and Transferred to Store Room Units Still in Process( 100% M, 2/3 Labour & FOH) Equivilant Production Quantity Material 2100 900 3000 Labour 2100 600 2700 FOH 2100 600 2700 Material 3200 1800 5000 Labour 3200 600 3800 FOH 3200 600 3800 Material 5400 2400 7800 Labour 5400 800 6200 FOH 5400 800 6200 2100 900 200 3200 3200

3) Unit Cost of FOH in Blending Department. Units Completed and Transferred to Testing Department Units Still in Process( 100% M, 1/3 Labour & FOH) Equivilant Production Quantity FOH 5400 800 6200 5580 6200 0.9

Cost Added by the Blending Department= Equvillant Prodcution Quantity of Blending Department= Unit Cost =

4) Adjusted Cost from Proceeding Department in Testing Department if the unit cost transferred in from the Blending Department is $ 5.35 Total Cost received from Blending Department( 5.35 x5400)= No of Good Unist in testing Department= Adjusted Cost in Testing Department= 28890 5000 5.778

4-3. Cost of Production report: Spoilage at end of process, both normal and Abnormal. Dallas Company Department No.1 Cost of Production Report 1 Quantity Schedule:

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Units Started in the Process Units completed and transferred out: Units still in process(100% M, 25% Con) Units Lost in Process Normal Units Lost in process (Abnormal) Total Units Accounted For 10000 8000 1200 460 340 10000 Total Cost 50000 45500 95500 0.575 Unit Cost 5 5 10

Cost Charged by the Department Cost added by Department No.1 Material Conversion Total Cost Added by department Adjustment for loss: 460*10/8000=

Cost Accounted for as follows: Cost of Units completed and transferred out: 0.575+ 10 x Transferred to FOH (Cost of abnormal Loss) 10 x Work in Process Closing Inventor Cost charged by department 1: Material Con Total Cost Accounted For 5 5 x x

8000

84600

340

3400

1200 300

6000 1500 7500 95500

Additional Calculations: Equvilant Production Report Units Completed and transferred out Units Lost in process(abnormal) Units Lost in process(normal) Units still in process Equvilant Production Unit Cost Material 8000 340 460 1200 10000 5 Conversion 8000 340 460 300 9100 5

4-4 Cost of production report: normal & abnormal spoilage. Menninger Inc. Department No.2 Cost of Production Report 1 Quantity Schedule: Units Received from Department 1 Units completed and transferred out: Units still in process(50%) Units Lost in Process Normal(25000*3%) Units Lost in process (Abnormal) Total Units Accounted For

30000 25000 4200 750 50 30000 Total Cost Unit Cost

Cost Charged by the Department

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Cost received from Department 1 Cost added by Department No.1 Material Conversion Total Cost Added by department 135000 4.5

12500 139340 286840

0.5 5 10

Cost Accounted for as follows: Cost of Units completed and transferred out: 10 x 25000 Cost of Normmal Loss Charged to Finished Goods Last Dept Cost= 750*4.5= Conversion 720*5= Transferred to FOH (Cost of abnormal Loss) Preceding Dept Cost= 50*4.5= Conversion 5 x 48 Work in Process Closing Inventor Cost charged by department 1: 4200 x 4.5 Material 0.5 x 0 Con 5 x 2100 Total Cost Accounted For

= 3375 3600 225 240

250000

6975

465

18900 0 10500 29400 286840

Additional Calculations: Equvilant Production Report Units Completed and transferred out Units Lost in process(abnormal) Units Lost in process(normal) Units still in process Equvilant Production Unit Cost Material 25000 (50*96%) (750*96%) 25000 0.5 Conversion 25000 48 720 2100 27868 5

4-5 Cost of production report: normal & abnormal spoilage. Yares Company Department No.2 Cost of Production Report 1 Quantity Schedule: Units Received from Department 1 Units completed and transferred out: Units still in process(60%) Units Lost in Process Normal(8000*5%) Units Lost in process (Abnormal) Total Units Accounted For

14000 8000 5000 400 600 14000 Total Cost 140000 Unit Cost 10

Cost Charged by the Department Cost received from Department 1 Cost added by Department No.1 Material

12000

1.5

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Conversion Total Cost Added by department 89250 241250 7.5 19

Cost Accounted for as follows: Cost of Units completed and transferred out: 19 x 8000 Cost of Normmal Loss Charged to Finished Goods Last Dept Cost= 400*10= Conversion 360*7.5= Transferred to FOH (Cost of abnormal Loss) Preceding Dept Cost= 600*10= Conversion 7.5 x 540 Work in Process Closing Inventor Cost charged by department 1: 5000 x 10 Material 1.5 x 0 Con 7.5 x 3000 Total Cost Accounted For

= 4000 2700 6000 4050

152000

6700

10050

50000 0 22500 72500 241250

Additional Calculations: Equvilant Production Report Units Completed and transferred out Units Lost in process(abnormal) Units Lost in process(normal) Units still in process Equvilant Production Unit Cost Material 8000 (600*90%) (400*90%) 8000 1.5 Conversion 8000 540 360 3000 11900 7.5

4-6 Cost of production report: normal & abnormal spoilage. Neltner Company Department No.1 Cost of Production Report 1 Quantity Schedule: Units Started in Process Units completed and transferred out: Units still in process(90%) Units Lost in Process Normal(9000*5%) Units Lost in process (Abnormal) Total Units Accounted For

10000 7000 2000 450 550 10000 Total Cost Unit Cost

Cost Charged by the Department Cost added by Department No.1 Material A Material B Labour FOH Total Cost Added by department

13370 4500 37580 46975 102425

1.337 0.5 3.834694 4.793367 10.46506

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3 Adjustment for Loss= 450 * 10.46506/7000= Cost Accounted for as follows: Cost of Units completed and transferred out: 0 10.46506 x 7000 Cost of Normal Loss to Finished goods Material A 450 x 1.337 Material B 0 x 0.5 Labour 405 x 3.834694 FOH 405 x 4.793367 Transferred to FOH (Cost of abnormal Loss) Material A 550 x 1.337 Material B 0 x 0.5 Labour 495 x 3.834694 FOH 495 4.793367 0

= 601.65 0 1553.051 1941.314

73255.43

4096.015

735.35 0 1898.173 2372.717

5006.24

Work in Process Closing Inventory: Cost charged by department 1: Material A 2000 x 2000 x Material B Labour 1900 x FOH 1900 Total Cost Accounted For 4

1.337 0.5 3.834694 4.793367

2674 1000 7285.918 9107.398

20067.32 102425

Additional Calculations: Equvilant Production Report Material A 7000 550 450 2000 10000 1.337 Material B 7000 Labour 7000 495 405 1900 9800 3.834694 FOH 7000 495 405 1900 9800 4.793367

Units Completed and transferred out Units Lost in process(abnormal) Unist lost in process (Normal) Units still in process Equvilant Production Unit Cost

2000 9000 0.5

4-7 Cost of production report: normal & abnormal spoilage. Farniente Company Department B. Cost of Production Report 1 Quantity Schedule: Units Received From Department A: Units completed and transferred out: Units still in process(95% Con, 100% Mat) Units Lost in Process Normal(9000*5%) Units Lost in process (Abnormal) Total Units Accounted For

12000 9000 2000 450 550 12000 Total Cost 84000 Unit Cost 7

Cost Charged by the Department Cost Received from Department A Cost added by Department No.1

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Material Labour & FOH Total Cost Added by department 18000 45200 147200 1.636364 3.830508 12.46687

Cost Accounted for as follows: Cost of Units completed and transferred out: 12.46687 x 9000 Cost of Normal Loss 7 x 450 3.830508 x 405 Transferred to FOH (Cost of abnormal Loss) 550 x Last Dept Cost 7 Conversion 495 x 3.830508

112201.8

= = 3850 1896.102

3150 1551.356

5746.102 Work in Process Closing Inventory: Last Deptt: 2000 x Cost Added 2000 x Material Conversion 1900 x Total Cost Accounted For 4

7 1.636364 3.830508

14000 3272.727 7277.966

24550.69 147200

Additional Calculations: Equvilant Production Report Material A 9000 Conversion 9000 495 405 1900 11800 3.830508

Units Completed and transferred out Units Lost in process(abnormal) Unist Lost in Process (Normal) Units still in process Equvilant Production Unit Cost

2000 11000 1.636364

4-8 Cost of Production Report: addition of material Ferry Inc. Department 1 Cost of Production Report 1 Quantity Schedule: Units started in process Units completed and transferred out: Units still in process(1/3 Con, 100% Mat) Units Lost in Process Normal Total Units Accounted For

300000 180000 45000 75000 300000 Total Cost Unit Cost

Cost Charged by the Department Cost added by Department No.1 Material Labour FOH Total Cost Added by department

90000 39000 7800 136800

0.4 0.2 0.04 0.64

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3 Cost Accounted for as follows: Cost of Units completed and transferred out: 0.64 x Work in Process Closing Inventory: Cost Added Material 45000 x Labour 15000 FOH 15000 x Total Cost Accounted For 4 Additional Calculations: Equvilant Production Report Units Completed and transferred out Units still in process Equvilant Production Unit Cost Ferry Inc. Department 2 Cost of Production Report 1 Quantity Schedule: Units Received in Units Added by Department Units completed and transferred out: Units still in process(40% Con, 100% Mat) Total Units Accounted For Material 180000 45000 225000 0.4 Laobur 180000 15000 195000 0.2 FOH 180000 15000 195000 0.04

180000

115200

0.4 0.2 0.04

18000 3000 600

21600 136800

180000 45000 195000 30000

225000

225000 Total Cost 115200 Unit Cost 0.64 0.512

Cost Charged by the Department Cost received from Deptt 1 Adjusted Cost from Deptt 1 Cost added by Department No.1 Material Labour FOH Total Cost Added by department

67500 41400 20700 244800

0.3 0.2 0.1 1.112

Cost Accounted for as follows: Cost of Units completed and transferred out: x 1.112 Work in Process Closing Inventory: Adjusted Cost 30000*0.512= Cost Added Material 30000 x Labour 12000 FOH 12000 x Total Cost Accounted For

195000

216840

15360 0.3 0.2 0.1 9000 2400 1200

27960 244800

Additional Calculations: Equvilant Production Report

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COST ACCOUNTING 9TH EDITION

Units Completed and transferred out Units still in process Equvilant Production Unit Cost Material 195000 30000 225000 0.3 Laobur 195000 12000 207000 0.2 FOH 195000 12000 207000 0.1

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