mojakoe uts 2014 v process costing weighted average method (25%) true sound is a company which...
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MOJAKOE UTS 2014 AKUNTANSI BIAYA
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Problem I Process Costing FIFO Method (20%)
Baxter Products manufactures office furniture by using assembly-line process. Direct
materials type 1 introduced a the start of the process but direct materials type 2 are added only
when the process reaches 75% complete. Conversion cost is incurred evenly throughout
manufacturing. An examination of the company’s Work-in-Process account for August revealed the
following selected information:
Debit side
August 1 balance: 600 units, 40% complete; cost, $44,600*
Production started: 1,800 units
Direct materials used during August: Type 1 $80,000 and Type 2 $31,200
August conversion cost: $1,400
Credit side
Production completed: 1,400 units
*Supplementary records disclosed direct material cost of $30,000 and conversion cost $14,600.
Conversations with manufacturing personnel revealed that the ending work in process was 80%
complete.
Required:
1. Compute the cost per equivalent unit for each type of cost assuming the company uses FIFO method for process costing.
2. Calculate the cost of goods completed during August, and prepare the appropriate journal entry to record completed production.
3. Determine the cost of the August 31 work-in-process inventory.
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Problem II MFOH Journals and Calculation (15%)
Company’s Factory Overhead Information During the Month of October 2013
Actual Factory Overhead Costs $11,150
Actual Unit Produced 3,000 Units
Actual Machine Hours Used 5,800 Machine Hours
The company has chosen machine hours to allocate the factory overhead rate. Total budgeted FOH
for 2013 was $200,000, while the budgeted machine hours used for 2013 was 100,000 machine
hours. The factory overhead will be applied/allocated to the product at a ratio of 2 Machine hour per
unit.
Based on the information above:
1. Prepare the necessary journal to record MFOH related transactions using (a) actual cost, (b) normal cost, and (c) standard cost
2. Prepare the necessary journal to close the MFOH over or under applied using those three methods, assuming that the amount is not material.
Problem III Preparing COGM and COGS Statement (20%)
Cinnabar Company has provided the following data concerning its operation for the year ended
December 31, 20A:
Raw Materials Inventory, December 31, 20A $24,000
Work In Process Inventory, December 31, 20A $30,000
Finished Goods Inventory, December 31, 20A $70,000
Sales $1,100,000
Factory Maintenance $38,400
Administrative Salaries $108,000
Discount on Raw Material Purchase $4,200
Sales Delivery Expenses $16,000
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Interest Income $1,000
Factory Supplies Used $22,400
Common Stock ($10 par value) $2,000,000
Retained Earnings $525,000
Trade Accounts Payable $273,500
Accumulated Depreciation Factory Building and Equipment $47,500
Building and Equipment $500,000
Trade Accounts Receivable $450,000
Cash $170,000
Finished Goods Inventory, January 1, 20A $37,500
Direct Labor $180,000
Bad Debt Expense $2,500
Factory Power and Heat $19,400
Advertising $8,400
Insurance Expense Factory Building and Equipment $4,800
Work in Process, January 1, 20A $84,000
Depreciation Factory Building and Equipment $17,500
Factory Superintendence $100,000
Interest Expense $1,500
Raw Material Purchased $400,000
Indirect Factory Labor $20,000
Sales Returns $2,200
Sales Discounts $1,300
Indirect Material Used for Production $12,500
Raw Material Inventory, January 1, 20A $15,600
Required: Prepare the Cost of Goods Manufactured and Cost of Good Sold Statement for the
Year
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Problem IV Job Order Costing (20%)
Regul Company uses job cost accounting system. Manufacturing overhead is applied to
production at a predetermined rate of 150% of direct labor cost. Any over-or underapplied MOH
is closed to the COGS account at the end of each month. Additional information is available as
follows:
Job 101 was the only job in process at January 31, with accumulated costs as follows:
Direct materials $4,000
Direct labor $2,000
Applied MOH $3,000
Jobs 102, 103, and 104 were started during February. Direct materials requisitions for February
totaled $26,000. Direct labor cost of $20,000 was incurred for February. Actual Manufacturing
Overhead for February was $32,000. The only job still in process on February 28 was job 104,
with costs of $2,800 for direct materials and $1,800 for direct labor.
Required:
a. What was the cost of goods manufactured for February? b. What was the amount of over-or underapplied overhead closed to the cost of goods sold
account at February 28? c. Make the appropriate journal entries for February!
Problem V Process Costing Weighted Average Method (25%)
True Sound is a company which manufactures and sells computer speakers for multimedia
systems. The high quality sound is the result of a signal-processing chip designed by True Sound
Engineers. True Sound’s production consist only one production department, which is assembly
department. The company buys and assembles four basic components (speaker cone, magnet,
plastic housing, and patented amplifier) into a finished speaker. Beginning WIP inventory at
October 1st 2013 consists of 8,000 unit of speaker which is already reached 70% of completion.
During the month of October 2013, the company put another 25,000 units of speaker to be
produced during the month. Ending WIP inventory at October 31st, 2013 consists of 5,000 unit of
speaker (40% of completion) and 3,000 units of speaker (80% completion)
All of the speaker cone will be added at the beginning of the production process, while all of the
magnet will be added when the production process reach 30% completion, all plastic housing
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will be added when the production process reach 65% completion, while all patented amplifier
will be added when the production process reach 85% of completion. Conversion process
incurred evenly throughout the production process.
Production Cost Information in the month of October 2013 were as follows
Cost of Beginning Inventory
Speaker Cone $94,400
Magnet $62,000
Plastic Housing $63,200
Patented Amplifier 0
Conversion Cost $122,080
Costs Added during the Month of October 2013
Speaker Cone $301,600
Magnet $103,000
Plastic Housing $160,800
Patented Amplifier $575,000
Conversion Cost $524,720
Based on the following information (a) prepare a production cost report for the month of
October 2013, using a weighted average method and (b) prepare the necessary journals needed
to record transaction during the month of October 2013 (assuming the finished product is
transferred to F/G inventory warehouse.
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JAWABAN
Problem I – Process Costing – FIFO Method – 20%
1. Cost per equivalent unit
(a) Under FIFO method, the equivalent-unit calculations for each cost category focus
on equivalent units of work done in the current period (August) only. Thus,
beginning WIP inventory equivalent unit is the remaining work that has to be done
in August. Since type 1 material are added at the start of the process, none of type
1 cost is added in work done in August.
Flow of Production
Physical
Units
Direct
Materials 1
Direct
Materials 2
Conversion
Cost
Work-in-Process, beginning 600
Started during current period 1,800
To account for 2,400
Completed and transferred during current period:
From beginning work in process (a)
600 - 600 360
[600 x (100%-100%); 600 x100%; 600 x (100%-40%)]
Started and completed 800 800 800 800
(800 x 100%; 800 x 100%; 800 x 100%)
Work in process, ending 1,000 1,000 1,000 800
(1000 x 100%, 1000 x 100%, 1000 x 80%)
Accounted for 2,400
Equivalent units of work done in current period 1,800 2,400 1,960
Total
Production
cost
Direct
Materials 1
Direct
Materials 2
Conversion
Cost
Work-in-Process, beginning 44,600 30,000 0 14,600
Cost added in current period 162,600 80,000 31,200 51,400
Total costs to account for 207,200 110,000 31,200 66,000
Cost added in current period 80,000 31,200 51,400 Divide by equivalent units of work done in current
period 1,800 2,400 1,960
Cost per equivalent unit of work done in current
period 44.444 13 26.224
Equivalent Units
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(b) Cost added to beginning WIP in current period equals cost per equivalent unit of
work done in current period times equivalent units of work done in current period
2. Cost of goods completed during August and its journal
Cost of goods completed during August is $ 128,776
Journal
3. Cost of the August 31 Work-in-Process Inventory
Cost of the August 31 WIP inventory is $ 78,424
Work in Process - Assembly 162,600
Direct Materials - Type 1 80,000
Direct Materials - Type 2 31,200
Various accounts related to conversion cost 51,400
Finished Good - Inventory 128,776
Work in Process - Assembly 128,776
Total
Production
cost
Direct
Materials 1
Direct
Materials 2
Conversion
Cost
Assignment of cost:
Completed and transferred out ( 1400 units)
Work in process, beginning (600 units) 44,600 30,000 - 14,600
Costs added to beginning WIP in current period (b)
17,241 - 7,800 9,441
Total from beginning inventory 61,841
Started and completed (800 units) 66,935 35,556 10,400 20,980
Total costs completed 128,776
Work in process, ending (1000 units) 78,424 44,444 13,000 20,980
Total costs accounted for 207,200 110,000 31,200 66,000
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Problem II – MFOH Journals and Calculation – 15%
1. Necessary journal to record MFOH related transaction
(a) Actual Cost
Under actual costing, manufacturing overhead cost (MFOH) is the actual factory
overhead costs. Thus, the journal is
(b) Normal Cost
Under normal costing, MFOH is the budgeted indirect cost rate times the actual
quantities of cost-allocation bases. Thus, the journal is
(c) Standard Cost
2. Necessary journal to close the MFOH
(a) Actual Cost
Under actual costing, there is no over or under applied MFOH since there is no
budgeted MFOH on the first place. So, no entry for actual costing
(b) Normal Cost
(c) Standard Cost
Work-in-Process 11,150
MFOH 11,150
Work-in-Process 12,000
MFOH Allocated 12,000
MFOH Control 11,150
Cash Control 11,150
MFOH Allocated 11,600
MFOH control 11,150
COGS 450
MFOH Allocated 12,000
MFOH control 11,150
COGS 850
Budgeted MFOH rate = Budgeted annual indirect cost
Budgeted annual quantity of the cost-allocation base
= $200,000
100000 machine hours
= $2/machine hours
Work-in-Process 11,600
MFOH Allocated 11,600
MFOH Control 11,150
Cash Control 11,150
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Problem III – Preparing COGM and COGS Statement – 20%
Direct materials:
Beginning Inventory, January 1, 20A 15,600
Purchases of Raw Materials 400,000
Discount on Raw Materials Purchase (4,200)
Raw Material Available for Production 411,400
Ending Inventory, December 31, 20A (24,000)
Raw Material Used for Production 387,400
Indirect Material Used for Production (12,500)
Direct Materials Used 374,900
Direct Manufacturing Labor 180,000
Manufcaturing Overhead:
Indirect Factory Labor 20,000
Factory Maintanance 38,400
Factory Supplies Used 22,400
Factory Power and Heat 19,400
Factory Superintendence 100,000
Insurance Expense - Factory Building
and Equipment 4,800
Depreciation - Factory Building
and Equipment 17,500
Indirect Material Used for Production 12,500
Total Manufacturing Overhead 235,000
Manufacturing Cost Incurred During 20A 789,900
Beginning Work In Process Inventory, January 1, 20A 84,000
Total Manufacturing Cost to Account for 873,900
Ending Work In Process Inventory, December 31, 20A (30,000)
Cost of Goods Manufactured 843,900
Cinnabar Company
Schedule of Cost of Goods Manufactured
For the Year Ended December 31, 20A
Beginning Finished Good Inventory, January 1, 20A 37,500
Cost of Goods Manufactured 843,900
Cost of Goods Available for Sale 881,400
Ending Finished Good Inventory, December 31, 20A (70,000)
Cost of Goods Sold 811,400
For the Year Ended December 31, 20A
Cinnabar Company
Schedule of Cost of Goods Sold
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Problem IV – Job Order Costing – 20%
a. Cost of goods manufactured
Using normal costing, indirect cost equals budgeted indirect cost rates x actual
quantities of cost-allocation bases
b. Amount of over or underapplied overhead
c. Journal
Direct Manufacturing Cost
Direct Material Requiseted 26,000
Direct Labor Cost 20,000 46,000
Manufacturing Overhead Cost 30,000
Manufacturing Cost Incurred During February 76,000
Beginning WIP Inventory, February 1 9,000
Total Manufacturing Cost to Account for 85,000
Ending WIP Inventory, December 31 (7,300)
Cost of Goods Manufactured (Feb) 77,700
Actual indirect cost incurred 32,000
Manufacturing overhead cost allocated
(150% x 20,000) 30,000
Underapplied overhead cost 2,000
Work in Process - Inventory 30000
Manufacturing Overhead Allocated 30000
Work in Process -Inventory 26000
Materials Control 26000
Work in Process -Inventory 20000
Cash Control 20000
Manufacturing Overhead Control 32000
Cash Control 32000
COGS 2,000
Manufacturing Overhead Allocated 30,000
Manufacturing Overhead Control 32,000
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Problem V – Process Costing – Weighted Average Method – 25%
(a) Production cost report for the month of October 2013
1. Step 1 Explained.
It was mentioned in the question paper when is a certain direct material added in the
production process. In this case, plastic housing, for example, is added when
production process reach 65% completion, thus, in a 40% completed product there is
0 equivalent unit of plastic housing. While for the conversion costs, the costs are
Units to be accounted for
Units in beginning WIP inventory 8,000
Units started during the period 25,000
Total units to be accounted for 33,000
Units accounted for Physical
Units
Speaker
Cone Magnet
Plastic
Housing
Patented
Amplifier
Conversion
Cost
Completed and transferred out during
October 25,000 25,000 25,000 25,000 25,000 25,000
Units in ending WIP inventory 5,000 (40%) 5,000 5,000 - - 2,000
3,000 (80%) 3,000 3,000 3,000 - 2,400
Total units accounted for 33,000 33,000 33,000 28,000 25,000 29,400
Cost to be accounted for
Total
Production
Cost
Speaker
Cone Magnet
Plastic
Housing
Patented
Amplifier
Conversion
Cost
Cost in beginning WIP inventory 341,680$ 94,400$ 62,000$ 63,200$ -$ 122,080$
Cost added during October 1,665,120 301,600 103,000 160,800 575,000 524,720
Total costs to account for 2,006,800$ 396,000$ 165,000$ 224,000$ 575,000$ 646,800$
Total
Production
Cost
Speaker
Cone Magnet
Plastic
Housing
Patented
Amplifier
Conversion
Cost
Total cost incurred to date 396,000$ 165,000$ 224,000$ 575,000$ 646,800$
Total equivalent units accounted for 33,000 33,000 28,000 25,000 29,400
Cost per equivalent unit 12$ 5$ 8$ 23$ 22$
Total
Production
Cost
Speaker
Cone Magnet
Plastic
Housing
Patented
Amplifier
Conversion
Cost
Cost assigned to units transferred out 1,750,000$ 300,000$ 125,000$ 200,000$ 575,000$ 550,000$
Cost assign to ending WIP inventory
40% completed 129,000 60,000 25,000 - - 44,000
80% completed 127,800 36,000 15,000 24,000 - 52,800
Total cost accounted for 2,006,800$ 396,000$ 165,000$ 224,000$ 575,000$ 646,800$
Step 2: Summary of Costs to be Accounted for
Step 3: Calculation of Cost per Equivalent Unit
Step 4: Assign Cost to Units Transferred Out and Units in Ending WIP Inventory
True Sound
Production Department Production Cost Report ( Weighted Average Method)
Equivalent Unit
Month Ended October 31, 2013
Step 1: Summary of Physical Units of Output and Equivalent Unit Calculation
Physical
Units
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incurred throughout the production process, thus, in a 40% completed product, the
equivalent unit equals completion degree times physical units.
2. Step 2 Explained.
All costs to be accounted for are mentioned in the question paper.
3. Step 3 Explained.
Cost per equivalent unit can be obtained by dividing total cost incurred to date of a
certain cost and the equivalent unit of work done
4. Step 4 Explained.
Cost assigned can be obtained by multiplying cost per equivalent unit and its
equivalent unit. In this case, cost assigned to units transferred out of speaker cone is
its cost per equivalent unit ($12) times its equivalent unit transferred out (25000).
(b) Preparing the necessary journal
Journal
Work-in-Process - Assembly 1,140,400
Speaker Cone Control 301,600
Magnet Control 103,000
Plastic Housing Control 160,800
Patented Amplifier Control 575,000
Work-in-Process - Assembly 524,720
Various accounts related to conversion cost
524,720
Work-in-Process - F/G Inventory 1,750,000
Work-in-Process - Assembly 1,750,000