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1. Cortez Chemical Co. uses an average cost proces...

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1. Cortez Chemical Co. uses an average cost processing system. All materials are added at the start of the production process. Labor and overhead are added evenly at the same rate through-out the process. Cortez's records indicate the following data for May: Beginning work in process, May 1 (50% completed) . . . . . . . . . . . . . 1,000 units Started in May. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?? 5,000 units Completed and transferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000 units Ending work in process, on May 31, is 75% completed as to labor and factory overhead. Make the following calculations: a. Equivalent units for direct materials b. Equivalent units for labor and overhead 2. Haskell Brothers products Inc. manufactures a liquid product in one department. Due to the nature of the product and the process, units are regularly lost at the beginning of production. Materials and conversion costs are added evenly throughout the process. The following summaries were prepared for the month of January: Production Summary Units Started in process 10,000 Finished and transferred to the stockroom 8,000 In process, end of month 1,000 Stage of completion 1/2 Lost in process 1,000 Cost summary Materials $132,000 Labor 33,000 Factory overhead 20,625 Calculate the unit cost for materials, labor, and factory overhead for January and show the costs of units transferred and in process. 3. A company manufactures a liquid product called Glitter. The basic ingredients are put into process in Department 1. In Department 2, other materials are added that increase the number of units being processed by 50%. The factory has only two departments. Calculate the following for each department: (a) Unit cost for the month for materials, labor, and factory overhead, (b) Cost of the units transferred, and (c) Cost of the work inprocess. 4. Alpha Manufacturing Co. makes one main product, Bravo, and a by-product, Delta, which splits off from the main product when the work is three-fourths completed. Delta is sold without further processing and without being placed in stock. During June, $1,200 is realized from the sale of the by-product. Make the entries to record the recovery and sale of the by-product, on account, on the assumption that the recovery is treated as one of the following: a. A reduction in the cost of the main product b. Other income

 

Paper#2018 | Written in 18-Jul-2015

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