Sunday, 20 January 2013
ASSIGNMENT QUESTION:
Alec Ltd. is one of the largest electronic equipment producers in the country. It undertakes the work according to the consumer tastes and preferences. Following data is for the December 2012.
Cost from department - 1 Rs. 10,000
Cost added in department - 2:
Material Rs. 40,000
Labor Rs. 50,400
FOH Rs. 67,200
The quantity schedule shows that 20,000 units were received during the month from the department - 1 and 12,000 units transferred to finished goods storeroom. 8,000 units in process were 100% complete as to material and 60 % complete as to the conversion cost.
By using the above information, you are required to prepare/calculate:
1. Quantity schedule. 02 Marks
2. Cost accumulated in the department. 06 Marks
3. Accounting treatment / Cost apportionment. 09 Marks
4. Equivalent production units for material & conversion cost. 03 Marks
5. Per unit cost. 07 Marks
Solution
Alec Ltd. is one of the largest electronic equipment producers in the country. It undertakes the work according to the consumer tastes and preferences. Following data is for the December 2012.
Cost from department - 1 Rs. 10,000
Cost added in department - 2:
Material Rs. 40,000
Labor Rs. 50,400
FOH Rs. 67,200
The quantity schedule shows that 20,000 units were received during the month from the department - 1 and 12,000 units transferred to finished goods storeroom. 8,000 units in process were 100% complete as to material and 60 % complete as to the conversion cost.
By using the above information, you are required to prepare/calculate:
1. Quantity schedule. 02 Marks
2. Cost accumulated in the department. 06 Marks
3. Accounting treatment / Cost apportionment. 09 Marks
4. Equivalent production units for material & conversion cost. 03 Marks
5. Per unit cost. 07 Marks
Solution
1- QUANTITY SHEDULE
Units transferd 12000
in process 8000
Units transferd 12000
in process 8000
2- cost accumulated
deprtmnt 1 10000
material 40000
labor 50400
FOH 67200 167600
3- accounting treatment
12000 x 9.5 114000
units in process
from dep 1 8000 x .5 4000
matrl 8000 x 2 16000
labor 4800 x 3 14400
foh 4800 x 4 19200
4- Equivalent units
material 12000 + 8000 20000
conversion cost 12000 + 4800 16800
unit cost
previous deprtmnt 10000/20000 0.5
material 40000/20000 2
labor 50400/16800 3
foh 67200/16800 4
per unit cost total 9.5
deprtmnt 1 10000
material 40000
labor 50400
FOH 67200 167600
3- accounting treatment
12000 x 9.5 114000
units in process
from dep 1 8000 x .5 4000
matrl 8000 x 2 16000
labor 4800 x 3 14400
foh 4800 x 4 19200
4- Equivalent units
material 12000 + 8000 20000
conversion cost 12000 + 4800 16800
unit cost
previous deprtmnt 10000/20000 0.5
material 40000/20000 2
labor 50400/16800 3
foh 67200/16800 4
per unit cost total 9.5
1. 20,000 units
2. Rs. 167,600 (Hint, it must be 100% same as given in question)
3. Cost of units manufactured = 12,000 x 9.5 = 114,000
Units in process 4,000 + 16,000 + 14,400 + 19,200 = 53,600 . So 114,000+53,600=167,600
(Hint, it must be same as given in question and calculated in req-2)
4. 20,000, 20,000, 16,800, 16800 Units
5. (10,000/20,000= 0.50), (40,000/20,000=2.00), (50,400/16,800=3.00), (67,200/16,800=4.00)
sum of all is Rs. 9.50
