Cost accounting questions | Accounting homework help

Howard Poster Incorporated had 12,000 units of work in process in Department A on October 1. 
These units were 60 percent complete as to conversion costs.  Materials are added at the end of the process.  During the month of October, 38,000 units were started and 40,000 units were completed.  Howard had 10,000 units of work in process on October 31.  These units were 75 percent complete as to conversion costs.

 

a)   Compute the equivalent units for materials and conversion costs for the month of October using the FIFO method.

 

b)   Using the average cost method, determine the equivalent units for materials and conversion costs for the month of October.

 

 

 

Materials

Conversion

Costs

 

To complete beginning work in process:

 

 

   Materials

____,______

 

   Labor/Overhead (Conversion Costs)

 

____,______

Started and finished during month:

 

 

   Materials

____,______

 

   Labor/Overhead (Conversion Costs)

 

____,______

Ending work in process:

 

 

   Materials

____,______

 

   Labor/Overhead (Conversion Costs)

     

____,______

Total

____,______

____,______

 

Average cost equivalent units:

 

 

   Finished:  Materials

____,______

 

   Finished:  Labor/Overhead (Conversion Costs)

 

____,______

Ending work in process:

 

 

   Materials

____,______

 

   Labor/Overhead (Conversion Costs)

     

____,______

Total

____,______

____,______

 

 

     2.   Nate Company manufactures Products A and B from a joint process that also yields a by-product, X. 
Nate Company accounts for the revenue from its by-product sales as a deduction from the cost
of its main products.  Additional information is as follows:

 

Product

 

A

B

X

Total

Units produced

  15,000

   9,000

  6,000

  30,000

Joint costs

?

?

?

$180,000

Sales value at split off

$420,000

$140,000

$20,000

$580,000

 

(a)  Assuming that joint product costs are allocated using the relative sales value at split-off approach,
what was the joint cost allocated to Products A and B?

 

(b)  Prepare the journal entry to transfer the finished products to separate inventory accounts.

 

(c)  Assuming the sales value of X is stable, prepare the journal entries to:

      (i)   place the by-product in stock

      (ii)  record the sale of 3,000 units for $10,500 on account.

 

(a)

 

Product

 

Units

 

Relative sales value

Percent
sales value

Assignment
of joint costs

A

____,______

$______,______

____%

$______,______

B

____,______

 ______,______

____%

 ______,______

 

 

$______,______

 

$______,______

 

(b)

Date

Accounts

Refer

Debit

Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                           

 

(c) i)

Date

Accounts

Refer

Debit

Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                           

 

(c) ii)

Date

Accounts

Refer

Debit

Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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