1. Waters Salad Dressing had beginning work-in-process in July of $248,320 consisting of $101,640 of materials and $146,680 of conversion costs. There were 16,000 units (one unit equals one case of salad dressing) in beginning work-in-process, 40% complete as to conversion costs. Materials are added at the beginning of the process. During November, 34,000 were transferred out; 1,000 were spoiled and 9,000 remained in ending inventory. The spoiled units were 60% complete for conversion cost. The ending work-in-process was 70% complete for conversion cost. Costs during the period amounted to $781,200 for direct materials and $1,009,280 for conversion. Waters uses the weighted-average-method and identifies all spoilage costs separately.
The number of units started during July was:
2. The Stanhope Corporation produces three outputs: A, B and C from one input. The net-realizable-value of A at the split-off point is $200,000. The net-realizable-value of B at the split-off point is $400,000 and the net-realizable- value of C at the split-off is $50,000. Final sales values are $400,000, $600,000 and $50,000 for A, B and C respectively. However, these prices are subject to erratic change. The additional processing costs for A, B and C are $100,000, $150,000 and $0 respectively. Stanhope produces 120,000 units of A, 120,000 units of B and 60,000 units of C. The total costs incurred up to the split-off point are $300,000.
If the net-realizable-value method is used and product C is accounted for as a joint-product, what amount of joint- costs should be allocated to product A?
3. A summary of the usage of the service department services by other services departments as well as by two producing departments is as follows:
Service Departments Producing Departments
Department S1 S2 S3 P1 P2
S1 --- .10 .05 .40 .45
S2 --- --- --- .45 .55
S3 .10 .10 --- .35 .45
Direct costs in the various departments are as follows:
Department Direct Costs
In what order should the three service departments be allocated, assuming the step-method is used?
4. The Vituilli Company manufactures surgical gowns for hospitals. Their controller, Evah Hieken is preparing the variance analysis report for October. Standard Costs are as follows:
Direct Material 2.0 yards at $6 per yard
Direct Labor0.25 hours at $12 per hour
During October, Ms Hieken's report shows:
100,000 gowns produced
175,000 yards of fabric purchased at a cost of $1,137,500
185,000 yards of fabric used
Employees worked 24,000 hours at a cost of $276,000
The direct labor efficiency variance is
A) $12,000 favorable
B) $12,000 unfavorable
C) $36,000 favorable
D) $36,000 unfavorable
5. Riyyad Co. produces its only product in a highly automated process, expected monthly production is 50,000 units. The required direct material costs $0.85 per unit. Manufacturing overhead costs are $75,000 per month and are allocated based on units of production.
What is the total flexible budget for 50,000 units and 25,000 units, respectively?
A) $117,500; $58,750
B) $ 75,000; $37,500
C) $ 75,000; $38,000
D) $117,500; $96,250
Excel file contains calculations, explanations and answers of various cost accounting problems.