Exercises2_ Cost Accounting_Production Losses & Cost of Production Report

1. All of the following accounts would be acceptable ones to credit at the time scrap is sold except:
A. Scrap Sales
B. Cost of Goods Sold
C. Factory Overhead Control
D. Work in Process
E. all of the above would be acceptable
2. When spoilage occurs because of some action taken by the customer, the unrecoverable cost of the spoilage should be charged to:
A. Work in Process
B. Spoiled Goods Inventory
C. Factory Overhead Control
D. Applied Factory Overhead
E. none of the above
3. When rework occurs because of some action taken by the customer, the cost of the rework should be charged to:
A. Work in Process
B. Spoiled Goods Inventory
C. Factory Overhead Control
D. Applied Factory Overhead
E. none of the above
4. Newman Company's Job 1865 for the manufacture of 2,200 coats was completed during August at the unit costs presented below. Due to
an internal failure in the production process, 200 coats were found to be spoiled during final inspection that were sold to a jobber for
P6,000.
Direct materials......................................................................................................................................... P20
Direct labor ............................................................................................................................................ 18
Factory overhead...................................................................................................................................... 18
............................................................................................................................................ P56
What would be the unit cost of good coats produced on Job 1865?
A. P57.00
B. P55.00
C. P56.00
D. $58.00
SUPPORTING CALCULATION: P20 + P18 + P18 = P56

5. If abnormal spoilage occurs in a job order costing system, has a material peso value, and is related to a specific job, the recovery value of
the spoiled goods should be
debited to credited to
a. a scrap inventory account the specific job in process
b. the specific job in process overhead
c. a loss account the specific job in process
d. factory overhead sales

6. If normal spoilage is detected at an inspection point within the process (rather than at the end), the cost of that spoilage should be
a. included with the cost of the units sold during the period.
b. included with the cost of the units completed in that department during the period.
c. allocated to ending work in process units and units transferred out based on their relative values.
d. allocated to the good units that have passed the inspection point.

7. The Hilo Company computed the physical flow of units for Department A for the month of April as follows:

Units completed:
From work in process on April 1................................................................................. 10,000
From April production................................................................................................ 30,000
Total..................................................................................................................... 40,000

Materials are added at the beginning of the process. Units of work in process at April 30 were 8,000. The work in process at
April 1 was 80% complete as to conversion costs, and the work in process at April 30 was 60% complete as to conversion
costs. What are the equivalent units of production for the month of April using the fifo method?
MaterialsConversion Costs

A. 48,000 48,000
B. 40,000 47,600
C. 36,800 38,000
 D. 38,000 36,800
E. 48,000 44,800

Problem:

1.Fort Myers Corporation manufactures a product that is processed in two departments: Mixing and Cooking. At the beginning and
end of May, there were no inventories of unfinished work. During May, 50,000 units of this product were completed.
Materials used during May cost P28,000, of which one half were used in the Mixing Department and one half were used in the
Cooking Department. Direct labor wages totaled P60,000, with P40,000 applicable to Mixing and P20,000 to Cooking. The
amounts for direct factory overhead incurred for each department and for general factory overhead apportioned to each
department were:
Mixing Cooking
Department Department
Factory overhead incurred......................................................... P7,500 P9,000
General factory overhead apportioned..................................... 5,000 6,000

Required: Prepare a partial cost of production report, showing the total cost to be accounted for in each department.

2. Average Costing Method. Barcelona Beach Products reports the following data for the first department in its production process:
Units in process at beginning of period (all materials; 3/4 labor
and factory overhead).................................................................................................................................. 5,000
Units started in process............................................................................................................................................ 35,000
Units transferred out................................................................................................................................................ 33,000
Units still in process (all materials; 1/2 labor and factory overhead)........................................................................ 5,000
Units completed but not yet transferred to Finished Goods..................................................................................... 2,000

Related data were:

Work in Process at Added During
Beginning of Period Period
Materials......................................................................................................... P100,000 P 304,000
Labor............................................................................................................... 125,400 407,100
Factory overhead............................................................................................ 173,500 407,750
Total....................................................................................................... P398,900 P 1,118,850

Required: Using the average and FIFO costing method:

(1) Prepare cost of production report.
(2) Compute the unit cost for materials, labor, and factory overhead.

3. Answer Problem 11-7(cost accounting book) . Please use Average and FIFO costing method