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Assignment:
Superior Products Manufacturer Limited (SPML) manufactures industrial products that go through
three processing departments – molding, assembling and finishing. The information pertains to the
operations of the molding department for May, 20X3 is as follows:
Units started in molding department 18,200
Cost incurred in molding department: Rs.
Direct material 210,000
Direct labor 077,000
Factory overhead 038,500
14,000 units were completed and transferred to the assembling department during the month of May.
There were 3,500 units as to still-in-process (completed up to 100% material and 50% conversion cost).
700 units were lost during processing and it was treated as normal loss.
Following is the information pertaining to the operations of the assembling department:
11,000 units were completed and transferred to the finishing department. 2,200 units were in process
and completed up to 100% material and 70% conversion cost. Cost incurred in the department is as
follows:
Rs.
Direct material 2,200
Direct labor 45,000
Factory overhead 33,000
During final inspection at the end of the process, it was discovered that 800 units were lost owing to
unavoidable spoilage.
9,000 units were completed in the finishing department and transferred to the store room. 1,500 units
were still in process (converted 30%) and 500 units were lost which were 70% converted but not
charged for any direct material. This loss is to treat as abnormal loss. Cost incurred in finishing
department is:
Rs.
Direct labor 52,000
Factory overhead 41,000
Required: Prepare following schedules for all three departments by using the above information:
a) Quantity Schedule (3 Marks)
b) A schedule of cost to be charged by each department (7 Marks)
c) A schedule of total cost accounted for (7 Marks)
d) A schedule of equivalent production (6 Marks)
e) Cost per unit in each department (3 Marks)
f) Working for normal and abnormal loss (4 Marks)

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Replies to This Discussion

yup its right

nd 3rd me298984 hai

mano rano plz guide me how to calculate abnormal loss in 3rd deptt.

Department no 1:

Quantity schedule:18200

Cost charged to department:

Total cost=115500      unit cost=19.332

Total cost accounted for ---------------------  325479  

Transferred to next department

14000*19.332     ------------------------------   270648

Equivalent units produced:

Direct material= 17500

Factory over head=15750

Direct labor=15750

Cost per Units:

Direct material==12

FOH=2.444

Direct labor=4.888

 

Department no 02 :

Quantity schedule:14000

Cost charged to department:

                  Total cost=350848      unit cost=26.888

cost charged to dept---------------------------350848  

Transferred to next department

                                                               295768

Total cost accounted for  ----------------------------- 305711.78  

Equivalent units produced:

Direct material= 13200

Factory over head=12540

Direct labor=12540

Cost per Units:

Direct material==0.1666

FOH=2.631

Direct labor=3.588

Calculations may be wrong, but the method is perfectly right. so students can get idea from here and then solve it themselves. 

Abnormal Loss:

Department #1

 

Direct material = 100*12                    = 12

Direct labor = 50*4.9                         =   95

FOH = 50*2.4                                   =   120

 ans of dep 2:

Total cost to be accounted for                                               350867                25.33761  

Cost accounted for as Follow:

 

Transferred to next department                                                                               Rs.

(11,000 units * Rs. 27.180344)                                                                           298983.79

 

Quantity schedule

Unit started and process

Unit transfer to the next department          14000

Unit still in process                                           3500

Unit lost in process                                           700

Cost charge to department and cost added by the department

 Direct material                             210000

Direct labor                                     77000

FOH                                                  38500

 Total                                          325500

Cost accounted for as  follows:

Transferred to next department

14000*19.2

Work in process inventory

Direct material (3500*100*12)  42000

Direct labor  (3500*50*4.8)        8400

FOH               (3500*50*2.4)         4200

Total cost accounted for as follows:

Equivalent production

Direct material (14000+3500*100)  17500

Labor and FOH (14000+3500*50)  15750

Unit cost                                       210000/17500  =   12

Direct material                             77000/15750    =  4.8

Direct labor                                   38500/15750    =  2.4

Total                                                                               19.2

 

 

 

18200

 

 

18200

 

12

4.8

2.4

19.23

 

 

268800

 

Quantity schedule

Unit started and process

Unit transfer to the next department          14000

Unit still in process                                           3500

Unit lost in process                                           700

Cost charge to department and cost added by the department

 Direct material                             210000

Direct labor                                     77000

FOH                                                  38500

 Total                                          325500

Cost accounted for as  follows:

Transferred to next department

14000*19.2

Work in process inventory

Direct material (3500*100*12)  42000

Direct labor  (3500*50*4.8)        8400

FOH               (3500*50*2.4)         4200

Total cost accounted for as follows:

Equivalent production

Direct material (14000+3500*100)  17500

Labor and FOH (14000+3500*50)  15750

Unit cost                                       210000/17500  =   12

Direct material                             77000/15750    =  4.8

Direct labor                                   38500/15750    =  2.4

Total                                                                               19.2

Quantity schedule
Unit started and process
Unit transfer to the next department 14000
Unit still in process 3500
Unit lost in process 700
Cost charge to department and cost added by the department
Direct material 210000
Direct labor 77000
FOH 38500
Total 325500
Cost accounted for as follows:
Transferred to next department
14000*19.2
Work in process inventory
Direct material (3500*100*12) 42000
Direct labor (3500*50*4.8) 8400
FOH (3500*50*2.4) 4200
Total cost accounted for as follows:
Equivalent production
Direct material (14000+3500*100) 17500
Labor and FOH (14000+3500*50) 15750
Unit cost 210000/17500 = 12
Direct material 77000/15750 = 4.8
Direct labor 38500/15750 = 2.4
Total 19.2

mano apki unit cost 2.7 kexy i ?

r faizan assemly dpt may hm 800 q add kren gy

4. Unit Cost:

(Total Cost / Number of Equivalent Units Produced)

Previous department                270666.48/13200 =                                   20.50503  

Material:                                              2200/13200        = 0.166666

Labor:                                                45000/12540          = 3.58851

 FOH:                                                 33000/12540           = 2.63157               6.38608

                                                                                                                             26.89111636

4. Unit Cost:

(Total Cost / Number of Equivalent Units Produced)

Previous department                270666.48/13200 =        20.50503                             

Material:                                              2200/13200        = 0.166666

Labor:                                                45000/12540          = 3.58851

 FOH:                                                 33000/12540           = 2.63157  6.38608                
                                                                                                       26.89111   

                                                                                                                           

ap ne 800 unit lost k add nai kia wo b add krny hain

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