TEST1

Q1
Req1 Req2
Product cost Period cost
Direct material costs 6 Sales com 0.5
Direct labor costs 3 Var Adm expenses 1.5
Var MOH 1 Fixed Adm expenses 5
Fixed MOH 5
15 7
Total product cost 150000 Total period cost 70000
(Volume 10000 products) (Volume 10000 products)

Q2
Req1
Budgeted labour hours 600000 COGS before adjusted 1600000
Budgeted MOH 30000 Under applied 20000
MOH allocation rate 20 COGS after adjusted 1620000
Actual labour hours 35000
Applied MOH 700000
Actual MOH 720000
Under applied 20000

Q3
Req1 ABC Req2
Level of Act Costs Total MOH
Act Rate Standard Deluxe Standard Deluxe Total allocation base
Set up 10 20 30 200 300 Rate
Assembly 6 1000 600 10000 6000 Standard
Handle cus 12 25 25 250 250 Deluxe
10450 6550
 Req3 Req4
Variable cost Contribution margin
Direct material costs 6 Price 30
Direct labor costs 3 Total revenue 240000
Var MOH 1 Total variable costs 96000
Sales com 0.5 Total contribution ma 144000
Var Adm expenses 1.5
Total variable costs 12
(Volume 8000 products) 96000

TAC
Total MOH 17000
Total allocation base 1600
10.625
106250
63750
TEST2
Q1
Req1 Material Conversion Req2
Equivalent unit 3000 2400 Deb WIP_Dept2 260000
Total cost 270000 96000 Cre WIP_Dept 1 260000
Unit cost 90 40
Cost of unit completed 180000 80000 260000

Q2
Req1 Req2
Beginning WIP 5000 Material Conversion
Added 15000 Completed
20000 + From Beginning WI 0 2000
Completed 17000 + Start & completed w 12000 12000
Good 16000 12000 14000
Normal spoilage 800 Ending WIP 3000 1500
Abnormal spoilage 200 Total equivalent units 15000 15500
Ending WIP 3000 Manufacturing costs 100000 42000
Unit cost 6.666667 2.709677
+ Normal spoilage
+ Abnormal spoilage

Q3
Req1 Because of normal spoilage, we record the disposal value only Req2
Deb Cash/Acc Recievable 6000 Deb Cash/Acc Recievable
Cre WIP_#100 6000 Credit WIP_#100
 Req3 Material Conversion
Ending WIP 1000 400
Unit cost 90 40
Cost of Ending WIP 90000 16000 106000

Conversion

9.376344
7501.075
1875.269

Req3
800 COGS adjustment
800 Increase by normal spoilage 20000
Decrease by disposal value -6000
Decrease by scrap -800
13200
Per unit 6.6
Assume that No. of good units is 2,000
COGS per unit after adjusted 106.6