Acct 362 sample final

Sample Final Exam - solution to Question 1

units transferred in 30,000

1.

5,000 30,000 35,000

8,000 260 740 1,000 26,000 1,110 890 2,000

DIRECT LABOUR

8,000 260 740

26,000 1,110 890

37,000

- 185,000

185,000

5.00

DIRECT LABOUR

130,000 (26,000 x $5)

5,550 (1,110 x $5)

4,450 (890 x $5)

1,300 (260 x $5)

3,700 (260 x $5)

40,000 (8,000 x $5)

CONVERSION

0% 15%

beg wip 5,000

20%

25%

40%

70%

75%

Conversion costs added throughout the process

beg wip added units to account for ending WIP normal spoilage abnormal spoilage total units spoiled good units completed normal rework abnormal rework total units reworked

equivalent units

costs in beginning WIP costs added during period total costs to account for

cost per EU

good units completed

add normal rework

add normal spoilage

total good units completed

normal rework

UNIFORMLY

normal rework must be allocated to good units completed and to ending WIP

abnormal rework $ 5,162

normal spoilage $ 2,600

normal spoilage must be allocated to good units completed

$

$ $

$

given

(37,000 x 3%) (2,000 - 1,110) (37,000 - 35,000)

$ 386,000

total

$ 286,000

$ 4,923

$ 2,600 $ 293,523

$ 6,438

$

$

26,000 -

-

35,000

15,000 55,000 70,000

2.00

DIRECT MATERIAL

$

$

$

$

$ $

$ $

$

$

26,000

222 (1,110 x (40% - 20%)) 178 (890 x (40% - 20%))

32,750

3,000 128,000 131,000

4.00

rework

DL added

DIRECT MATERIAL

inspection for rework 37,000 units

normal rework 3% inspected

ending WIP 8,000

inspection for spoilage

1,000 units were spoiled normal spoilage 1% of surviving

8,000 (given) 260 740

5,600 (8.000 x 70%) 195

555

2.

CONVERSION

$ (26,000/34,000 x $6,438)

52,000 (26,000 x $2)

-

-

520 (260 x $2)

1,480 (260 x $2)

$

$

$ $

$ $

104,000 (26,000 x $4)

888 (222 x $4)

712 (178 x $4)

780 (195 x $4)

2,220 (195 x $4)

22,400 (5,600 x $4)

abnormal spoilage

ending WIP

add normal rework total ending WIP

total costs to account for total costs accounted for: good units

abnormal rework abnormal spoilage ending WIP

$ 7,400

$ 78,400 $ 1,515 $ 79,915

$ 386,000

$ 386,000

16,000 (8,000 x $2)

$ 293,523 $ 5,162 $ 7,400 $ 79,915

$ (8,000/34,000 x $6,438)

Sample Final Exam - solution to Question 2

1.

EOQ 

D 500,000 P $800

C $50

EOQ = √ 2x500,000x800 $50

...