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Chapter 9 1
Chapter 9 1
Problem 3 -
Case 1 Materials Conversion
Started 5,000 WD EP WD EP
3. In process, end
Materials ( 1,500 x 4.44444) 6,667
L & OH ( 1,200 x 10) 12,000
18,667
Problem 5 - ABM Company
Department 1 Department 2
Materials Conversion Materials Conversion
Actual EP EP Actual EP EP
Started/received 60,000 40,000
Note - Equivalent production and unit costs are the same as lost – Normal
discovered at the end. The difference is only on the allocation of the cost.
Problem 10
Received 5,000
Completed 3,800 100% 3,800 100% 3,800
IP end 800 40% 320 20 160
Lost 400 100% 400 100% 400
5,000 4,520 4,360
Costs charged to the dept.
Cost from prec. Dept 60,000 12.00
Cost added in the dept.
Materials 22.600 5.00
Conversion cost 17,440 4.00
Total added 40,040 9.00
Total costs as accounted for 100,040 21,00
Costs accounted for as follows
Completed ( 3.800 x 21) 79,800
Spoiled goods ( 400 x 15) 6,000
FOC 400 x (21 – 15) 2,400
IP end
Cost from prec. Dept. ( 800 x 12) 9,600
Mat. ( 320 x 5) 1,600
Conversion ( 160 x 4 ) 640 11,840
Total costs as accounted for 100,040