Transferred-in costs Direct materials Conversion costs Equivalent unit costs of opening work in progress Work in progress, opening (given) Divide by equivalent units of opening work in progress (from Solution Exhibit A) Cost per equivalent unit of opening work in progress NKr 39,200 ÷ 40 NKr 980 – – – NKr 18,000 ÷ 30 NKr 600 Equivalent unit costs of work done in current period only Costs added in current period (given) Divide by equivalent units of work done in current period (from Solution Exhibit A) Cost per equivalent unit of work done in current period only NKr 85,600 ÷ €80 [AQ2] NKr 1,070 NKr 36,000 ÷ 90 NKr 400 NKr 49,725 ÷ 75 NKr 663
Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5 th Edition, Instructor’s Manual © Pearson Education Limited 2012 Solution Exhibit B Step 4: Summarise total costs to account for and assign these costs to units completed and units in closing work in progress using the FIFO Method, Cooking Department of Telemark-Kjemi for June 2010 (in NKr). Total Transferred-in production costs Direct materials Conversion costs costs Cost per Cost per Cost per Equivalent equivalent Total Equivalent equivalent Total Equivalent equivalent Total units unit costs units unit costs units unit costs (10)= (1) (2) (3)=(1)×(2) (4) (5) (6)=(4)×(5) (7) (8) (9)=(7)×(8) (3)+(6)+(9) Panel Ab Total costs to account for work in progress, opening (from Solution Exhibit A) 40 980 * 39,200 0 – 0 30 600 18,000 57,200 Work done in current period only (from Solution Exhibit A) 80 1,070 * 85,600 90 400 36,000 75 663 49,725 171,325 To account for 120 124,800 90 † 36,000 105 ‡ 67,725 228,525 Panel B Assignment of costs Completed and transferred out (90 physical tonnes) Work in progress, opening (40 physical tonnes) 40 980 * 39,200 0 – 0 30 600 18,000 57,200 Work done in current period to complete opening work in progress * 0* * 0 40 † 400 16,000 ‡ 10 ‡ 663 6,630 22,630 Total from opening stock 40 39,200 40 16,000 40 24,630 79,830 Started and completed (50 physical tonnes) || 50 || 1,070 * 53,500 50 || 400 20,000 || 50 || 663 33,150 106,650 Total completed and transferred out (90 physical tonnes) Share with your friends: |