Using the fifo basis prepare a process costing report

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Reference no: EM131006684

Assignment 3

ACCT 301

1.  Discuss the Treatment of Normal and Abnormal Spoilage under Job Costing.

2.   PNG Corporation designs and builds roller coasters for amusement parks.  At the end of 20x1, managers estimated overhead costs for 20x2 of $150,000 based on expected production of 5 roller coasters (5 jobs) using 5,000 labor hours each.  Actual overhead costs for 20x2 were $170,000.  PNG actually designed and built 6 roller coasters (6 jobs) with the following direct labor usage and overhead costs:

                                                        Actual Overhead Cost     actual Labor Hours

The Big Dipper (job 1)                           $28,000                           3,500

The Ultimate Scream (job 2)                  35,000                             4,000

Loop Me (job 3)                                    27,000                             5,000

The Screaming Chicken (job 4)              40,000                             2,500

You Don't Know Coasters (job 5)            25,000                             6,000

Old Faithful (job 6)                               15,000                             4,500

Assume PNG uses a normal costing system with the number of labor hours as the overhead allocation base.

a.  Calculate the allocation rate for 20x2.

b.  Calculate the total corporate over- or under applied overhead (specify which) for 20x2.

3.   Following are production data for a process costing system.

Beginning work in process, 30% complete                  12,000 units

Started                                                                   90,000 units

Ending work in process, 70% complete                        8,000 units

           Costs:

Beginning work in process:

Direct Materials                                                         $28,800

Conversion costs                                                        5,220

Materials used during the period                                  216,000

Conversion costs incurred during the period                   139,200

 

a. Using the FIFO basis, prepare a process costing report.

b. Write out the journal entries for the costs incurred and the work performed this period under the FIFO method.

4.   Explain the differences between the weighted average and FIFO process costing methods

Reference no: EM131006684

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