Reference no: EM131390360

Cornerstone Exercise 6.6 (Algorithmic)

Apeto Company produces premium chocolate candy bars. Conversion costs are added uniformly. For February, EWIP is 30 percent complete with respect to conversion costs. Materials are added at the beginning of the process. The following information is provided for February:

Physical flow schedule:
Units to accounts for:
Units in BWIP		0
Units started		60,000
Total units to account for		60,000
Units to account for:
Units completed
From BWIP	0
Started and completed	48,000	48,000
Units in EWIP		12,000
Total units accounted for		60,000

 

Inputs
Direct Materials	Conversion Costs
$30,000	$61,920

Required:

1. Calculate the equivalent units for each input category.

2. Calculate the unit cost for each category and in total. If required, round your answer to the nearest cent.

Cornerstone Exercise 7.1 (Algorithmic)

Calculating and Using a Single Charging Rate

The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:

Fixed costs (salaries, tools): $61,600 per year

Variable costs (supplies): $1.40 per maintenance hour

Estimated usage by:
Assembly Department	4,500
Fabricating Department	6,400
Packaging Department	11,100
Total maintenance hours	22,000
Actual usage by:
Assembly Department	3,750
Fabricating Department	6,500
Packaging Department	10,300
Total maintenance hoarse	20,550

Required:

1. Calculate a single charging rate for the Maintenance Department. Round your answer to the nearest cent.

2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year.

3. What if the Assembly Department used 3,800 maintenance hours in the year? How much would have been charged out to the three departments?

Cornerstone Exercise 7.7 (Algorithmic)

Allocating Joint Costs Using the Physical Units Method

Orchard Fresh, Inc., purchases apples from local orchards and sorts them into four categories. Grade A are large blemish-free apples that can be sold to gourmet fruit sellers. Grade B apples are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores. Apples for slices are even smaller than Grade B apples and have blemishes. Apples for applesauce are of lower grade than apples for slices, yet still suitable for canning. Information on a recent purchase of 28,000 pounds of apples is as follows:

Grades	Pounds
Grade A	1,680
Grade B	8,400
Slices	12,600
Applesauce	5,320
Total	28,000

Total joint cost is $22,400.

Required:

1. Allocate the joint cost to the four grades of apples using the physical unit's method.

2. Allocate the joint cost to the four grades of apples by finding the average joint cost per pound and multiplying it by the number of pounds in the grade. Round the average cost answer to the nearest cent.

Book - Cornerstones of Cost Management, 3rd edition By- Don R. Hansen & Maryanne M. Mowen.