Principles of Cost Accounting: Week 6 (P6-4, P6-6, P6-11)

Principles of Cost Accounting
Week 6 Assignment (P6-4, P6-6, P6-11)

P6-4 Cost of completed units and ending inventory
Big Papi Products, Inc. cans peas and uses an average cost system. For the month of November, The company showed the following:
Peas completed and canned 245,000 lbs
Peas in process at the end of November
100% complete as to peas,50% complete as to labor and overhead, 0% complete to cans 16,500 pounds
Cost Data:
Peas $.10 per/lb
Labor $.25/lb
Overhead $.15/lb
Cans $.07 per can
Each can contains 16oz, or one pound of peas

Required:
1. Calculate the cost of the completed production for November.
2. Show the detailed cost of the ending inventory for November.

P6-9 Average and FIFO cost methods; losses at the beginning and end of processing
Mt. Orab Manufacturing Company uses a process cost system. Its manufacturing operation is carried on in two departments: Machining and Finishing. The Machining Department uses the average cost method and the Finishing Department uses the FIFO cost method. Materials are added in both departments at the beginning of operation, but the added materials do not increase the number of units being processed. Units are lost in the Manufacturing Department throughout the production process, and inspection occurs at the end of the process. The lost units have no scrap value and are considered to be normal loss.
Production statistics for July show the following data:
Machining Finishing
Units in process, July 1 (all material
40% of labor and overhead) 20,000
Units in process, July 1 (all material
80% of labor and overhead) 40,000
Units started in production 140,000
Units completed and transferred 100,000
Units transferred from Machining 100,000
Units completed and transferred to
Finished goods 100,000
Units in process, July 31 (all material,
60% of labor and overhead) 40,000
Units in process, July 31 (all material,
40% of labor and overhead) 40,000
Units lost in production 20,000

Production Costs Machining Finishing
Work in process, July 1:
Materials 40,000 110,000
Labor 24,000 60,000
Factory overhead 8,000 40,000
Costs in Machining Department 240,000

Costs incurred during month:
Materials 280,000 240,000
Labor………… 180,000 160,000
Materials 60,000 80,000

Required:
Prepare a cost of production summary for each department. (Round to three decimal places.)

P6-11 Joint cost allocation with costs after split-off and by-product revenue
Similar to Self-study problem 2.
Mega Oil Company transports crude oil to its refinery where it is processed into main products gasoline, kerosene, and diesel fuel, and by product base oil. The base oil is sold at the split-off for $500,000 of annual revenue, and the joint processing cost to the get the crude oil to split-off are $5,000,000. Additional information includes:
Product Barrels produced Cost of Split-off Selling Price Per Barrel
Gasoline 500,000 2,000,000 25
Kerosene 100,000 500,000 30
Diesel fuel 250,000 1,000,000 20

Required:
Determine the allocation of joint costs, using the relative sales value method, (Hint: Reduce the amount of the joint costs to be allocated by the amount of the by-product Revenue)
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