Fish Fillet Incorporated obtains fish and then processes them into frozen fillets and then prepares the frozen fish fillets for
distribution to its retail sales department. Direct materials are added at the initiation of the cycle. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some fillets are spoiled due to nondetectible defects. Inspection occurs when units are 100% completed. Spoiled fillets generally constitute 3.5% of the good fillets.
Data for April 2013 are as follows:
WIP, beginning inventory 4/1/2013 40,000 fillets
Direct materials (100% complete)
Conversion costs (50% complete)
Started during April 75,000 fillets
Completed and transferred out 4/31/2013 100,000 fillets
WIP, ending inventory 431/2013 8,000 fillets
Direct materials (100% complete)
Conversion costs (20% complete)
Costs for April:
WIP, beginning Inventory:
Direct materials $55,000
Conversion costs 40,000
Direct materials added 145,100
Conversion costs added 188,065
Required:
a) What is the number of total spoiled units? Normal spoilage totals? Abnormal spoilage totals?
b) Compute the equivalent units for both direct materials and conversion costs using the weigh average method of process costing? What is the total cost per equivalent unit? Show computations.
c) How much costs are assigned to cost of goods manufactured and cost of ending inventory of work in process? Show computations.
Data for April 2013 are as follows:
WIP, beginning inventory 4/1/2013 40,000 fillets
Direct materials (100% complete)
Conversion costs (50% complete)
Started during April 75,000 fillets
Completed and transferred out 4/31/2013 100,000 fillets
WIP, ending inventory 431/2013 8,000 fillets
Direct materials (100% complete)
Conversion costs (20% complete)
Costs for April:
WIP, beginning Inventory:
Direct materials $55,000
Conversion costs 40,000
Direct materials added 145,100
Conversion costs added 188,065
Required:
a) What is the number of total spoiled units? Normal spoilage totals? Abnormal spoilage totals?
b) Compute the equivalent units for both direct materials and conversion costs using the weigh average method of process costing? What is the total cost per equivalent unit? Show computations.
c) How much costs are assigned to cost of goods manufactured and cost of ending inventory of work in process? Show computations.
1 answer:
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Answer:
Explanation:
D = 60 bags
cost = 80 / bag
s = 20 / order
h = 40% of cost
0.4 * 80 / 100
h= 32 unit/year
D = d * 12 months
D = 60 * 12
D = 720 bags / year
EOQ =
EOQ =
EOQ = 30 bags
Total cost = Total holding cost + total ordering cost
Total holding cost = (Q/2 * H) = (30/2 * 32) = 480
Total ordering cost = (D/Q * 20) = (720/30 *20) = 480
Total cost = 480 + 480 = 960
Total purchasing cost = cost * D = 80 * 720 = 57.600
Percentage= total cost / total purchasing cost * 100
960 / 57.600 * 100
1.67 %