Idea Solution:

Q.No 1. Weighted Average Method.

 

Model Manufacturing Company

Cost of Production Report

 

Quantity Schedule.

Unit Received                          1500

 

Unit put in process                 7000

Unit complet and transfer       8500

 

Unit of closeing Work in process    2500

Unit complete and transfer            5000

Unit loss abnormal                         600

Unit loss normal                             400

Cost Aculamlated Deptt

Direct Material             8000+22000 = 30000

Direct Labor                  5450+9000 = 14450

FOH                               2790+4000 = 6790

 

Cost Equivalent production

                                           Material               Labor                        FOH

Completed Units                  5000                  5000/45%                   5000/45%

Cloesing WIP                        2500                   1125                            1125

Losses                                     1000   

Total                                      8500                   6125                              6125

 

Cost per Unit.

 

Direct Material             8000   +22000        = 30000

Direct Labor                  5450   +9000           = 14450

FOH                               2790   +4000           =  6790

40%remaining  =                                            3200

45% remaing                                                    6452

25%                                                                 4697

 

 

                                       16240     35000        65975

 

 

 

(2) FIFO Cost Method

 

 

 

Unit Received                          1500

 

Unit put in process                 7000

Unit complet and transfer       8500

 

 

 

 

Cost Incurred During Deptt.

Direct Material               8000

Labor                               5450

FoH                                  2790

                                             16240

Cost Incurred Work in process

Direct Material               22000

Labor                               9000

FoH                                  4000

                                            35000

 

Cost Incurred During Deptt 16240

Cost Incurred Work in process 35000

 

                                                  51240

 

Cost Equivalent Production

Material   300         1500              1500

Labor                       825                 825

 

Accounting Treatment                                      20600

Opening WIP                             16240

Material              1500 x4.4      = 6600

Labor                 1500x 3.6      = 5400

FOH                   1500 x  1.6    = 2400                 30640

                                                                             51240

 

 

 

 

 

Q. No 2.Joint Product & By Product.

 

Hypothetical Company manufactures

Month of November 2011

 

 

(i)                  Physical Quantity ratio method.

Company manufactures  Rs.16300 units

Cost Incurred                    Rs. 16790

19790/16300 x 5542                               5708.59

16790/16300 x 4564                                4701.19

16790/16300 x 3097                               3190.09

16790/16300 x 1956                               2014.78

16790/16300 x 1141                               1175.28         16790

 

 

 

                             

 

(ii)                Selling Price method.

Unit Price     x           Unit Sold= 

4                     x             5542             = 22168

3                     x            4564              = 13692

2                     x            3097              = 6194

6                     x            1956              = 11736

5                    x             1141              = 5705        

                                                            59495

(16790/59495) x 22168                                =6256

(16790/59495) x 13692                                =3864

(16790/59495) x 6194                                  =1748

(16790/59495) x 11736                                =3312

(16790/59495) x 5705                                  =1610

                                                                      16790

(iii)               Hypothetical market value method.

Prod     Unit sold      Further Cost    P/U sale price   Market Value     Hypothetical

A           5542                       1.1                   4                       2.9                         42

B           4564                       0.9                   3                       2.1                          31

C          3097                        0.6                   2                       1.4                         16.91

D          1956                        1.5                   6                       4.5                         66.63

E          1141                        1.3                   5                        3.7                         54.78

                                                                                                               14.6

 

Dived to all on 16300 and multiply with total market value and market value

Calculations.

16300/16071.8x14.6x2.9= 42

16300/16071.8x14.6x2.1= 31

16300/16071.8x14.6x1.4= 16.91

16300/16071.8x14.6x4.5= 66.63

16300/16071.8x14.6x3.7= 54.78