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All materials are added at the beginning of the process .Labour cost and production overhead costs are incurred evenly as the product goes through the process. Production overhead are absorbed at the rate of 100 percent of labour costs.
Opening inventory of 200 units are 100%complete for materials and 75%complete for labour while closing inventory are 100 units and are 100% complete for materials and 50% complete for labour,opening inventory costs are $1800 for materials and $4000 dollars for labour.
Period costs are $19000 for both materials and labour. During the period 2000 units were added to the process,assume no losses use fifo to calculate the total value.
Basic pay for active hours ( 154 hours * $12)= $1848
Overtime premium : ( 4 hours * $6) = $24
Total= $1872Am i correct??
Correction
the answer is
total output 4000
less opening WIP (completed first) 1000
= 3000 units
As we are dealing with FIFO method, opening WIP must be completed firstI think the answer is, 3200 units
transfer from process 2 – closing inventory ( FIFO method)
4000 – 800= 3200 unitsThanks, i do understand.
A company uses total quality management and has recorded the following cost of quality for the period.
staff training $8000
inspection $12000
warranty $20000
rework of faulty items detected before delivery to customers $15000What would be the net benefit of spending extra??
Yeh i read the book and your answer is correct. How about question three tho???
For item 2, it should have been sold in October 2003 for $1000 each, net of selling price.
At 30 September 2003 the closing inventory of a company amounted to $386,400.
The following items were included in this total at cost:
1,000 items which had cost $18 each. These items were all sold in October 2003 for $15 with selling expenses of $800.
Five items which had been in inventory since 19W3, when they were purchased for $100 each, sold in October 203 for $100 each, net of selling expenses.
What figure should appear in the companies statement of financial position at 30 September 2003 for inventory?
A. $382, 600
B. $384,200
C. $387, 100
D. $400,600Not really understanding, could you explain the NRV part for me, will be appreciated.
I worked it out and got a gain of $880. Could you please try the question and see if that’s correct.
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