Mgt402 Assignment 2 idea solution

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MGT502 idea solution By Aryan Ahmad

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ASSIGNMENT QUESTION: Company ABC instituted a new process in March, during which it started 24,000 units in department A. During the month 14,000 units were completed and transferred to the department B. 8000 units (completed 25% with respect to materials and completed 50% with respect to labor and FOH) were still in the process at the end of March. Remaining units were destroyed (normal loss) during processing. Costs incurred by the department A were: materials Rs. 180,000, labor Rs. 140,000 and FOH Rs. 100,000 Required: By considering the above information, you are required to prepare 1. Quantity schedule for “Department A” 2. Schedule of Equivalent Units Produced for “Department A” 3. Schedule of per unit cost calculations for “Department A”

Dep A

 Quantity schedule

Units started in process                                   24,000

Units complete                                    14,000

Units In process                                  8,000

Units Lost                                           2,000

                                                                        24,000

Schedule of Equivalent Units Produced for “Department A”

Direct material       24,000+(8,000*25%)                   = 26,000

Direct Labor           24,000+(8,ooo*50%)                   =28,000

FOH                       24,000+(8,000*50%)                   =28,000

Schedule of Per Units Cost for “Department A”

Direct Material                        180,000/26,000                       = 6.92

Labor                                       140,000/28,000                       = 5.00

FOH                                        100,000/28,000                       = 3.57

                                                                                      15.49

Cost of units transfer to next department

            14,000*15.49      =  216,860