[funmommy]

Derry uses the FIFO method in its process costing system. The following data concern the operations of the company’s first processing department for a recent month:

Work in process, beginning
Units in process 600
Stage of completion with respect to materials 90%
Stage of completion with respect to conversion 10%

Costs in the beginning inventory
Materials $1,782
Conversion 1,374

Units started into production during the month 23,000
Units completed and transferred out 23,100

Costs added to production during the month
Materials costs $71,021
Conversion costs $542,648

Work in process, ending:

Units in process 500
Stage of completion with respect to materials 70%
Stage of completion with respect to conversion 70%

a) Determine the equivalent units of production for materials and conversion costs.
b) Determine the cost per equivalent unit for materials and conversion costs.


Please help
Thanks

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[WISAM]

first : we should determine the QUANTITY SCHEDULE :
Beginning WIP INVENTORY :600
UNITS STARTED & COMPLETED :22500
ENDING WIP INVENTORY :500
a) the equivalent units of production for materials :
beginning WIP inventory : 600 * 0 % = 0 ( if the materials added at the beginning of the period)
units started & completed: 22500 * 100% = 22500
ending WIP inventory : 500 * 100 % = 500
EUP = 0+22500+500 = 23000 UNITS

2- the equivalent units of production for CONVERSION COSTS :
beginning WIP inventory : 600 * 90% = 540
started & completed : 22500 * 100% = 22500
ending WIP inventory : 500 * 70 % = 350
TOTAL EUP = 540 + 22500 + 350 = 23390

b) the cost per equivalent unit for materials =
material costs incurred at the current period / equivalent units of production ( for material )
= 71021 / 23000 = 3.09

the cost pre equivalent unit for conversion costs =
conversion costs incurred at the current period / equivalent units of production ( for conversion costs)
= 542648 / 23390= 23.2 per uint

GOOD LUCK

[roko]

ABC Ltd is in the business of providing management consultation services in Parnell area. ABC bought a property on 1 July 2012 for a cost of $1,500,000. The property consists of land and building. The value of the land is $800,000 at time of purchase. The property is used as offices and seminar rooms. ABC renovates the property in order to make it suitable for its operation. The cost of renovation is $80,000. The renovation is completed in 2 months after the purchase. ABC has a balance date of 30 June.

1. Determine the cost of the property to be recorded in the accounts. (Explain your answer with reference to NZ IAS 16).

2. Assume ABC depreciates the building part of the property on a straight-line basis. Depreciation is $40,000 each year for the building. The company depreciates its PPE to the nearest month. On 1 July 2013, the property is revalued to $1,700,000, of which the land portion appreciated by $100,000. Prepare journal entries to reflect the revaluation for both land and building of the property.

Requirement:

You must cite appropriate paragraph number of NZ IAS 16 in your answer.You do not have to copy down the relevant standards, but you need to use your own words to explain.