Units completed and transferred out 1500000 1500000 1500000 1500000 Units
Added on 2020-04-07
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Question 1 A.Units in process, 1 August600000Units started1200000Total units to accounted for1800000Units completed and transferred out1500000Units in process, 31 August300000Total units to accounted for1800000B.Physical flow Equivalent units CabinetsEquivalent unitsComponentsEquivalent units Conversion costsUnits completed and transferred out1500000150000015000001500000Units in process, 31 August30000030000030000060000Total units to accounted for1800000180000018000001560000C.Cost to be accounted forCabinetsComponentsConversion costsTotalCost of Units in process, 1 August$1,200,000.00$12,600,000.00$5,400,000.00$19,200,000.00Costs added during August$2,400,000.00$25,200,000.00$8,640,000.00$36,240,000.00Total cost$3,600,000.00$37,800,000.00$14,040,000.00$55,440,000.00Total units to accounted for1,800,0001,800,0001,560,000Cost per unit$2.00$21.00$9.00$32.00D.Cost of units transferred outCabinetsComponentsConversion costsTotalNumber of Equivalent units150000015000001500000Per Equivalent Unit cost$2.00$21.00$9.00Cost of units transferred out$3,000,000.00$31,500,000.00$13,500,000.00$48,000,000.00
Cost of ending WIP inventoryCabinetsComponentsConversion costsTotalNumber of Equivalent units30000030000060000Per Equivalent Unit cost$2.00$21.00$9.00Cost of units transferred out$600,000.00$6,300,000.00$540,000.00$7,440,000.00E.Cost to be accounted forCost of Units in process, 1 August $ 19,200,000.00 Costs added during August $ 36,240,000.00 Total cost to be accounted for $ 55,440,000.00 Cost accounted forCost of units transferred out $ 48,000,000.00 cost of ending WIP inventory $ 7,440,000.00 Total Cost accounted for $ 55,440,000.00 Question 2 A.Financial issuesCost of setting up of the factory at in the East Asia for making preliminary processing of spicesis $1.2 million. The company needs to take consideration required cost, available funding optionsand cost of funding.The company is having the benefit of $0.22 per kilogram of spice processing in East Asia incomparison of Gold Coast because processing cost at Gold Coast is $0.33 per kilogram andprocessing cost in the proposed setup is $0.11 per kilogram.Environmental issuesCurrent facility of the company is meeting governmental environmental standards but thecompany is having some problems due to complaints of neighbors, this can be reduced byimplementing a new facility which will inure running cost of $17500 and implementation cost of$29000.Social issuesThe company is paying only $3 per hour to the employees however due to long hour work in thecomical fumes employees may get problems in their lungs. Hence company should either make
some provisions for retrenchment compensation for medical expenses of employees or to givethem basic health related facilities or provide them periodic medical compensation.The company is having some problem with the 12 staff members of production wing thisproblem can be reduced by either incurring cost of $285000 as redundancy cost or $43000 costfor a mediator between staff and management. The company should also consider idf these 12staff members will be retrenched with dissatisfaction then it will impact company’s social andenvironmental report.Economic issuesCompany’s quality manager is expected to have reputation enhancement due to the implicationof new facility for the filtering system.B.In addition to above, specified factors company should also consider following factors,Quality of product emerged from pre-processing either at Gold Coast or at East Asia will remainsame hence company should not consider quality factors.Import export rules and other governmental and political rules will impact the transfer cost ofpre-processed spices from East Asia to Gold Coast. In addition, to transfer cost, it will alsoimpact other things like quantity etc.The company should also consider the wrong stories published by the local newspaper whichincurs a reputational loss for the company.Question 3 A.
150020002500300035004000450050005500$- $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00 $30,000.00 Shipping departmental costKilograms of supplies loaded or unloadedShippingDepartmentCostsB.High-low method26240 204005200 2000 1.82520400 2000 1.825 16750VariablecostFixedcostEquation 16750 1.825TotalshippingdepartmentalcostsTotalkilogramsofsuppliesloadedorunloadedC.Calculation of shipping departmental cost
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