Altima Company Essay Sample

Q1. Altima Company uses an overhead costing system based on direct labour hours for its two merchandises X and Y. The company is sing following an activity-based costing system. and collects the undermentioned information for the month of October.

( 1 ) Compute the unit fabricating cost of Product X under a volume-based costing system based on direct labour hours.

( 2 ) Compute the unit fabricating cost of Product Y under a volume-based costing system based on direct labour hours.

*Note that the direct labour based bing system overcosted the high volume Job B and undercosted the low volume Job A

Q2. Assad Company uses the procedure bing method with the following information for the month of July.

Required:

( 1 ) Compute cost per tantamount unit under the weighted-average method.
EUs for stuffs = 50. 000+20. 000 = 70. 000
EUS for transition = 50. 000+ ( 20. 000*0. 6 ) = 62. 000

( 2 ) Compute cost per tantamount unit under FIFO method.
EUs for DM = 50. 000 + 20. 000 – 30. 000 = 40. 000
EUs for Conv: 50. 000 + 12. 000 – 30. 000 * 0. 3 = 53. 000

Diabetes mellitus: \$ 120. 000/40. 000 = \$ 3 per DM EU
Conv: \$ 199. 810/53. 000= \$ 3. 77 per Conv EU
Entire: \$ 3+ \$ 3. 77= \$ 6. 77 per Europium

( 3 ) Calculate the cost of units completed and transferred out utilizing the weighted-average method. Under WA
50. 000* \$ 6. 71 = \$ 335. 500
Under FIFO
# of units started & A ; completed this period = 50. 000 – 30. 000 = 20. 000 – 20. 000 * \$ 6. 77 = \$ 135. 400
Let’s calculate the cost incurred to complete BWIP:
6. 000 * 0 * \$ 3 = \$ 0
6. 000 * 0. 7 * \$ 3. 77 = \$ 79. 170
Entire cost of units finished from BWIP = \$ 0 + \$ 79. 170 + \$ 65. 500 + \$ 51. 910 = \$ 196. 580 Therefore. the cost of completed and transferred out units = \$ 135. 400 + \$ 196. 580= \$ 331. 980

( 4 ) Calculate the cost of stoping work in procedure utilizing the weighted-average method Under WA
Diabetes mellitus: 20. 000 EUs * \$ 2. 65 = \$ 53. 000
Conv: 12. 000 EUS * \$ 4. 06 = \$ 48. 720
EWIP = \$ 101. 720
Under FIFO
20. 000 * 100 % * \$ 3 + 20. 000 * 0. 6 * \$ 3. 77 = \$ 105. 240

Q3. The Insurance Plus Company has two service sections — actuarial and premium evaluation. and two production sections — selling and gross revenues. The distribution of each service department’s attempts to the other sections is shown below:

The operating costs of the sections were as follows:
Actuarial \$ 50. 000.
Premium Rating \$ 40. 000.
Marketing \$ 60. 000.
Gross saless \$ 70. 000.
The entire cost accumulated in the selling section utilizing the direct method is ( cipher all ratios and per centums to 2 denary topographic points. for illustration 33. 33 % . and round all dollar sums to the nearest whole dollar ) :

Solution:

30/50 ten 50. 000= \$ 30. 000
40/70 ten 40. 000= \$ 22. 857
Therefore. the entire cost accumulated in the selling section = \$ 52. 857 + \$ 60. 000 = \$ 112. 857

Q5. Using the information in Q4. the entire cost accumulated in the selling section utilizing the measure method is ( cipher all ratios and per centums to 2 denary topographic points. for illustration 33. 33 % . and round all dollar sums to the nearest whole dollar ) : Measure 1

First apportioning Actuarial section since it provides 50 % ( 50 % & gt ; 30 % ) to the evaluation section. \$ 50. 000*0. 5 = \$ 25. 000 ? \$ 25. 000+40. 000= \$ 65. 000
? Total allocated sum of Rating Dep’t
\$ 50. 000*0. 3= \$ 15. 000 ? \$ 15. 000+ \$ 60. 000= \$ 75. 000
? Total allocated sum of Marketing Dep’t
\$ 50. 000*0. 2 = \$ 10. 000 ? \$ 10. 000 + \$ 70. 000= \$ 80. 000
? Total allocated sum of Gross saless Dep’t
Measure 2
Allocating the cost in Rating section to the Marketing section utilizing Direct method: \$ 65. 000 * 40/70 = \$ 37. 143 ? \$ 37. 143 + \$ 75. 000 = \$ 112. 143
Q4. Using the information in Q4. the entire cost accumulated in the selling section utilizing the mutual method is ( cipher all ratios and per centums to 2 denary topographic points. for illustration 33. 33 % . and round all dollar sums to the nearest whole dollar ) : Solution:

Actuarial costs = Initial allotment in Actuarial + costs allocated from Rating Rating costs = Initial allotment in Rating + costs allocated from Actuarial

Denote Actuarial Costs = x and Rating costs = Ys
x= \$ 50. 000+0. 3y y= \$ 40. 000+0. 5x
Using two equations.
X=50. 000 + 0. 3 * ( 40. 000 + 0. 5 * Ten )
0. 85X=62. 000
X=72. 941 ? Actuarial Costss
Put X in either equation. so
Y=76. 471 ? Rating Costss

So. entire cost accumulated in the selling section utilizing the mutual method = 0. 3 * 72. 941 + 0. 4 * 76. 471 + 60. 000 = \$ 112. 471.

Allocating cost in each of service sections to production sections:
Marketing Gross saless Costss in Serv. D.
Actuarial 30 % 20 % \$ 72. 941
Amount30 % * \$ 72. 94120 % * \$ 72. 941
Rating 40 % 30 % \$ 76. 471
Amount 40 % * \$ 76. 47130 % * \$ 76. 471
Initial Allocation \$ 60. 000 \$ 70. 000
Entire for each: Selling 0. 3*72. 941 + 0. 4*76. 471 + 60. 000 = \$ 112. 471
Sales0. 2 * 72. 941 + 0. 3 * 76. 471 + 70. 000 =

Q5. Stulce Inc. produces joint merchandises A. B. and C from a joint procedure. Information refering a batch produced in May at a joint cost of \$ 120. 000 was as follows:

Required ( cipher all ratios. per centums. and unit costs to 2 denary topographic points. for illustration 33. 33 % . and round all dollar sums to the nearest whole dollar ) :

1 ) Allocate the joint costs to the joint merchandises utilizing the physical steps method.

2 ) Calculate the gross border for each of the three merchandises utilizing the cost allotment for the physical unit method in portion ( 1 ) above.

3 ) Allocate the joint costs to the joint merchandises utilizing the net realizable method.

4 ) Calculate the gross border for each of the three merchandises utilizing the cost allotment for the net realizable value method in portion ( 3 ) above.