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ABM Company Cost Accounting Analysis

This document contains information about the materials, labor, and overhead costs for two departments of ABM Company. Department 1 started with 60,000 units, completed 40,000, and had 20,000 still in process at the end. Department 2 started with 40,000 units, completed 30,000, and had 10,000 still in process. It shows the actual and estimated production and costs for each department, including the costs transferred from the previous department, materials, labor, and overhead costs added, and total costs accounted for.

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58 views1 page

ABM Company Cost Accounting Analysis

This document contains information about the materials, labor, and overhead costs for two departments of ABM Company. Department 1 started with 60,000 units, completed 40,000, and had 20,000 still in process at the end. Department 2 started with 40,000 units, completed 30,000, and had 10,000 still in process. It shows the actual and estimated production and costs for each department, including the costs transferred from the previous department, materials, labor, and overhead costs added, and total costs accounted for.

Uploaded by

gazer beam
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Problem 5 – ABM Company

Department 1 Department 2
Materials Conversion Materials Conversion
Actual EP EP Actual EP EP
Started/received 60,000 40,000

Completed & transferred 40,000 40,000 40,000 30,000 30,000 30,000


In process, end 20,000 20,000 15,000 10,000 5,000 8,000
60,000 60,000 55,000 40,000 35,000 38,000

Costs charged to the department


Cost from preceding department 720,000 18.00
Cost added in the department
Materials P 480,000 8.00 P 245,000 7.00
Labor 330,000 6.00 190,000 5.00
Factory overhead 220,000 4.00 114,000 3.00
Total costs added 1,030,000 18.00 549,000 15.00

Total costs 1,030,000 18.00 1,269,000 33.00

Total costs accounted for as follows:


Completed & transferred (40,000 X 18) 720,000 (30,000 X 33) 990,000
In process, end
Cost from preceding department (10,000 X 18) 180,000
Materials (20,000 X 8) 160,000 ( 5,000 X 7 ) 35,000
Labor (15,000 X 6) 90,000 ( 8,000 X 5 ) 40,000
Factory overhead (15,000 X 4) 60,000 310,000 ( 8,000 X 3 ) 24,000 279,000

Total cost as accounted for 1,030,000 1,269,000

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