COM OMM 305CHAPTER4REVI EW
Questions 1. Identify which costing system—job-order or process—the following companies would primarily use: (a)
Quaker Oats, (b) Ford Motor Company of Canada, (c) Kinko's Print Shop, and (d) Warner Bros. Motion Pictures. 2. Contrast the primary focus of job-order cost accounting and of process cost accounting. 3. What are the similarities between a job-order and a process cost system? 4. Your roommate is confused about the features of process cost accounting. Identify and explain the distinctive features for your roommate. differences in the flow of costs between job-order cost 5. Mel Storrer believes there are no significant differences accounting and process cost accounting. Is Mel correct? Explain. 6. (a) What source documents are used in assigning (1) materials and (2) labour to production in a process cost system? (b) What criterion and basis are commonly used in allocating overhead to processes? 7. At Ace Company, overhead is assigned to production departments at the rate of $5 per machine hour. In July, machine hours were 3,000 in the machining department and 2,400 in the assembly department. Prepare the entry to assign overhead to production. 8. Gary Weiss is uncertain about the steps used to prepare a production cost report. State the procedures that are required in the sequence in which they are performed. 9. What is meant by the term “equivalent units of production”? 10. How are equivalent units of production calculated? 11. Wetaskawin Company had zero units of beginning work in process. During the period, 9,000 units were completed, and there were 600 units of ending work in process. What were the units started into production? 12. Mendle Co. has zero units of beginning work in process. During the period, 12,000 units were completed, and 800 units of ending work in process were one-fifth complete complete in terms of conversion cost and 100% complete in terms of materials cost. What were the equivalent units of production for (a) materials and (b) conversion costs? 13. Venturino Co. started 3,000 units for the period. Its beginning inventory is 500 units one-fourth complete in terms of conversion costs and 100% complete in terms of materials costs. Its ending inventory is 200 units one-fifth complete in terms of conversion costs and 100% complete in terms of materials costs. How many units were transferred out during this period? 14. Kiner Company transfers out 14,000 units and has 2,000 units of ending work in process that are 25% complete. Materials Materials are entered at the beginning of the process and there is no beginning work in process. Assuming unit materials costs of $3 and unit conversion costs of $6, what are the costs to be assigned to units (a) transferred out and (b) in ending work in process? 15. (a) Eve Adams believes the production cost report is an external report for shareholders. Is Eve correct? Explain. (b) Identify the sections in a production cost report. 16. What purposes are served by a production cost report? 17. At El Dakiky Company, there are 800 units of ending work in process that are 100% complete in terms of
materials and 40% complete in terms of conversion costs. If the unit cost of materials is $4 and the costs assigned to the 800 units is $6,000, what is the per-unit conversion cost? between operations costing and a process costing system? 18. What is the difference between 19. How does a company decide whether to use a job-order or a process cost system?
*20. Silva Co. started and completed 2,000 units for the period. Its beginning inventory is 600 units 25% complete and its ending inventory is 400 units 20% complete. Silva uses the FIFO method to calculate equivalent units. How many units were transferred out this period?
ANSWE WERSTO QUESTI ONS 1. ( a) Pr ocesscos t . ( b) Pr ocesscos t . ( c) Jobor der . ( d) Jobor der . 2. Th ep r i ma r yf o c uso fj o bo r d erc os ta c c ou nt i n gi so nt h ei n di v i d ua lj o b.I np r o c es sc o s t a c c o u nt i n g,t h ep r i ma r yf o cu si so nt h ep r o ce s se si n v ol v e di np r od uc i n gh omo ge ne ou s pr oduc t s . 3. Thes i mi l ar i t i esar e:( 1)al l t hr eemanuf ac t ur i ngc os tel ement s —d —di r ec tmat er i al s ,di r ec tl abour , a ndo v er head—ar et hes ame;( 2)t heac c umul at i onoft hec os t sofmat er i al s ,l abour ,and o v er h ea di st h es ame ;a nd( 3 )t h efl o wo fc os t si st h es ame . 4. Thef eat ur esofpr oc es sc os tac c ount i ngar e:( 1)s epar at ewor ki npr oc es sac c ount sf or eac hpr oc es s ,( 2)pr oduc t i onc os tr epor t s ,( 3)pr oduc tc os t st hatar ec omput edf oreac h a c co un t i n gp er i od ,a nd( 4 )un i tc os t st h ata r ec omp ut e db as e do nt o t a lma nu f a ct u r i n g c o s t s . 5. Meli sco r r ec t .Th efl o w ofc os t si st hes amei npr oc es sc os tac c ount i n gasi nj obor d erc os t ac c oun t i ng.Theme met hodofas si gni ngcos t s ,howev er ,i ss i gni fi cant l ydi ffer ent . 6. ( a) ( 1) Mat er i al s ar e char ged t o pr oduct i on on t he basi s ofma mat er i al sr equi si t i on sl i ps. ( 2) L ab ou ri su s ual l yc h ar g ed t op r o du c t i o no nt h eb as i so ft h ep ay r o l lr e gi s t e ror d ep ar t me nt a lpa yr ol l s ummar i es . ( b) Thec r i t er i onus edi nas s i gni ngo v er headt opr oc es s esi st oi dent i f yt heac t i v i t yt hat “ d r i v e s ”o rc aus est hec os t .I nman yc ompani est hi sac t i v i t yi smac hi net i me,no t di r ec tl abour . 7. Theent r yt oas s i gno v er headt opr oduc t i oni s :
J ul y3 1 Wor ki nPr oc es s —Mac hi ni ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wor ki nPr oc es s —As s embl y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Manuf ac t u r i ngOv er head. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 7, 0 00
15, 000 12, 000
8. T opr epar eapr oduc t i onc os tr epor t ,f ours t epsar ef ol l o wed:( a)c o mp mput et heph y si c aluni t fl ow, ( b)c o mp mp ut ee qui v al entuni t sofpr od uc t i o n,( c )c omput epr oduc t i onc os t speru ni t ,and( d ) pr ep ar eac os tr ec onc i l i at i ons chedul e. 9. Eq ui v a l e ntu ni t so fp r od uc t i o n me as ur et h e wor kd on ed ur i n gt h ep er i o d,e x pr e ss e di n f u l l yc omp l e t e du ni t s . Th i si n v ol v e s de t e r mi n i n gt h ea mo mo un to fwo r kc o mp mpl e t e do n unfi ni s heduni t si nendi ngi n vent or y .
10. Equi v al entuni t sofpr oduc t i onar et hes um of :( 1)uni t scompl et edandt r ans f er r edoutand ( 2)equi v al entuni t sofendi ngwor ki npr oc es s .
11. Uni t ss t ar t edi nt opr oduc t i onwer e9, 600or( 9, 000+600) . 12.
Uni t st r ans f er r edout Wo r ki npr o c es s 800X100 % 800X20% Tot al equi v al entuni t s 13.Uni t st r ans f er r edoutwer e3, 300. Uni t st obeac c ount edf or Wor ki np r o ce s s( b eg i n ni n g) St ar t edi nt opr oduc t i on Tot al uni t s
Uni t sac c ount edf or Comp l e t e da ndt r a ns f e r r e do ut Wor ki npr o ce s s( e nd i n g) Tot al uni t s
Equi v al entUni t s b) a)Mat er i a Co nv e r s i o n l s Cost s 1 2, 0 00 1 2, 0 00 800 1 2, 8 00
160 1 2, 1 60
500 3 , 0 00 3 , 5 00 3 , 3 00 200 3 , 5 00
14.( a ) Thec os toft heuni t st r ans f er r edou ti s$12 6, 000,or( 14, 000×$9) . ( b ) Th ec os to ft h eu ni t si ne nd i n gi n v ent o r yi s$9 , 0 00 ,o r[ ( 2 , 0 00×$ 3)+( 2 , 0 00 ×2 5% × $6) ] . 15.( a ) Ev ei si nc or r ec t .Ther epor ti sani nt er nal r epor tf ormanagement . ( b) Ther ear ef ours ec t i onsi napr oduc t i onc os tr epor t :( 1 )n umberofph y si c aluni t s ,( 2) equi v al entuni t sdet er mi nat i on,( 3)uni tc os t s ,and( 4)c os tr ec onc i l i at i ons chedul e. 16.The pr oduc t i on c os tr epor tp r o vi des t he bas i sf orev al uat i ng:( 1)t he pr oduc t i v i t y ofa depar t ment , ( 2 )whe t h eru ni ta ndt o t a lc os t sa r er e as on ab l e ,a nd( 3 )wh et h erc u r r en tp er f o r ma nc ei s mee t i ngpl annedobj ec t i v es . 17.Th ep erun i t c on v er s i onc os t i s$8. 75. [ Con v er s i onc os t s=$6, 0 00–$ 3, 2 00=$2, 800 .Equi v al en t u ni t sf o rc o nv e r s i onc os t sar e3 20( 8 00×4 0%) ;$ 2, 8 00÷3 20=$ 8. 7 5. ] 18.Op er at i onsc os t i ngi ss i mi l art opr oc es sc os t i ngi nt h ats t anda r di z edme t ho dsar eus edt o manuf act ur et he pr oduct .Att he same t i me,t he pr oductmay have some cust omi zed i ndi v i dual f eat ur est hatr equi r et heus eofaj obor derc os ts ys t em. 1 9 . I nd ec i d i n gwhi c hs y s t e mt ou se ,ac os t b en efi tt r a deo ffo cc u r s .I naj o bo r d ers y s t e m, det ai l edi nf or mat i onr el at edt ot hec os toft hepr oduc ti si nv ol v ed.Thec os tofi mpl ement i ng t hi ss ys t em i sof t ene xpens i v e.I napr oc es sc os ts y s t em,ana v er agec os toft hepr oduc twi l l s u ffic ea ndt h er e f o r et hec os tt oi mpl ementi sl es s .I ns ummar y ,t hec os tofi mpl ement i ng t hes y s t em mus tbeb al anc edag ai ns tt hebenefi t spr o vi dedf r om t headdi t i onal i nf or mat i on.
* 2 0 .Uni tt r a ns f e r r e do ut=b eg i nn i n gWI P+u ni t ss t a r t e da ndc o mp l e t e d=2 , 0 00+6 00=2 , 6 00 .
Brief Exercises Journalize BE4-1 Sargunaraj Manufacturing purchases $75,000 of raw materials on account, and it incurs entries for $80,000 of factory labour costs. Journalize the two transactions on March 31 assuming accumulatin the labour costs are not paid until April. g costs.
Journalize BE4-2 the assignment of materials and labour costs.
Data for Sargunaraj Manufacturing are given in BE4-1. Supporting records show that (a) the assembly department used $64,000 of raw materials and $45,000 of the factory labour, and (b) the finishing department used the remainder. Journalize the assignment of the costs to the processing departments on March 31.
Journalize BE4-3 Factory labour data for Sargunaraj Manufacturing are given in BE4-2. Manufacturing the overhead is assigned to departments on the basis of 200% of labour costs. Journalize the assignment assignment of overhead to the assembly and finishing departments. of overhead costs.
Calculate BE4-4 Bowyer Manufacturing Company has the following production data for selected months. physical Ending Work in Process units of Month Beginning Work in Units Units % Complete in Terms of production. Process Transferred Out Conversion Costs January
0
30,000
10,000
40%
March
0
40,000
8,000
75%
July
0
40,000
16,000
25%
Calculate the physical units for each month.
Calculate BE4-5 Using the data in BE4-4, calculate equivalent units of production for materials and equivalent conversion costs, assuming materials are entered at the beginning of the process. units of production.
Calculate BE4-6 unit costs of production. Assign BE4-7 costs to units transferred out and in process.
Calculate unit costs.
Prepare a cost reconciliatio n schedule.
Blue-Red Company started 9,000 units during the month of March. There were 2,000 units in the beginning work in process inventory and 3,000 units in the ending work in process inventory. Calculate units completed and transferred out during March. Hindi Company has the following production data for April: 40,000 units transferred out, and 5,000 units in ending work in process that are 100% complete for materials and 40% complete for conversion costs. If unit materials cost is $4 and unit conversion cost is $9, determine the costs to be assigned to the units transferred out and the units in ending work in process.
*BE4-8 On September 1, Delta Company had 30,000 units in process, which were 30% completed. Materials are added at the beginning of the process. During the month 170,000 units were started and 180,000 completed. Ending work in process was 50% complete. Calculate (a) the equivalent units of production for materials if weighted average were used and (b) the equivalent units of production for materials if FIFO were used.
BE4-9 Production costs chargeable to the Finishing Department in June at Yeun Company are
materials $15,000, labour $29,500, and overhead $18,000. Equivalent units of production are 20,000 for materials and 19,000 for conversion costs. Production records indicate that 18,000 units were transferred out, and 2,000 units in ending work in process were 60% complete in terms of conversion costs and 100% complete in terms of materials. Prepare a cost reconciliation schedule.
Calculate BE4-10 The smelting department of Massaro Manufacturing Company has the following equivalent production and cost data for November. units of production. Production: 2,000 units in beginning work in process that are 100% complete in terms of materials and 20% complete in terms of conversion costs; 8,000 units transferred out; and 5,000 units in ending work in process that are 100% complete in terms of materials and 40% complete in terms of conversion costs. Calculate the equivalent units of production for (a) materials and (b) conversion costs for the month of November.
Assign *BE4-11 costs to units transferred out and in
Mora Company has the following production data for March: no beginning work in process, 30,000 units started and completed, and 5,000 units in ending work in process that are 100% complete for materials and 40% complete for conversion costs. Mora uses the FIFO method to calculate equivalent units. If unit materials cost is $8 and unit conversion cost is $12, determine the costs to be assigned to the units transferred out and
process. the units in ending work in process. The total costs to be assigned are $664,000. Prepare a *BE4-12 Using the data in BE4-11, prepare the cost section of the production cost report for Mora partial Company. productio n cost report.
SOLUTI ONSTO BRI EFEXERCI SES BRI EFEXERCI SE41 Mar .31 Raw Mat er i al sI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Account sPayabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 , 0 00
75, 000
31 Fact or yLabour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WagesPayabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 , 0 00
80, 000
BRI EFEXERCI SE42 a) Mar . 31Wor ki nPr ocess —Asse mbl yDepar t ment . . . . . . Wor ki nPr ocess—Fi ni shi ngDepar t ment . . . . . . . Raw Mat er i al sI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . 75 , 0 00
64, 000 11, 000
b)Mar .31Wor ki nPr ocess—Asse mbl yDepar t ment . . . . . . . Wor ki nPr ocess—Fi ni shi ngDepar t ment . . . . . . . Fact or yLabour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 , 0 00
45, 000 35, 000
BRI EFEXERCI SE43 Mar .31 Wor ki nPr oces s—Asse mbl yDepar t ment . . . . . . ( $45, 000×200%) Wor ki nPr ocess—Fi ni shi ngDepar t ment . . . . . . .
90, 00 0 70, 000
( $35, 000×200%) Manuf act ur i ngOver head. . . . . . . . . . . . . . . . . . . . . . . . . . 1 60 , 0 00
BRI EFEXERCI SE44 Januar y
Mar ch
Jul y
Begi nni ngwor ki npr ocess St ar t edi nt opr oduct i on Tot aluni t s
– 4 0, 000 4 0, 000
– 4 8, 000 4 8, 000
– 5 6, 00 0 5 6, 00 0
T r a ns f e r r e dout Endi ngwor ki npr ocess Tot aluni t s
3 0, 000 1 0, 000 4 0, 000
4 0, 000 8, 000 4 8, 000
4 0, 00 0 1 6, 00 0 5 6, 00 0
BRI EFEXERCI SE45 Mat er i al s January Mar ch Jul y
Conver si onCost s 1 34 , 0 00( 30 , 0 00+4 , 00 0) 2 46 , 0 00( 40 , 0 00+6 , 00 0) 3 44 , 0 00( 40 , 0 00+4 , 00 0)
4 0, 00 0( 3 0, 00 0+1 0, 00 0) 4 8, 00 0( 4 0, 00 0+8 , 0 00 ) 5 6, 00 0( 4 0, 00 0+1 6, 00 0)
1
4 0% ×1 0, 0 00uni t s ,2 7 5% ×8 , 0 00uni t s ,3 25% ×16, 000uni t s
BRI EFEXERCI SE46 Uni t si nbe gi nni ngWI P+uni t sst a r t e d=uni t st r a nsf e r r edout+e ndi ng WI P 2, 000+9, 000=uni t st r ansf er r edout+3, 000 Uni t scompl e t e da ndt r a ns f e r r e dout=8, 0 00 BRI EFEXERCI SE47 Assi gnmentofCos t s
Equi val entUni t s
Uni tCost
Tr ansf er r edout
40, 000
$13. 00
Wor ki npr oc e ss , Mat er i al s Conver si oncost s Tot alcost s
5 , 00 0 2, 0001
$4. 00 $9. 00
1
40% ×5, 000uni t s
$520, 000
$ 20 , 0 00 18, 000
38, 000 $ 55 8, 0 00
* BRI EFEXERCI SE48 Equi v al entUni t s Physi cal Mat er i al s Uni t s Wei ght ed FI FO Av .( a) ( b) Uni t scompl e t e d&t r a ns f e r r e d 1 80 , 0 00 Uni t si ne ndi ngi nv ent or y 2 0, 000 Uni t saccount edf or 2 00 , 0 00 Compl et ebegi nni nguni t s: 30, 000×0%;0%* Uni t sc ompl e t e d&t r a ns f e r r e d Wor ki npr ocess,endi ng 20, 000×100% Tot alequi val entuni t s
N/ A 1 80 , 0 00
0 1 80 , 0 00
2 0, 0 00
2 0, 0 00
200, 000
200, 000
* Di r ec tma t e r i a l sar eadde da tt hebe gi nni ngoft hepr oc es s
BRI EFEXERCI SE49 Peruni tcostf ormat er i al s:$15, 000÷2 0, 000uni t s=$ 0. 75 Peruni tf orconver si on cost s:( $29, 500+ $18, 000)÷19, 000uni t s= $2. 50 T ot alperuni tcost :$0. 75+$2. 50=$3. 25 Cost saccount edf or T r a ns f e r r e dout Wor ki npr ocess,June30 Mat er i al s Conver si oncost s Tot alcost s 1
( 18, 000×$3. 25) ( 2, 000×$0. 75) 1 ( 1 , 2 0 0 ×$ 2. 5 0)
2 , 0 00×6 0% =Equi v al e ntuni t sf orc onv er s i onc os t s
$ 58 , 5 00 $1, 500 3, 000
4, 500 $ 63 , 0 00
BRI EFEXERCI SE410 a) Mat er i al s Uni t st r a ns f er r e dout Wor ki npr ocess,November30 Ma t e r i a l s( 5 , 0 00×1 00 %) Conver si oncost s( 5, 000×40%) Tot alequi val entuni t s
8, 000
b) Conver si on Cost s 8, 000
5, 000 13, 00 0
2, 000 10, 00 0
* BRI EFEXERCI SE411 Cost st oBe Assi gned Ass i gnmentofCost s T r a ns f e r r e dout St ar t edand compl et ed Wor ki npr ocess,3/ 31 Mat er i al s Conver si oncost s $ 66 4, 0 00 1
40% ×5, 000uni t s
Equi val ent Uni t Uni t s Cost 30, 000
$20. 00
5, 000 2, 0001
$8. 00 $ 12 . 0 0
T ot alCost s Assi gned $600, 000
$ 40 , 0 00 24, 000
64, 000 $ 66 4, 0 00
* BRI EFEXERCI SE412 Equi v al e ntUni t s Conver si on Mat er i al s Cost s Uni t saccount edf or Compl et edandt r ansf er r edout Wor ki npr ocess,Mar ch1 St ar t edandcompl et ed Wor ki npr ocess,Mar ch31 Tot aluni t s
030, 000 5, 000 35, 000
030, 00 0 2, 000 32, 00 0
MORACOMPANY ( Par t i a l )Pr oduc t i onCos tRe por t Fort heMont hEndedMar ch31 COSTS Conver si on Mat er i al s Cost s Uni tcos t s Cost si nMar ch( a) Equi v al entuni t s( b) Uni tcost s( a)÷( b) Cost st obeaccount edf or I npr ocess,Mar ch1 Cost si nMar ch T ot alcost s: Cost saccount edf or T r a ns f e r r e dout I npr ocess,Mar ch1 St ar t edandcompl et ed ( 30, 000uni t s×$20. 0 0) I npr ocess,Mar ch31 Mat er i al s( 5, 000×$8. 00) Conver si oncost s ( 2, 000×$12. 00) T ot alcost s:
$ 28 0, 0 001 3 5, 0 00 $8. 00
Tot al
$ 38 4, 0 002 $ 66 4, 0 00 3 2, 000 $ 12. 00 $2 0. 0 0 $ 0 6 64 , 0 00 $ 66 4, 0 00 $ 0 6 00, 0 00 $40, 000 24 , 0 00
64 , 0 00 $ 66 4, 0 00
1
3 5, 00 0e qui v al e ntuni t s×$ 8. 0 0pe runi t 3 2, 00 0e qui v al e ntuni t s×$ 12. 00peruni t
2
Do It! Review Compar D4-13 e joborder and process cost systems.
Instructions
Indicate whether each of the following statements is true or false. (a) Many hospitals use job-order costing for small, routine medical procedures. (b) A manufacturer of computer flash drives would use a job-order cost system. (c) A process cost system uses multiple work in process accounts. (d) A process cost system keeps track of costs on job cost sheets.
Assign and D4-14 Yussuff Company manufactures CH-21 through two processes: mixing and packaging. journalize In July, the following costs were incurred. manufacturin Mixing Packaging g costs. Raw materials used $10,000 $24,000 Factory labour costs Manufacturing overhead costs
8,000
36,000
12,000
54,000
Units completed at a cost of $21,000 in the mixing department are transferred to the packaging department. Units completed at a cost of $102,000 in the packaging department are transferred to Finished Goods. Instructions
Journalize the assignment of these costs to the two processes and the transfer of units as appropriate.
Calculate equivalent units.
D4-15 The assembly department has the following production and cost data for the current
month. Beginning Work in Process
Units Transferred Out
Ending Work in Process
–0–
20,000
16,000
Materials are entered at the beginning of the process. The ending work in process units are 70% complete as to conversion costs. Instructions
Calculate the equivalent units of production for (a) materials and (b) conversion costs. Prepare cost D4-16 In March, Lasso Manufacturing had the following unit production costs: materials $10 reconciliatio and conversion costs $8. On March 1, it had zero work in process. During March, Lasso n schedule. transferred out 22,000 units. As of March 31, 2,000 units that were 40% complete as to conversion costs and 100% complete as to materials were in ending work in process. Instructions
(a) Calculate the total units to be accounted for.
(b) Calculate the the equivalent units units of production. (c) Prepare a cost reconciliation reconciliation schedule, including the costs of materials transferred out and the costs of materials in process.
SOLUTI ONSTO DO I T!REVI EW DO I T!REVI EW 413 ( a )Fa l s e.Pr oc es sc os t i ngi snor ma l l yus edwhe nt he r ear eal a r ge numberofhomogeneouspr oduct sorser vi ces. ( b)Fa l s e.Sa me mea s( a ) ( c)Tr ue. ( d)Fal se.Apr ocesscostsyst em usesacostr epor tt odet er mi ne t ot alcostandperuni tcost . DO I T!REVI EW 414 Wor ki nPr ocess—Mi xi ngDepar t ment. . . . . . . . . . . . . . . . . . . . . . . . . . . . Wor ki nPr ocess—Packagi ngDe par t ment. . . . . . . . . . . . . . . . . . . . . . Raw Mat e r i al sI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 , 0 00
10, 000 24, 000
Wor ki nPr ocess—Mi xi ngDepar t ment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wor ki nPr ocess—Packagi ngDepar t ment . . . . . . . . . . . . . . . . . . . . . . . Fact or yLabour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 , 0 00
8, 000 36, 000
Wor ki nPr ocess—Mi xi ngDepar t ment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wor ki nPr ocess—Packagi ngDepar t ment . . . . . . . . . . . . . . . . . . . . . . . Manuf a ct ur i ngOver head. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 , 0 00
12, 000 54, 000
Wor ki nPr ocess—Packagi ngDepar t ment . . . . . . . . . . . . . . . . . . . . . . . Wor ki nPr ocess—Mi xi ngDepar t ment . . . . . . . . . . . . 21 , 0 00
21, 000
Fi ni shedGoodsI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102, 000 Wor ki nPr ocess—P — Packagi ngDepar t ment . . . . . 1 02 , 0 00
DO I T!REVI EW 415 Equi v al entUni t s b) Conver si on a) Mat er i al s Cost s Compl et edandt r ansf er r edout St ar t edandcompl et ed Wor ki npr ocess,endi ng Tot alequi val entuni t s 1 70% ×16, 000uni t s
20, 000 16, 000 36, 000
20, 000 1 1, 20 01 31, 200
DO I T!REVI EW 416 Physi cal Uni t s ( a)Uni t st obeac count e df or : Uni t si nbe gi nni ngi nv ent or y Uni t sst ar t edi nt opr oduct i on
( b)Uni t scompl e t e d&t r a ns f e r r e d Uni t si ne ndi ngi nv ent or y Equi v al e ntuni t sofpr od.
Equi v al entUni t s Mat er i al Conver si on
24, 00 0 24, 00 0 22, 00 0 2, 000 24, 00 0
22, 000 2, 000 24, 000
2 2, 0 00 8001 2 2, 8 00
1
40% ×2, 000uni t sDO I T!REVI EW 416( Cont i nued)
( c) LASSO MANUFACTURI NG ( Par t i a l )Pr oduc t i onCos tRe por t Fort heMont hEndedMar ch31 COSTS Conver si on Mat er i al s Cost s Uni tcos t s Cost si nMar ch( a) Equi v al entuni t s( b) Uni tcost s( a)÷( b) Cost st obeaccount edf or I npr ocess,Mar ch1 Cost si nMar ch T ot alcost s: Cost saccount edf or T r a ns f e r r e dout I npr ocess,Mar ch1 St ar t edandcompl et ed ( 22, 000uni t s×$18. 0 0) I npr ocess,Mar ch31 Mat er i al s( 2, 000×$10. 00) Conver si oncost s ( 8 00×$ 8. 0 0) T ot alcost s:
$ 24 0, 0 00 2 4, 0 00 $ 10 . 00
$ 18 2, 4 00 22, 800 $8. 00
Tot al $ 42 2, 4 00 $1 8. 0 0 $ 0 4 22 , 4 00 $ 42 2, 4 00 $ 0 3 96, 0 00
$20, 000 6, 400
26, 4 00 $ 42 2, 4 00
Exercises Understan E4-17 Wojtek Nakowski has prepared the following list of statements about process cost d process accounting. cost accounting 1. Process cost systems are used to apply costs to similar products that are mass. produced in a continuous fashion. 2. A process cost system is used when each finished unit is indistinguishable from another. 3. Companies that produce soft drinks, motion pictures, and computer chips would all use process cost accounting. 4. In a process cost system, costs are tracked by individual jobs. 5. Job-order costing and process costing track different manufacturing cost elements. 6. Both job-order costing and process costing account for direct materials, direct labour, and manufacturing overhead. 7. Costs flow through the accounts in the same basic way for both job-order costing and process costing. 8. In a process cost system, only one work in process account is used. 9. In a process cost system, costs are summarized in a job cost sheet. 10. In a process cost system, the unit cost is total manufacturing costs for the period divided by the units produced during the period. Instructions
Identify each statement as true or false. If false, indicate how to correct the statement.
Journalize E4-18 Fernando Company manufactures pizza sauce through two production departments: transactions. cooking and canning. In each process, materials and conversion costs are incurred evenly throughout the process. For the month of April, the work in process accounts show the following debits:
Cooking
Canning
Beginning work in process
$
0
$ 4,000
Materials
25,000
8,000
8,500
7,000
29,000
25,800
Labour Overhead Costs transferred in Instructions
Journalize the April transactions.
55,000
Answer E4-19 The ledger of Magdy Company has the following work in process account: questions on Work in Process—Painting costs and 5/1 Balance $3,570 5/31 Transferred out production. 5/31
Materials
6,460
5/31
Labour
2,400
5/31
Overhead
1,626
5/31
Balance
$?
$?
Production records show that there were 400 units in the beginning inventory, 30% complete, 1,200 units started, and 1,200 units transferred out. The beginning work in process had materials cost of $2,020 and conversion costs of $1,550.The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process. Instructions
Answer the following questions: (a) How many units are in process at May 31? (b) What is the unit materials cost for May? (c) What is the unit conversion cost for May? (d) What is the total cost of units transferred out in May? (e) What is the cost of the May 31 inventory?
Journalize E4-20 transactions for two processes.
Douglas Manufacturing Company has two production departments: cutting and assembly. July 1 inventories are Raw Materials $6,200, Work in Process—Cutting $4,900, Work in Process—Assembly $12,600, and Finished Goods $35,000. During July, the following transactions occurred: 1. Purchased $65,500 of raw materials on account. 2. Incurred $47,000 of factory labour (Credit Wages Payable). 3. Incurred $75,000 of manufacturing overhead; $55,000 was paid and the remainder
is unpaid. 4. Requisitioned $14,700 in materials for cutting and $11,900 in materials for assembly. 5. Used factory labour of $27,000 for cutting and $19,000 for assembly.
6. Applied overhead at the rate of $22 per machine hour. Machine hours were 1,700 in
cutting and 1,650 in assembly. 7. Transferred goods costing $70,700 from the cutting department to the assembly department. 8. Transferred goods costing $140,000 from Assembly to Finished Goods. 9. Sold goods costing $165,000 for $210,000 on account.
Instructions
Journalize the transactions. (Omit explanations.)
Calculate E4-21 In Lee Wen Company, materials are entered at the beginning of each process. Work in physical process inventories, with the percentage of work done on conversion costs, and production units and data for its sterilizing department in selected months during 2012 are as follows: equivalent Beginning Work in units of Process Ending Work in Process production. Month Units Conversion Cost Units Transferred Units Conversion Cost % Out % January
0
—
9,000
2,000
60
March
0
—
12,000
4,000
30
May
0
—
14,000
6,000
80
July
0
—
10,000
1,500
20
Instructions
(a) Calculate the physical units for January and May. (b) Calculate the equivalent units of production for (1) materials and (2) conversion costs for each month.
Determine E4-22 The cutting department of Groneman Manufacturing has the following production and cost equivalent data for July.
units and unit costs and assign costs.
Production
Costs
1.
Transferred out 9,000 units.
Beginning work in process
$
0
2.
Started 1,000 units that are 30% complete in terms of conversion costs and 100% complete in terms of materials at July 31.
Materials
45,000
Labour
16,200
Manufacturing overhead
17,280
Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process. Instructions
(a) Determine the equivalent units of production for (1) materials and (2) conversion costs. (b) Calculate unit costs and prepare a cost reconciliation schedule.
Prepare a E4-23 The sanding department of Hanninen Furniture Company has the following production and production manufacturing cost data for March 2012, the first month of operation. cost report. Production: 11,000 units finished and transferred out; 4,000 units started that are 100% complete in terms of materials and 25% complete in terms of conversion costs. Manufacturing costs: materials $48,000; labour $42,000; overhead $36,000. Instructions
Prepare a production cost report.
Determine *E4-24 equivalent units using FIFO, unit costs, and assignmen t of costs.
Montreal Manufacturing Inc. has the following cost and production data for the month of April. Beginning WIP
18,000 units
Started in production
100,000
Completed production
94,000
Ending WIP
24,000
The beginning inventory was 60% complete for conversion costs. The ending inventory was 40% complete for conversion costs. Materials are added at the beginning of process. Costs pertaining to the month of April are as follows: Beginning inventory costs are Materials
$ 65,000
Direct labour
20,000
Factory overhead
15,000
Costs incurred during April include Materials
$550,000
Direct labour
195,000
Factory overhead
380,000
Instructions
(a) Calculate the equivalent units of production for (1) materials and (2) conversion costs for the month of April using the first-in, first-out (FIFO) method. (b) Calculate the unit costs for the month. (c) Determine the costs to be assigned to the units transferred out and in ending work in process.
Determine E4-25 Toronto Manufacturing Inc. has the following cost and production data for the month of equivalent November. units, unit Beginning WIP 18,000 units costs, and Started in production 100,000 assignmen t of costs. Completed production 94,000 Ending WIP
24,000
The ending inventory was 40% complete for conversion costs. Materials are added at the beginning of process. Costs pertaining to the month of November are as follows: Beginning inventory costs are Materials
$ 65,000
Direct labour
20,000
Factory overhead
15,000
Costs incurred during November include Materials
$550,000
Direct labour
195,000
Factory overhead
380,000
Instructions
(a) Calculate equivalent units of production for materials and for conversion costs. (b) Determine the unit costs of production. (c) Show the assignment of costs to units transferred out and in process.
Calculate E4-26 The polishing department of Lacroix Manufacturing Company has the following production equivalent and manufacturing cost data for September. Materials are entered at the beginning of the units, unit process. costs, and costs Production: Beginning inventory of 2,500 units that are 100% complete in terms of assigned. materials and 30% complete in terms of conversion costs; units started during the period are 12,000; ending inventory of 3,000 units 10% complete in terms of conversion costs. Manufacturing costs: Beginning inventory costs, comprising $25,000 of materials and $28,080 of conversion costs; materials costs added in polishing during the month, $120,725; labour and overhead applied in polishing during the month, $100,020 and $300,240, respectively. Instructions
(a) Calculate the equivalent units of production for materials and conversion costs for the month of September. (b) Calculate the unit costs for materials and conversion costs for the month. (c) Determine the costs to be assigned to the units transferred out and in process.
Explain E4-27 the production cost report.
Wilbur Kumar has recently been promoted to production manager and has just started to receive various managerial reports. One of the reports he has received is the production cost report that you prepared. It showed that his department had 2,000 equivalent units in ending inventory. His department has had a history of not keeping enough inventory on hand to meet demand. He has come to you, very angry, and wants to know why you credited him with only 2,000 units when he knows he had at least twice that many on hand. Instructions
Explain to Wilbur why his production cost report showed only 2,000 equivalent units in ending inventory. Write an informal memo. Be kind and explain very clearly why he is mistaken.
Prepare a E4-28 The welding department of Balogh Manufacturing Company has the following production production and manufacturing cost data for February 2012. All materials are added at the beginning of cost report. the process. Manufacturing Costs
Production Data
Beginning work in process Materials
Beginning work in process $30,000
Conversion costs
4,175
Materials
24,000 units 1/10 complete
$ 34,175 146,400
Labour
32,780
Overhead
53,045
Units transferred out
54,000
Units started
60,000
Ending work in process
30,000 units 1/5 complete
Instructions
Prepare a production cost report for the welding department for the month of February.
Calculate E4-29 physical units and equivalent units of production.
Container Shipping, Inc. is contemplating the use of process costing to track the costs of its operations. The operation consists of three segments (departments): receiving, shipping, and delivery. Containers are received at Container Shipping's docks and sorted according to the ship they will be carried on. The containers are loaded onto a ship, which carries them to the appropriate port of destination. The containers are then off-loaded and delivered to the receiving company. Container Shipping wants to begin using process costing in the shipping department. Direct materials represent the fuel costs to run the ship, and “Containers in transit” represents work in process. Listed below is information about the shipping department's first month of activity. Containers in transit, April 1
0
Containers loaded
900
Containers in transit, April 30
400 (40% of direct materials and 30% of conversion costs)
Instructions
(a) Determine the physical flow of containers for the month. (b) Calculate the equivalent units for direct materials and conversion costs.
Determine E4-30 Hi-Tech Mortgage Company uses a process costing system to accumulate costs in its loan equivalent application department. When an application is completed, it is forwarded to the loan units, unit department for final processing. The following processing and cost data pertain to costs, and September: assignmen 1. Applications in process on Beginning work in t of costs. process:
2.
September 1,100
Direct materials
Applications started in
Conversion costs
September, 1,000 3.
4.
$1,000 4,000
September costs:
Completed applications during
Direct materials
$ 4,500
September, 900
Direct labour
12,000
Applications still in process at September 30 were 100% complete in terms of materials (forms) and 60% complete in terms of conversion costs.
Overhead
8,480
Materials are the forms used in the application process, and these costs are incurred at the beginning of the process. Conversion costs are incurred uniformly during the process. Instructions
(a) Determine the equivalent units of service (production) for materials and conversion costs. (b) Calculate the unit costs and prepare a cost reconciliation schedule. Calculate *E4-31 equivalent units, unit costs, and costs assigned.
Using the data in E4-31, assume Hi-Tech Mortgage Company uses the FIFO method. Also assume that the applications in process on September 1 were 100% complete in terms of materials (forms) and 40% complete in terms of conversion costs. Instructions
(a) Determine the equivalent units of service (production) for materials and conversion costs. (b) Calculate the unit costs and prepare a cost reconciliation schedule.
Determine *E4-32 equivalent units, unit costs, and assignmen t of costs.
The cutting department of Chan Manufacturing has the following production and cost data for August. Production
Costs
1. Started and completed 8,000 units.
Beginning work in process
$
2. Started 1,000 units that are 60% completed at August 31.
Materials
54,000
Labour
17,000
Manufacturing overhead
26,000
0
Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process. Chan Manufacturing uses the FIFO method to calculate equivalent units. Instructions
(a) Determine the equivalent units of production for (1) materials and (2) conversion costs. (b) Calculate unit costs and show the assignment of manufacturing costs to units transferred out and in work in process.
Calculate *E4-33 The smelting department of Amber Manufacturing Company has the following production equivalent and cost data for September. units, unit costs, and Production: Beginning work in process of 2,000 units that are 100% complete in terms of costs materials and 20% complete in terms of conversion costs; 8,000 units started and assigned. finished; and 1,000 units in ending work in process that are 100% complete in terms of materials and 40% complete in terms of conversion costs. Manufacturing costs: Work in process, September 1, $15,200; materials added, $63,000; labour and overhead, $143,000. Amber uses the FIFO method to calculate equivalent units. Instructions
(a) Calculate the equivalent units of production for (1) materials and (2) conversion costs for the month of September. (b) Calculate the unit costs for the month. (c) Determine the costs to be assigned to the units transferred out and in process.
Answer *E4-34 The ledger of Platt Company has the following work in process account: questions Work in Process—Painting on costs 3/1 Balance $3,080 3/31 Transferred out and production. 3/31 Materials 6,600 3/31
Labour
2,230
3/31
Overhead
1,280
3/31
Balance
$?
?
Production records show that there were 900 units in the beginning inventory, 30% complete, 1,200 units started, and 1,300 units transferred out. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process. Platt uses the FIFO method to calculate equivalent units. Instructions
Answer the following questions: (a) How many units are in process at March 31? (b) What is the unit materials cost for March? (c) What is the unit conversion cost for March? (d) What is the total cost of units started in February and completed in March? (e) What is the total cost of units started and finished in March? (f) What is the cost of the March 31 inventory?
Prepare a *E4-35 production cost report for a second process.
The welding department of Hirohama Manufacturing Company has the following production and manufacturing cost data for February 2012. All materials are added at the beginning of the process. Hirohama uses the FIFO method to calculate equivalent units. Manufacturing Costs
Production Data
Beginning work in process
$ 23,600
Costs transferred in
135,000
Beginning work in process
10,000 units, 10% complete
Materials
57,000
Units transferred out
65,000
Labour
35,100
Units transferred in
80,000
Overhead
68,400
Ending work in process
25,000, 20% complete
Instructions
Prepare a production cost report for the welding department for the month of February. Transferred-in costs are considered materials costs.
SOLUTI ONSTO EXERCI SES EXERCI SE417 1.Tr ue. 2.Tr ue. 3.Fal se.Compani es t hatpr oduce sof tdr i nks and comput erchi ps woul dal lusepr ocesscostaccount i ng,butcompani espr oduci ng mot i on pi ct ur es woul d use j obor dercost i ng si nce t he mot i on pi ct ur esar enothomogeneous.
obor der 4.Fal se.I n aj cos ts ys t e m,c os t sa r et r a ck edbyi ndi v i dua l j obs . hesa met hr e e 5 .Fa l s e .J obor de rc os t i nga ndpr oc e ssc os t i ngt r a c kt manuf act ur i ngcostel ement s. 6.Tr ue. 7.Tr ue. t i pl e wor 8.Fal se.I n a pr ocess cost s ys t em, mul ki n pr ocess e account sbydepar t mentar used. 9.Fal se.I n a pr ocess costsys t em,cost s ar e summar i z ed i na pr oduct i oncostr epor tf oreachdepar t ment . 1 0.Fa l s e.I napr oc es sc os ts ys t e m,t heuni tc os tofpr oduc t i oni st he hee qui v a l e nt sum oft wouni tcost s:mat er i al scost sdi vi ded byt uni t sofpr oduc t i on f orma t e r i a l s ,a nd c onv er s i on c os t sdi v i de d byt heequi v al e ntuni t sofpr oduct i onf orc onv er s i on.
EXERCI SE418 Apr i l30 Wor ki nPr ocess—Cooki ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 000 Wor ki nPr ocess—Canni ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 000 Raw Mat er i al sI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33, 00 0 30 Wor ki nPr ocess—Cooki ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wor ki nPr ocess—Canni ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fact or yLabour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 50 0
8, 500 7, 000
30 Wor ki nPr ocess—Cooki ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29, 000 Wor ki nPr ocess—Canni ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 800 Manuf act ur i ngOver head. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54, 80 0 30 Wor ki nPr ocess—Canni ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55, 000 Wor ki nPr ocess—Cooki ng. . . . . . . . . . . . . . . . . . . . . . . . 55, 00 0
EXERCI SE419 ( a) Wor ki npr ocess,May1 St ar t edi nt opr oduct i on Tot aluni t st obeaccount edf or Less:Tr ansf er r edout Wor ki npr ocess,May31
400 1, 200 1, 600 1, 200 400
( b)
Equi v al entUni t s Mat er i al s
Conver si onCost s
1, 200
1, 200
Uni t st r ans f er r e dout Wor ki npr ocess,May31 400×100% 400×40%
400 1, 600
160 1, 360
Di r ect Mat er i al s
Conver si onCost s
$ 2, 02 0 6, 460 $ 8, 48 0
$ 1, 5 50 4, 026 $ 5, 5 76
Wor ki npr ocess,May1 Cost sa dded T ot almat er i al scost $ 8, 4 80÷1 , 6 00=$ 5. 3 0 ( c) $5, 576÷1, 360=$4. 10
( d) T r a nsf e r r edout :1 , 2 00×( $ 5. 30+$ 4. 1 0)=$ 11 , 2 80 ; Peruni tcost=$5. 30+$4. 10i scal cul at edi n( b)and( c) ( e) Wor ki npr ocess,May31 Mat er i al s( 400×$5. 30) Conver si oncos t s( 160×$4. 10)
$2, 120 656 $2 , 7 76
EXERCI SE420 1. Raw Mat er i al sI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Account sPayabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65, 50 0
65, 500
2. Fact or yLabour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WagesPayabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47, 00 0
47, 000
3. Manuf act ur i ngOver head. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5, 000 Account sPayabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 0, 000
75, 000
4. Wor ki nPr ocess—Cut t i ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wor ki nPr ocess—Assembl y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Raw Mat e r i al sI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 6, 600
14, 700 11, 900
5. Wor ki nPr ocess—Cut t i ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wor ki nPr ocess—Assembl y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fact or yLabour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 6, 000
27, 000 19, 000
6 . Wor ki nPr oc ess —Cut t i ng( 1 , 7 00×$22 ) . . . . . . . . . . . . . . . . . Wor ki nPr oc es s—As se mbl y( 1 , 6 50×$ 22 ) . . . . . . . . . . . . . Manuf act ur i ngOver head. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3, 700
3 7, 40 0 3 6, 3 00
7. Wor ki nPr ocess—Assembl y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wor ki nPr ocess—Cut t i ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 0, 700
70, 700
8. Fi ni shedGoodsI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140, 000 Wor ki nPr ocess—Assembl y. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 40 , 0 00 9. CostofGoodsSol d. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165, 000
Fi ni shedGoodsI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 65 , 0 00 Account sRecei vabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210, 000 Sal es. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 10 , 0 00
EXERCI SE421 ( a) Uni t st obeaccount edf or Begi nni ngwor ki npr ocess St ar t edi nt opr oduct i on Tot aluni t s Uni t saccount edf or T r a ns f e r r e dout Endi ngwor ki npr ocess Tot aluni t s ( 1)
May
–0– 11 , 0 00 11 , 0 00
–0– 2 0, 000 2 0, 000
9, 000 2, 000 11 , 0 00
1 4, 000 6, 000 2 0, 000
Equi val entUni t sof Pr oduct i on Mat er i al s
( b) January Mar ch May Jul y
Jan.
( 2)
1 0, 2 00( 9, 0 00+1 , 2 001) 1 3, 2 00( 12 , 0 00+1 , 20 02) 1 8, 8 00( 14 , 0 00+4 , 80 03) 1 0, 3 00( 1 0, 0 00+3 004)
1 1, 0 00( 9, 0 00+2 , 0 00 ) 1 6, 0 00( 12 , 0 00+4 , 00 0) 2 0, 0 00( 14 , 0 00+6 , 00 0) 1 1, 5 00( 10 , 0 00+1 , 50 0)
1
2, 000×60%
2
4, 000×30%
Equi va l entUni t sof Pr oduct i on Conver si onCost s
3
6, 000×80%
4
1, 500×20%
EXERCI SE422 ( a) Uni t st r a nsf e r r edout Wor ki npr ocess,Jul y31 1, 000×100% 1, 000×30% Tot alequi val entuni t s
Mat er i al s
Conver si onCost s
9, 000
9, 000
1, 000 1 0, 00 0
300 9, 300
( b) Mat e r i a l s :$ 45 , 0 00÷1 0, 0 00=$ 4. 5 0 Conver si oncost s:( $16, 200+$17, 280)÷9, 300=$3. 60 Cost saccount edf or T r a ns f e r r edout( 9 , 0 00×$ 8. 1 0) Wor ki npr ocess,Jul y31 Mat er i al s( 1, 000×$4. 50) Conver si oncost s( 300×$3. 60) T ot alcost s ( T ot a lc os t s :$ 45 , 0 00+$ 16 , 2 00+$ 17 , 2 80=$ 78 , 4 80 )
EXERCI SE423
$ 72 , 9 00 $4 , 5 00 1, 080
5, 580 $ 78 , 4 80
HANNI NEN FURNI TURECOMPANY Sandi ngDepar t ment Pr oduct i onCostRepor t Fort heMont hEndedMar ch31,2012 Equi v al e ntUni t s Quant i t i es
Physi cal Uni t s
Uni t st obeaccount edf or Wor ki npr ocess,Mar ch1 St a r t e di nt opr oduc t i on Tot aluni t s
–0– 1 5, 0 00 1 5, 0 00
Uni t saccount edf or Tr ansf er r edout Wor ki npr ocess,Mar ch31 Tot aluni t s
11, 000 4, 000 15, 000
Cost s Uni tc os t s Cost si nMar ch Equi v al e ntuni t s Uni tcost s( a )÷( b) Cost st obeaccount edf or Wor ki npr ocess,Mar ch1 St a r t e di nt opr oduc t i on T ot alcost s
Mat er i al s
Conver si on Cost s
11, 000 4, 000 15, 000
Conver si on Mat er i al Cost s Tot al s 1 $ 48 , 0 00 $ 78 , 0 00 1 5, 0 00 1 2, 0 00 $ 3. 2 0 $ 6. 5 0
$ 12 6, 0 0 0 $ 9. 7 0 $ 0 12 6, 0 0 0 $ 12 6, 0 0 0
11, 000 1, 000 ( 4, 000×25%) 12, 000
CostReconci l i at i onSchedul e Cost saccount edf or T r a ns f e r r e dout( 1 1, 0 00×$ 9. 7 0) Wor ki npr ocess,Mar ch31 Ma t e r i a l s( 4 , 0 00×$ 3. 2 0) Conversi oncost s( 1, 000×$6. 50) T ot alcost s
1
( $ 42 , 0 00+$ 36 , 0 00 )
$ 10 6, 7 0 0 $ 12 , 8 00 6, 5 00 19 , 3 00 $ 12 6, 0 0 0
* EXERCI SE424
(a) Quantities
Equivalent Units Physical ConUnits Material version
Units to be accounted for Work in process be!innin! %tarted this period &otal units
"#$$$ "$$$$$ ""#$$$
Units accounted for Work in process be!innin! Materials ($') Conversion ($') %tarted and co,pleted Work .n process endin! Materials ("$$') Conversion ($') &otal equivalent units Current period costs
(b) Per equivalent unit cost
"#$$$ $ *$$$ +$$$
*$$$
*+$$ *$$$
+$$$ /$$ ""#$$$
"$$$$$
/+#$$
0""+1$$$ 011$$$$ 01*1$$$
0121$$
&otal costs3 Work in Process be!innin! Costs added durin! the ,onth
0 "$$$$$ ""+1$$$
&otal costs to be allocated
0"++1$$$
02"/
0""2/
* EXERCI SE424(Continued) (c) Costs for co,pleted !oods and endin! 4ork in process (%o,e a,ounts have been rounded2)
5e!innin! .nventory
&otal 0"$$$$$
Co,plete be!innin! W.P Materials ($ 7 0121$$) Conversion (*+$$ 7 02"/)
"$
%tarted and co,pleted Materials (*$$$ 7 0121$$) Conversion (*$$$ 7 02"/) Cost for units transferred out
###/$$
Endin! 4ork in process Materials (+$$$ 7 0121$$) Conversion (/$$ 7 02"/) &otal costs
Material 01$$$
Conversi on 061$$$
$ "$
"#$$$ 0"$661"$ 0#6$$$
*$/$$ 011$1"$
"/"/$ "6+$$$ 0"++1$$$ 0"1$$$
1//$ 0"$$$$
EXERCI SE425 ( a) Mat er i al s Uni t st r ans f er r e dout Wor ki npr ocess,endi ng 24, 000×100% 24, 000×40% Equi v al entuni t sofpr oduct i on
94, 000
94, 000
2 4, 000 1 18 , 0 00
( b) Cost sdur i ngt hemont h Equi v al entuni t s Uni tc os t s
Conver si on Cost s
9, 600 1 03 , 6 00
Mat er i al s
Conver si on Cost s
$ 61 5, 0 001 11 8, 0 00 $5 . 2 12
$ 61 0, 0 002 1 03 , 6 00 $ 5. 888
1
Somenumber shavebeenr ounded.
$1, 225, 0 00 $1 1. 10 2
$65, 000+$550, 000 $35, 000+$575, 000 ( c) Tr ansf er r edout( 94, 000×$11. 10) Wor ki npr ocess Mat er i al s( 24, 000×$5. 212) Conver si oncost s( 9, 600×$5. 888) T ot alcost s
Tot al
$1, 043, 400 $ 12 5, 1 00 5 6, 500
18 1, 6 00 $1, 225, 000
EXERCI SE426 ( a)
Physi cal Uni t s
Wor ki npr ocess,Sept ember1 Uni t sst ar t edi nt opr oduct i on
2, 500 12, 000 14, 500
Uni t st r ans f er r e dout Wor ki npr ocess,Sept ember30
11, 500 3, 000 14, 500 Equi v al entUni t s Mat er i al s Conver si onCost s
Uni t st r ans f er r e dout Wor ki npr ocess 3, 000×100% 3, 000×10%
11, 500 3, 000 14, 500
( b) Wor ki npr ocess,Sept ember1 Di r ectmat er i al s Conver si oncost s Cos t sadde dt opr oduc t i oni npol i s hi ng dur i ngSept ember Mat er i alcost s Conver si oncost s ( $ 10 0, 0 20+$ 30 0, 2 40 ) T ot a lc os t
1 1, 500
Mat er i al s
300 1 1, 800 Conver si on Cost s
$25, 00 0 $ 28 , 0 80
1 20 , 7 25 $ 14 5, 7 25
4 00 , 2 60 $ 42 8, 3 40
$145, 725÷14, 500=$10. 05( Mat er i alcost sperequi v al entuni t ) $ 42 8, 3 40÷1 1, 8 00=$ 36 . 3 0( Conv er s i onc os t spe re qui v al e ntuni t ) $ 10 . 0 5+$ 36 . 3 0=$ 46 . 3 5c os tpe runi t
( c) Cost sa ccount edf or T r a nsf e r r edout( 1 1, 5 00×$ 46 . 35 ) $ 53 3, 0 25 Wor ki npr ocess,Sept ember30 Mat er i al s( 3, 000×$10. 05) Conver si oncost s( 300×$36. 30) T ot alcost s $ 57 4, 0 65 Pr ov et ot alcost s: Begi nni ngI nvent or y Addeddur i ngt hemont h: Mat er i al s Conver si oncost s Tot al[ asi n( c)above]
$30, 150 10, 890
$ 53, 080 120, 725 400, 260 $574, 065
41, 040
EXERCI SE427 To: St anMal ey Fr om: St udent Re: Endi ngi nvent or y The r eason f orany conf usi on r el at ed t o yourdepar t ment ’ s endi ng i nv ent or yqua nt i t yst e msf r om t hef a ctt ha tt hequa nt i t yca nbeme as ur e d i nt wodi ffe r e ntwa y s,de pe ndi ngonwha tt hei nf or ma t i oni sus edf or . The endi ng i nvent or y quant i t y can be measur ed i n physi caluni t s or e qui v al e ntuni t s.Phy si caluni t sar eact ualuni t spr esentwi t houtr egar d t ot he st age ofcompl et i on.Yourdepar t ment ’ s endi ng i nvent or yi n physi caluni t si satl eastdoubl et heamountr epor t ed asequi val ent uni t s. Equi val ent uni t s measur et he wor k done on t he physi caluni t s, e xpr essed i nt e r msoff ul l yc ompl e t e d uni t s .The r e f or e ,i fy oure ndi ng i nvent or y cont ai ns 4, 000 uni t s whi ch ar e 50% compl et e, t hat i s e qui v al e ntt oha vi ng2 , 00 0c ompl e t e duni t sa tmont he nd.The r e f or e ,t he e ndi ngi nv e nt or ycoul dbee xpr e s se da sc ont ai ni ng4 , 0 00phy si ca luni t s or 2, 000 equi val ent uni t s. I hope t hi s cl ear s up any mi sunder st andi ngs. Pl ease cont act me i f you have any f ur t her quest i ons.
EXERCI SE428 BALOGHMANUFACTURI NG COMPANY Wel di ngDepar t ment Pr oduct i onCostRepor t Fort heMont hEndedFebr uar y29,2012 Equi v al e ntUni t s Quant i t i es
Physi cal Uni t s ( St ep1)
Uni t st obeaccount edf or Wor ki npr ocess,Febr uar y1 St a r t e di nt opr oduc t i on Tot aluni t s
2 4, 0 00 6 0, 0 00 8 4, 0 00
Uni t saccount edf or Tr ansf er r edout Wor ki npr ocess,Febr uar y29 Tot aluni t s
54, 000 30, 000 84, 000
Cost s Uni tc os t s( St e p3 ) Cost si nFebr uar y Equi v al e ntuni t s Uni tcost s( a )÷( b)
Mat er i al s
Conver si on Cost s
( St ep2)
54, 000 30, 000 84, 000
Mat er i al s ( a) $176, 400 ( b) 84 , 0 00 $ 2. 1 0
54, 000 6, 000 60, 000 Conver si on Cost s $ 90 , 0 00 60 , 0 00 $ 1. 5 0
Cost st obeaccount edf or Wor ki npr ocess,Febr uar y1 St a r t e di nt opr oduc t i on1 T ot alcost s 1 ( $146, 400+$32, 780+$53, 045)
Tot al $266, 400 $ 3. 6 0
$34, 175 2 32 , 2 25 $266, 400
CostReconci l i at i onSchedul e( St ep4) Cost saccount edf or T r a ns f e r r e dout( 5 4, 0 00×$ 3. 6 0) Wor ki npr ocess,Febr uar y29 Ma t e r i a l s( 3 0, 0 00×$2 . 1 0) Conver si oncost s( 6, 000×1. 50) T ot alcost s
$194, 400 $ 63 , 0 00 9 , 000
7 2, 0 00 $266, 400
EXERCI SE429 ( a) Cont ai ner si nt r ansi t ,Apr i l1 Cont ai ner sl oaded Tot alcont ai ner s Cont ai ner soffl oaded1 Cont ai ner si nt r ansi t ,Apr i l30 Tot alcont ai ner s
–0– 900 900 500 400 900
1
T ot alcont ai ner sl esscont ai ner si nt r ansi t
Equi v al entUni t s ( b) Physi cal Di r e ct Conver si on Uni t s Mat er i al s Cost s Cont ai ner soffl oaded 500 500 500 2 Cont ai ne r si nt r ans i t ,Apr i l30 400 160 1203 Tot alequi val entuni t s 660 620 2 400×4 0% =16 0 3 400×30% =12 0
EXERCI SE430 ( a)
Physi cal Uni t s Wor ki npr ocess,begi nni ng Uni t sst ar t edi nt opr oduct i on
100 1, 000 1, 100
Uni t st r a nsf e r r edout Wor ki npr ocess,endi ng
900 200 1, 100
Compl et edAppl i cat i onst r ansf er r edout Wor ki npr ocess,endi ng( 100%,60%) Equi val entuni t s
Mat er i al s 900 200 1, 100
Conver si on Cost s 900 120 1, 020
( b) Cost s Uni tc os t s( St e p3 ) Cost si nSept ember Equi v al e ntuni t s Uni tcost s( a )÷( b)
Mat er i al s ( a) $ 5, 5 00 ( b) 1, 1 00 $ 5. 0 0
Conver si on Cost s $ 24 , 4 80 1, 0 20 $ 24 . 0 0
Cost st obeaccount edf or Wor ki npr ocess,Sept ember1 St a r t e di nt opr oduc t i on T ot alcost s
Tot al $ 29 , 9 80 $ 29 . 0 0
$5, 00 0 2 4, 9 80 $ 29 , 9 80
CostReconci l i at i onSchedul e( St ep4) Cost saccount edf or T r a ns f e r r e dout( 9 00×$ 29 . 0 0) Wor ki npr ocess,Sept ember30 Ma t e r i a l s( 2 00×$5 . 0 0) Conver si oncost s( 120×$24. 00) T ot alcost s
$ 26 , 1 00 $1 , 0 00 2, 8 80
3 , 8 80 $ 29 , 9 80
* EXERCI SE431
( a) Appl i cat i onscompl et ed: Wor ki npr ocess,Sept ember1 St ar t edandcompl et ed Wor ki npr ocess,Sept ember30 Tot aluni t s
Equi v al entUni t s Physi cal Conver si on Uni t s Mat er i al s Cost s 100 800 200 1, 100
0 800 200 1, 000
601 800 120 980
1
40% compl et east oconver si oncost s,t husneeds60% mor et ocompl et et heuni t s, 60% ×100uni t s=60equi val entuni t s
* EXERCI SE431( Cont i nued) ( b) Mat er i al s:$4, 500÷1 , 000=$ 4. 50 Conv er s i onc os t s :( $ 12 , 0 00+$ 8, 4 80 )÷9 80=$ 20 . 8 98 Cost st obeaccount edf or : Wor ki npr ocess,Sept ember1 Cost sputi nt opr oduct i oni nSept ember Tot alcost s
$5, 000 24, 980 $29, 980
Cost saccount edf or : Appl i cat i onscompl et ed: Wor ki npr ocess,Sept ember1 $5, 000 Conver si oncost s( 60×$20. 898) 1, 254 $ 6, 254 St ar t edandcompl et ed( 800×$25. 398) 20, 318 Wor ki npr ocess,Sept ember30: Mat er i al s( 200×$4. 50) 900 Conver si oncost s( 120×$20. 898) 2, 508 Tot alcost s
$26, 572 3, 408 $29, 980
* EXERCI SE432 ( a)( 1) Mat er i al s: Pr oduct i onDat a
Mat er i al s Physi cal Added Uni t s Thi sPe r i od
Wor ki npr ocess,Aug1 St ar t edandcompl et ed Wor ki npr ocess,Aug31 T o t a l
–0– 8, 000 1, 000 9, 000
Equi val ent Uni t s
–0– 100% 100%
–0– 8, 000 1, 000 9, 000
( 2) Conver si onCost s: Pr oduct i onDat a
Physi cal Uni t s
Wor ki npr ocess,Aug1 St ar t edandcompl et ed Wor ki npr ocess,Aug31 T o t a l
–0– 8, 000 1, 000 9, 000
( b) Uni tcost sar e: Mat er i al s Conver si oncost s Tot al 1
% –0– 100 60
Equi val ent Uni t s –0– 8, 000 600 8, 600
$54, 000÷9, 000= $6. 00 1 $43, 000 ÷8, 600= 5. 00 $11. 00
$17, 000( Labour )+$26, 000( Manuf act ur i ngOver head)=$43, 000
Equi v al e Cost st oBe nt Uni t Assi gned Assi gnmentofCost s Uni t s Cost T ot a lmf g. T r a ns f e r r e dout c o s t s St ar t edandcompl et ed 8, 000 $11 Wor ki npr ocess,8/ 31 Mat er i al s Conver si oncost s $ 97 , 0 00
1, 000 600
$6 $5
T o t a l Cost s Assi gned $88, 000 6, 000 9, 000 3, 000 $9 7, 0 002
2
$ 54 , 0 00( Mat er i a l s)+$ 17, 0 00( La bour )+$ 26 , 0 00( Manuf a ct ur i ng Over head) .
* EXERCI SE433 ( a) ( 1)
Physi cal Mat er i al sAdded Equi val ent Uni t s Thi sPer i od Uni t s
Mat er i al s Wor ki npr ocess,beg. St ar t edandcompl et ed Wor ki npr ocess,end T o t a l ( 2) Conver si onCost s Wor ki npr ocess,beg. St ar t edandcompl et ed Wor ki npr ocess,end T o t a l
2, 000 8, 000 1, 000 14, 000
Q 0% 100% 100%
–0– 8, 000 1, 000 9, 000
Physi cal Uni t s
Wor kAdded Thi sPer i od
Equi val ent Uni t s
2, 000 8, 000 1, 000 14, 000
80%1 100% 40%
1, 600 8, 000 400 10, 000
1
20% compl et east oconver si oncost s,t husneeds80% mor et o c ompl e t et heuni t s ,
( b) Mat er i al s Conver si oncost s
( c)
Cost st oBe Assi gned
$63, 000÷9, 000= $7. 00 $143, 000÷10, 000= 14. 30 $ 21 . 3 0
Assi gnmentofCost s
Equi val ent Uni t Uni t s Cost
Tot almf g.cost s Tr ansf er r edout Wor ki npr ocess,beg Conver si oncost s 1 , 6 00 St ar t edandcompl et ed 8, 0 00 Tot alcost st r ansf er r edout Wor ki npr ocess,end Mat er i al s 1, 0 00 Conver si oncost s 400 $221, 200* T ot alcost s
T ot a lCos t s Assi gned
$ 15 , 2 00 $ 14 . 3 0 22, 880 $ 21 . 3 0
$ 7. 0 0 $ 14 . 3 0
$ 7, 0 00 5, 720
$38, 080 1 70 , 4 00 208, 480
12, 720 $221, 200
* Wor ki n pr ocess,Sept ember1,$15, 200 + mat er i al s cost s $63, 000 + l abourand over headcost s$143, 000=$221, 200.
* EXERCI SE434 ( a) Wor ki npr ocess,begi nni ng St ar t edi nt opr oduct i on Tot aluni t st obeac count edf or Less:Tr ansf er r edout Wor ki npr ocess,Mar ch31
900 1, 200 2, 100 1, 300 800
( b) Mat er i al s: Pr oduct i onDat a
Physi cal Mat er i al sAdded Equi val ent Uni t s Thi sPer i od Uni t s
Wor ki npr ocess,Mar ch1 St ar t edandcompl et ed Wor ki npr ocess,Mar ch31 T o t a l
900 400 800 2, 100
–0– 100% 100%
–0– 400 800 1, 200
Uni tc os t=$ 6, 6 00÷1 , 2 00=$ 5. 5 0. ( c) Conve r si oncost s: Pr oduct i onDat a
Physi cal Uni t s
Wor ki npr ocess,Mar ch1 St ar t edandcompl et ed Wor ki npr ocess,Mar ch31 T o t a l
900 400 800 2, 100
Wor kAdded Equi val ent Thi sPer i od Uni t s 70%1 100% 40%
630 400 320 1, 350
1
70% t ocompl et et heuni t s,70% ×900uni t s
Uni tc os t=$ 2, 2 30( La bour )+$ 1, 2 80( Ov er he ad)÷1 , 3 50=$ 2. 6 0 ( d) I npr ocess,Mar ch1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conver si oncost si nMar ch( 630×$2. 60) . . . . . . . . . . . . . . . . . . . . . . . . Tot alcostofuni t sst ar t edi nFeb&compl et edi nMar . . .
$3, 080 1, 638 $4, 718
( e) 400×( $5. 50+$2. 60)=$3, 240 ( f ) Mat er i al s( 8002×$5. 50) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conver si oncost s( 800×40% ×$2. 60) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tot alcostofwor ki npr ocess,Mar ch31. . . . . . . . . . . . . . . . . . . . . . . . . 2
st Wor ki npr ocessendi ngMar ch31
$4, 400 832 $5, 232
* EXERCI SE435 HI ROHAMAMANUFACTURI NG COMPANY Wel di ngDepar t ment Pr oduct i onCostRepor t Fort heMont hEndedFebr uar y29,2012
Equi v al e ntUni t s
Quant i t i es
Physi cal Uni t s ( St ep1)
Uni t st obeaccount edf or Wor ki npr ocess,Febr uar y1 Uni t st r ansf er r edi n Tot aluni t s
1 0, 0 00 8 0, 0 00 9 0, 0 00
Uni t saccount edf or Compl et edandt r ansf er r edout Wor ki n pr ocess,Febr uar y1 St ar t edandcompl et ed2 Tot alCompl et ed Wor ki npr ocess,Febr uar y29 Tot aluni t s
1 0, 0 00 5 5, 0 00 6 5, 0 00 2 5, 0 00 90, 000
Mat er i al s
( St ep2)
0 5 5, 0 00 5 5, 0 00 2 5, 0 00 8 0, 0 00
9, 0 001 5 5, 0 00 6 4, 0 00 5 , 0 003 6 9, 0 00
Mat er i al s
Conver si on Cost s
Cost s
Uni tc os t s( St e p3 ) Cost si nFebr uar y Equi v al e ntuni t s Uni tcost s( a )÷( b) Cost st obeaccount edf or Wor ki npr ocess,Febr uar y1 Cos t sT r a ns f e r r e di n St a r t e di nt opr oduc t i on T ot alc ost s
Conver si on Cost s
4 5 ( a) $192, 000 $103, 500 ( b) 8 0, 0 00 6 9, 0 00 $2 . 4 0 $1. 50
Tot al
$295, 500 $ 3. 9 0
$23, 600 1 35 , 0 00 1 60 , 5 00 $319, 100
* EXERCI SE435( Cont i nued) CostReconci l i at i onSchedul e Cost saccount edf or( St ep4) Tr ansf er r edout Wor ki npr ocess,Febr uar y1 Cost st ocompl et ebegi nni ng wor ki npr ocess Conver si oncost s ( 9 , 0 00×$ 1. 5 0) T ot alcost s Uni t sst ar t edandcompl et ed( 55, 000×$3. 90) T ot a lc os t st r a ns f e r r e dout Wor ki npr ocess,Febr uar y29 Ma t e r i a l s( 2 5, 0 00×$ 2. 4 0) Conversi oncost s( 5, 000×$1. 50) T ot alcost s
1
$ 23 , 6 00
1 3, 5 00 $37, 100 2 14 , 5 00 $251, 600 6 0, 0 00 7 , 5 00
10% compl et east oconver si oncost s;needs90% mor et ocompl et et heuni t s, 90% ×10, 000=9, 000equi val entuni t s 2 80, 000–25, 000=55, 000 3 25, 000×20% =5, 000 4 Cos tofma t e r i a l sa dde d$ 57 , 0 00pl uscos t st r a ns f e r r e di n$ 13 5, 0 00 . 5 Labour$35, 100pl usover head$68, 400.
6 7, 5 00 $319, 100
Problems: Set A Calculate P4-36A equivalen t units, unit costs, and costs assigned.
Toronto Timers Inc.'s costing system uses two cost categories: direct materials and conversion costs. Each of its products must go through the assembly department and the testing department. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Data for the assembly department for June 2012 are as follows: Production Data—Units Work in process, beginning inventory (60% complete in terms of conversion costs) Units started during June Work in process, ending inventory
850 units 1,300 units 450 units
Cost Data Work in process, beginning inventory costs Direct materials
382,500
Conversion costs
255,000
Direct materials costs added during June
2,500,000
Conversion costs added during June
2,800,000
Instructions
(a) Determine what unit cost can be calculated from the information provided for work in process beginning inventory. (b) Calculate how many units were completed and transferred out of the assembly department during June 2012.
Complete P4-37A Kasten Company manufactures bowling balls through two processes: moulding and the four packaging. In the moulding department, urethane, rubber, plastic, and other materials are steps moulded into bowling balls. In the packaging department, the balls are placed in cartons necessary and sent to the finished goods warehouse. All materials are entered at the beginning of to prepare each process. a Labour and manufacturing overhead are incurred uniformly throughout each process. productio Production and cost data for the moulding department during June 2012 are presented n cost below: report. Production Data June Beginning work in process units
0
Units started into production
30,000
Ending work in process units
4,000
Percent complete—ending inventory
80%
Cost Data Materials Labour
$298,000 60,400
Overhead
150,800
Total
$509,200
Instructions
(a) (b) (c) (d) (e)
Prepare a schedule showing physical units of production. Determine the equivalent units of production for materials and conversion costs. Calculate the unit costs of production. Determine the costs to be assigned to the units transferred and in process for June. Prepare a production cost report for the moulding department for the month of June.
Complete P4-38A Sweet Corporation is in the dairy manufacturing business. Products go through two the four production departments (A first, then B). Data from those departments for October 2012 steps are presented below. necessary Department A Department B to prepare Beginning work in process Beginning work in process a productio Number of units 1000 200 n cost % complete for materials 100% report. % complete for transferred-in % complete for conversion
100% 60%
30%
Total materials cost
$24,000
-0-
Total conversion cost
$30,000
$40,000
Total transferred-in costs
Number of units % complete for materials
15,000 Department A
Department B
Ending work in process
Ending work in process
600
300
100%
% complete for transferred-in % complete for conversion
100% 30%
40%
Sweet Corporation started 2,600 units of product during the month in department A. Costs incurred in department A for October 2012 totalled $64,000 for material and $132,000 for conversion. Additionally, department B incurred conversion costs in September 2012 of $600,000. Department B adds no materials to the product. Instructions
(a) Journalize the transfer of goods from department A to department B during October 2012. Sweet Corporation accounts for its costs using the weighted-average method. (b) Prepare a production cost report for department B for October 2012.
Journalize P4-39A Fiedel Company manufactures its product, Vitadrink, through two manufacturing transactions processes: mixing and packaging. All materials are entered at the beginning of each . process. On October 1, 2012, inventories consisted of $26,000 in Raw Materials, $0 in Work in Process—Mixing, $250,000 in Work in Process—Packaging, and $289,000 in Finished Goods. The beginning inventory for Packaging consisted of 10,000 units that were 50% complete in terms of conversion costs and fully complete in terms of materials. During October, 50,000 units were started into production in the mixing department and the following transactions were completed: 1. Purchased $300,000 of raw materials on account. 2. Issued raw materials for production: mixing $210,000 and packaging $45,000. 3. Incurred labour costs of $248,900. 4. Used factory labour: mixing $182,500 and packaging $66,400. 5. Incurred $790,000 of manufacturing overhead on account. 6. Applied manufacturing overhead on the basis of $22 per machine hour. Machine
hours were 28,000 in mixing and 6,000 in packaging. 7. Transferred 45,000 units from mixing to packaging at a cost of $979,000. 8. Transferred 53,000 units from packaging to Finished Goods at a cost of
$1,315,000. 9. Sold goods costing $1,604,000 for $2,500,000 on account.
Instructions
Journalize the October transactions.
Determine P4-40A The following is partial information for the month of March for Macmillan International assignment Inc., a two-department manufacturer that uses process costing: of costs. Work in process, beginning (67% converted) 15,000 units Costs of beginning work in process: Transferred in from department A
$ 9,500
Materials
0
Conversion
11,200
Units completed and transferred out during March Units transferred in during March from department A Work in process, ending (37.5% converted)
45,000
units
?
units
16,000
units
Materials costs added during March
$13,000
Conversion costs added during March
$63,000
Other information: 1. Material is introduced at the beginning in department A and more material is
added at the very end in department B. 2. Conversion costs are incurred evenly throughout both processes. 3. As the process in department A is completed, goods are immediately transferred
to department B; as goods are completed in department B, they are transferred to finished goods. 4. Unit costs of production in department A in March were Materials
$0.55
Conversion Total
0.40 $0.95
5. The company uses the weighted-average method.
Instructions
(a) Calculate the cost of goods transferred out of department B in March. (b) Calculate the cost of the March ending work in process inventory in department B. (adapted from CGA-Canada)
Assign P4-41A Cavalier Company has several processing departments. Costs charged to the assembly costs and department for November 2012 totalled $2,229,000 as follows: prepare a Work in process, November 1 productio Materials $69,000 n cost report. Conversion costs 48,150 $ 117,150 Materials added
1,548,000
Labour
225,920
Overhead
337,930
Production records show that 35,000 units were in beginning work in process, 30% complete in terms of conversion costs, 700,000 units were started into production, and 25,000 units were in ending work in process, 40% complete in terms of conversion costs. Materials are entered at the beginning of each process. Instructions
(a) Determine the equivalent units of production and the unit production costs for the assembly department. (b) Determine the assignment of costs to goods transferred out and in process. (c) Prepare a production cost report for the assembly department.
Determine P4-42A equivalent units and unit costs and assign costs.
Chen Company manufactures basketballs. Materials are added at the beginning of the production process and conversion costs are incurred uniformly. Production and cost data for the month of July 2012 are as follows: Production Data—Basketballs
Units
Work in process units, July 1
500
Units started into production
1,000
Work in process units, July 31
Percent Complete
600
60%
30%
Cost Data—Basketballs Work in process, July 1 Materials Conversion costs
$ 750 600
$1,350
Direct materials
2,400
Direct labour
1,580
Manufacturing overhead
1,060
Instructions
(a) Calculate the following: 1. The equivalent units of production for materials and conversion costs 2. The unit costs of production for materials and conversion costs 3. The assignment of costs to units transferred out and in process at the end of the
accounting period (b) Prepare a production cost report for the month of July for the basketballs. Calculate P4-43A Luther Processing Company uses a weighted-average process costing system and equivalent manufactures a single product—a premium rug shampoo and cleaner. The company has units and just completed the manufacturing activity for the month of October. A partially completed complete a production cost report for the month of October for the mixing department is shown production below. cost Equivalent Units report. Physical Conversion Quantities Units Materials Costs Units to be accounted for Work in process, October 1 (all materials, 70% conversion costs) Started into production
20,000 160,000
Equivalent Units Physical Units
Quantities Total units
Materials
Conversion Costs
130,000
?
?
50,000
?
?
180,000
?
?
180,000
Units accounted for Transferred out Work in process, October 31 (60% materials, 40% conversion costs) Total units accounted for Costs
Materials
Conversion Costs
Total
Costs in October
$240,000
$105,000
$345,000
Unit costs
Equivalent units Unit costs
?
?
$ ?
$ ?
$ ?
Costs to be accounted for Work in process, October 1
$ 30,000
Started into production
315,000
Total costs
$345,000
Cost Reconciliation Schedule Costs accounted for Transferred out
$ ?
Work in process, October 31 Materials
?
Conversion costs
?
Total costs
? $ ?
(a) Prepare a schedule that shows how the equivalent units were calculated so that you can complete the “Quantities: Units accounted for” equivalent units section of the production cost report, and calculate October unit costs. Determine P4-44A Alberta Instrument Company uses a process costing system. A unit of product passes assignmen through three departments—moulding, assembly and finishing—before it is completed. t of costs. The following activity took place in the finishing department during May: Work in process inventory, May 1 Transferred in from the assembly department
Units 1,900 14,000
Units
Transferred out to finished goods inventory
11,900
Raw material is added at the beginning of processing in the finishing department. The work in process inventory was 70% complete in terms of conversion costs on May 1 and 40% complete in terms of conversion costs on May 31. Alberta Instrument Company uses the weighted-average method of process costing. The equivalent units and current period costs per equivalent unit of production for each cost factor are as follows for the finishing department: Equivalent Units
Current Period Costs per Equivalent Unit
Transferred-in costs
15,400
$ 6.00
Raw materials
15,400
2.00
Conversion costs
13,300
4.00
Total
$12.00
Instructions
Calculate the following amounts: (a) The cost of units transferred to finished goods inventory during May (b) The cost of the finishing department's work in process inventory on May 31 (adapted from CMA Canada)
Determine *P4-45A Below is information about ABC Ltd., a chemical producer, for the month of June: equivalent Work in process, beginning inventory 25,000 units units using Transferred-in units—100% complete FIFO. Direct materials—0% complete Conversion costs—80% complete Transferred in during June
175,000 units
Completed and transferred out during June
170,000 units
Work in process, ending inventory
? units
Transferred-in units—100% complete Direct materials—0% complete Conversion costs—40% complete Instructions
(a) How many units are in ending work in process inventory? (b) Under FIFO, what are the equivalent units of production for the month of June for materials? (c) Under FIFO, what are the equivalent units of production for the month of June for conversion costs? Determine *P4-46A The Allbright BrickWorks, in Winnipeg, manufactures high-quality bricks used in assignmen residential and commercial construction. The firm is small but highly automated and t of costs typically produces about 300,000 bricks per month. A brick is created in a continuous using production operation. In the initial step, the raw material, a mixture of soils and water, is
FIFO.
forced into a brick mould moving along a conveyer belt. No other materials are actually required in the manufacture of a brick. Each brick takes about three days to complete. They spend the last 36 hours or so on the conveyer belt in an oven that removes moisture from the product. The conveyer belt speed is monitored and controlled by computer. The firm uses a process costing system based on actual costs in three cost pools—direct materials, direct labour, and factory overhead—to assign production costs to output. Cost and production data for October 2012 follow: Production Data
Beginning work in process inventory (100% complete in terms of direct materials; 60% complete in terms of direct labour; 36% complete in terms of factory overhead) Started this period
35,000 bricks 295,000 bricks
Ending work in process inventory (100% complete in terms of direct materials; 50% complete in terms of direct labour; 40% complete in terms of factory overhead)
30,000 bricks
Cost Data Materials
Direct Labour
Overhead
Beginning inventory
$ 1,330
$ 435
$ 852
Cost in October
12,200
15,000
18,180
Instructions
Determine the cost of bricks transferred to finished goods inventory and the cost of bricks in ending work in process inventory for October 2012. Assume the company uses the FIFO method. (adapted from CGA-Canada)
Determine *P4-47A equivalent units and unit cost, and prepare a production cost report using FIFO.
Jessica Company manufactures hockey pucks and soccer balls. For both products, materials are added at the beginning of the production process and conversion costs are incurred evenly. Jessica uses the FIFO method to calculate equivalent units. Production and cost data for the month of August are as follows: Production Data—Hockey pucks Work in process units, August 1 Units started into production Work in process units, August 31
Units 500
Percent Complete 70%
1,600 600
30%
Cost Data—Hockey pucks Work in process, August 1
$1,125
Direct materials
1,600
Direct labour
1,160
Manufacturing overhead
1,000
Production Data—Soccer balls Work in process units, August 1 Units started into production Work in process units, August 31
200
90%
2,000 150
60%
Cost Data—Soccer balls Work in process, August 1
$ 450
Direct materials
2,500
Direct labour
1,000
Manufacturing overhead
995
Instructions
(a) Calculate the following for both the hockey pucks and the soccer balls: 1. The equivalent units of production for materials and conversion costs 2. The unit costs of production for materials and conversion costs 3. The assignment of costs to units transferred out and to work in process at the
end of the accounting period (b) Prepare a production cost report for the month of August for the hockey pucks only.
SOLUTI ONSTO PROBLEMS—SETA PROBLEM 436A (a)
Unit cost for be!innin! 4ork in process inventory3 8irect ,aterial cost per unit3 &otal ,aterial cost 06#+1$$ ÷Equivalent units (#1$ 7 "$$') #1$ $450.00
Conversion cost per unit3 &otal conversion cost ÷Equivalent units (#1$ 7 $')
0+11$$$ 1"$ $500.00
&otal unit cost for be!innin! inventory
(b)
5e!innin! 4ork in process %tarted durin! the ,onth &otal units in production 9ess3 endin! 4ork in process Units co,pleted and transferred out
0/1$2$$
#1$ "6$$ +"1$ 1$ "*$$
PROBLEM 437A
( a) Physi caluni t s Uni t st obeaccount edf or Wor ki npr ocess,June1 St ar t edi nt opr oduct i on Tot aluni t s
0 3 0, 000 3 0, 000
Uni t saccount edf or T r a ns f e r r e dout Wor ki npr ocess,June30 Tot aluni t s
2 6, 000 4, 000 3 0, 000
( b)Equi val entuni t s
Uni t st r ans f er r e dout Wor ki npr ocess,June30 4, 000×100% 4, 000×80% Tot alequi val entuni t s
( c)
Mat er i al s
Conver si on Cost s
2 6, 000
2 6, 00 0
4, 000 3, 200 29, 200
30, 000
Uni tCost s Mat er i al s Conver si oncost s T ot aluni tcost
$ 9. 9 33 3( $ 29 8, 0 00÷3 0, 0 00 ) $7 . 2 32 9( ( $ 60 , 4 00+$ 15 0, 80 0)÷29 , 2 00 ) $ 17 . 1 66 2( $ 9. 9 33 3+$7 . 2 32 9)r ounde d
( d) Cost saccount edf or T r a ns f e r r edout( 2 6, 00 0×$ 17. 16 62 ) $ 44 6, 3 21 Wor ki npr ocess,June30 Mat er i al s( 4, 000×$9. 9333) Conver si oncos t s( 3, 200×$7. 2329) T ot alcost s $ 50 9, 2 00
$39, 733 23, 146
62, 879
PROBLEM 437A( Cont i nued) ( e)
KASTENCOMPANY Mol di ngDepar t ment Pr oduct i onCostRepor t Fort heMont hEndedJune30,2012 Equi v al e ntUni t s
Quant i t i es
Physi cal Uni t s ( St ep1)
Uni t st obeaccount edf or Wor ki npr ocess,June1 St a r t e di nt opr oduc t i on Tot aluni t s Uni t saccount edf or Tr ansf er r edout Wor ki npr ocess,June30 Tot aluni t s
Cost s Uni tc os t s( St e p3 ) Cost si nJune Equi v al e ntuni t s Uni tcost s( a )÷( b) Cost st obeaccount edf or Wor ki npr ocess,June1 St a r t e di nt opr oduc t i on T ot alcost s
Mat er i al s
Conver si on Cost s
( St ep2)
0 3 0, 0 00 3 0, 0 00 26, 000 4, 000 30, 000
26, 000 4, 000 30, 000
Mat er i al s ( a) $298, 000 ( b) 3 0, 0 00 $ 9. 9 33 3
26, 000 3, 200 ( 4, 000×80%) 29, 200 Conver si on Cost s $211, 200 2 9, 2 00 $ 7. 2 32 9
Tot al $509, 200 $17. 1662 $ 0 5 09 , 2 00 $509, 200
CostReconci l i at i onSchedul e( St ep4) Cost saccount edf or T r a ns f e r r e dout( 2 6, 0 00×$ 17 . 1 66 2) Wor ki npr ocess,June30 Ma t e r i a l s( 4 , 0 00×$ 9. 9 33 3) Conversi oncost s( 3, 200×$7. 2329) T ot alcost s
$446, 321 $ 39 , 7 33 2 3, 1 46
6 2, 8 79 $509, 200
(a) Calculation of equivalent units:8ept ;
5e!innin! W.P %tarted into production PROBLEM 438A Equivalent Units Co,pleted and transferred out Endin! 4ork in process Materials ("$$') Conversion (6$')
Physical Units "$$$ +$$ 6$$
Equivalent Units &rans Con.n Material
6$$$ $$
6$$$
6$$$
$$ 6$$
6$$
"#$ 6"#$
Calculation of equivalent units:8ept 5
5e!innin! W.P in 8ept 5 &ransferred in fro, 8ept ;
8epart,ent 5 Co,pleted and transferred out Endin! 4ork in process &ransferred in ("$$') Conversion ($')
Physical Units +$$ 6$$$ 6+$$
+/$$ 6$$
Equivalent Units &rans Con.n Material
+/$$
+/$$
6$$ 6+$$
6+$$
"+$ 6$+$
PROBLEM 438A( Cont i nued)
Per Unit Costs3 8ept ; 5e!innin! W.P Costs added in the ,onth Equivalent units Cost per equiv2 unit
Per Unit Costs3 8ept 5 5e!innin! W.P Costs added in the ,onth
&otal
0*126#*#
&otal
Equivalent units Cost per equiv2 unit "
&rans .n
Con
Material 0+$$$ $$$ 0##$$$ 6$$ 0+2
Con&rans Material
0+#2/+#6 0*62$$*#
0+""2/+$1
+/$$ transferred in 7 0*126#*#=unit > 0+"#+1
Wor ki nPr ocess—Depar t mentB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218, 625 Wor ki nPr ocess—Depar t mentA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 18 , 6 25
PROBLEM 438A( Cont i nued) ( b)
SWEETCORPORATI ON Depar t mentB Pr oduct i onCostRepor t Fort heMont hEndedOct ober31,2012 Equi v al e ntUni t s
Quant i t i es
Physi cal Uni t s ( St ep1)
Uni t st obeaccount edf or Wor ki npr ocess,begi nni ng T r a nsf er r edi n Tot aluni t s Uni t saccount edf or Tr ansf er r edout Wor ki npr ocess,endi ng Tot aluni t s
Cost s Uni tc os t s( St e p3 ) T ot alcost s Equi v al e ntuni t s Uni tcost s( a )÷( b) Cost st obeaccount edf or Wor ki npr ocess,begi nni ng T r a nsf er r edi n St a r t e di nt opr oduc t i on T ot alcost s CostReconci l i at i onSchedul e( St ep4)
T r a n s f e r r edi n
Conver si on Cost s
( St ep2)
200 3, 000 3, 200 2, 900 300 3, 200
2, 900 300 3, 200
2, 900 120 ( 300×40%) 3, 020
T r a n s f e r r edi n
Conver si on Cost s
( a) $233, 625 ( b) 3 , 2 00 $73. 0078
$640, 000 3 , 0 20 $211. 9205
Tot al $873, 625 $284. 9283 $55 , 0 00 2 18 , 6 25 6 00 , 0 00 $873, 625
Cost saccount edf or T r a ns f e r r e dout( 2 , 9 00×$ 30 4. 6 15 8) Wor ki npr ocess,endi ng T r a ns f e r r e di n( 3 00×$9 2. 6 95 3) Conver si oncost s( 120×$211. 9205) T ot alcost s
$826, 292
$21, 902. 3 4 25, 430. 4 6
4 7, 3 33 $873, 625
PROBLEM 439A 1. Raw Mat er i al sI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Account sPayabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 00 , 0 00
300, 000
2. Wor ki nPr ocess—Mi xi ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wor ki nPr ocess—Packagi ng. . . . . . . . . . . . . . . . . . . . . . . . . . Raw Mat er i al sI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . 2 55 , 0 00
210, 000 45, 000
3. Fact or yLabour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WagesPayabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 48 , 9 00
248, 900
4. Wor ki nPr ocess—Mi xi ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wor ki nPr ocess—Packagi ng. . . . . . . . . . . . . . . . . . . . . . . . . . Fact or yLabour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 48 , 9 00
182, 500 66, 400
5. Manuf act ur i ngOver head. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Account sPayabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 90 , 0 00
790, 000
6. Wor ki nPr ocess—Mi xi ng( 28, 000×$22) . . . . . . . . . Wor ki nPr ocess—Packagi ng. . . . . . . . . . . . . . . . . . . . . . . . . . ( 6 , 0 00×$ 22 ) Manuf act ur i ngOver head. . . . . . . . . . . . . . . . . . . . . . . . . . 7 48 , 0 00
616, 000 132, 000
7. Wor ki nPr ocess—Packagi ng. . . . . . . . . . . . . . . . . . . . . . . . . . Wor ki nPr ocess—Mi xi ng. . . . . . . . . . . . . . . . . . . . . . . . . 9 79 , 0 00
979, 000
8. Fi ni shedGoodsI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 315, 000 Wor ki nPr ocess—Packagi ng. . . . . . . . . . . . . . . . . . . 1, 315, 000 9. Account sRecei vabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 500, 000
Sal es. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 500, 000 CostofGoodsSol d. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 604, 000 Fi ni shedGoodsI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . 1, 604, 000
PROBLEM 440A
Calculation of cost per equivalent unit
5e!innin! W.P in 8ept 5 &ransferred in fro, 8ept ;
8epart,ent 5 Co,pleted and transferred out Endin! 4ork in process &ransferred in ("$$') Materials ($') " Conversion (6*21')
Physical Units "1$$$ $$$ "$$$
1$$$ "$$$
Equivalent Units &rans Con.n Material version
1$$$
1$$$ 1$$$
"$$$ $ "$$$
"$$$
1$$$
$$$ 1"$$$
"
;dditional Material is added at the end in 8epart,ent 52
Per Unit Costs3 5e!innin! W.P Costs added in March Equivalent units Cost per equiv2 unit "
&otal
0+2"
$$$ transferred in 7 0$2/1=unit > 06*$$
Con&rans Material version .n 0 /1$$ 0""+$$ 06*$$ 1 0 "6$$$ 06$$$ 016+$$ 0 "6$$$ 0*+$$ "$$$ 1$$$ 1"$$$ 0$2#*+ 0$2+#/ 0"211
PROBLEM 4-40A (Continued)
(a) &otal Cost of units transferred out3 Units transferred out+ Cost per unit
&rans .n
Material
Conversion
1$$$ 0+2" 0""**+$
2
Transerred to !inis"ed #oods
&rans &otal (b)
Cost of endin! W.P &ransferred in ("$$') Material ($') Conversion (6*21') Cost per unit
.n
ConMaterial
version
"$$$ $
0++#+
0$2#*+ 0"6/1+
0$2+#/ 0 $
$$$ 0"211 0#*6$
PROBLEM 441A
( a) Physi cal Uni t s Uni t st obeaccount edf or Wor ki npr ocess,November1 St ar t edi nt opr oduct i on Tot aluni t s
3 5, 0 00 7 00 , 0 00 7 35 , 0 00
Uni t saccount edf or T r a ns f e r r e dout Wor ki npr ocess,November30 Tot aluni t s
7 10 , 0 00 2 5, 0 00 735, 000
Tot al
Equi v al e ntUni t s Conver si on Mat er i al s Cost s
7 10 , 0 00 2 5, 0 00 735, 000
7 10 , 0 00 1 0, 0 00 720, 000
Mat er i al s
Conver si on Cost s
$ 6 9, 0 00 1, 548, 000 $1, 617, 000
$48, 150 56 3, 8 501 6 12 , 0 00
7 35 , 0 00
7 20 , 0 00
$ 2 . 2 0
$0. 85
Costperuni t
Begi nni ngwor ki npr ocess Addeddur i ngmont h Equi v al entuni t s Peruni tcost
$3. 05
1
$225, 920+$337, 930=$563, 850
( b) Cost saccount edf or T r ansf e r r e dout( 7 10 , 0 00×$ 3. 0 5) Wor ki npr ocess,November30 Mat er i al s( 25, 000×$2. 20) Conver si oncost s( 10, 000×$0. 85)
$2, 165, 500 $ 55 , 0 00 8, 500
63 , 5 00
Tot alcost s
$2, 229, 000
PROBLEM 441A( Cont i nued) ( c)
CAVALI ERCOMPANY Assembl yDepar t ment Pr oduct i onCostRepor t Fort heMont hEndedNovember30, 2012 Equi v al e ntUni t s
Quant i t i es
Physi cal Uni t s ( St ep1)
Uni t st obeaccount edf or Wor ki npr ocess,November1 St a r t e di nt opr oduc t i on Tot aluni t s Uni t saccount edf or Tr ansf er r edout Wor ki npr ocess,November30 Tot aluni t s
Cost s Uni tc os t s( St e p3 ) Cost si nNovember Equi v al e ntuni t s Uni tcost s( a )÷( b) Cost st obeaccount edf or Wor ki npr ocess,November1 St a r t e di nt opr oduc t i on T ot alcost s CostReconci l i at i onSchedul e( St ep4)
Mat er i al s
Conver si on Cost s
( St ep2)
3 5, 0 00 7 00 , 0 00 7 35 , 0 00 710, 000 25, 000 735, 000
710, 000 25, 000 735, 000
Mat er i al s ( a)$ 1, 6 17 , 0 00 ( b) 7 35 , 0 00 $ 2. 20
710, 000 10, 000 ( 25, 000×40%) 720, 000 Conver si on Cost s $612, 000 7 20 , 0 00 $ 0. 8 5
Tot al $ 2, 2 29 , 0 00 $ 3. 05 $ 117, 150 2 , 1 11 , 8 50 $ 2, 2 29 , 0 00
Cost saccount edf or T r a ns f e r r e dout( 7 10 , 0 00×$ 3. 0 5) Wor ki npr ocess,November30 Ma t e r i a l s( 2 5, 0 00×$ 2. 2 0) Conver si oncost s ( 1 0, 0 00×$ 0. 8 5) T ot alcost s
$ 2, 1 65 , 5 00 $ 55 , 0 00 8 , 500
6 3, 5 00 $ 2, 2 29 , 0 00
PROBLEM 442A ( a) ( 1)
Equi v al e ntUni t s Physi cal Conver si on Uni t s Mat er i al s Cost s
Uni t st obeaccount edf or Wor ki npr ocess,Jul y1 St ar t edi nt opr oduct i on Tot aluni t s
500 1, 000 1, 500
Uni t saccount edf or Tr ansf er r edout Wor ki npr oc es s ,J ul y3 1 Tot aluni t s
900 600 1, 500
( 2)
900 600 1, 500
900 180 1, 080
Mat er i al s
Conver si on Cost s
$ 750 2, 400 $3, 150
$ 600 2, 6401 $3, 240
Equi v al entuni t s
1, 500
1, 080
Pe runi tc os t
$2. 10
$3. 00
Costperuni t Begi nni ngwor ki npr ocess Addeddur i ngmont h
1
$ 1, 5 80( Di r e ctLa bour )+$1 , 0 60( Ma nuf a ct ur i ngOv er he ad)
( 3) Cost saccount edf or T r a ns f e r r edout( 9 00×( $ 2. 1 0+3 . 0 0) Wor ki npr ocess,Jul y31 Mat er i al s( 600×$2. 10) Conver si oncost s( 180×$3. 00) T ot alcost s
$ 4, 5 90 $ 1, 2 60 540
1, 800 $ 6, 3 90
PROBLEM 442A( Cont i nued) ( b)
CHENCOMPANY Basket bal lDepar t ment Pr oduct i onCostRepor t Fort heMont hEndedJul y31,2012 Equi v al e ntUni t s
Quant i t i es
Physi cal Uni t s
Mat er i al s
( St ep1) Uni t st obeaccount edf or Wor ki npr ocess,Jul y1 St a r t e di nt opr oduc t i on Tot aluni t s Uni t saccount edf or Tr ansf er r edout Wor ki npr ocess,Jul y31 Tot aluni t s
Cost s Uni tc os t s( St e p3 ) Cos t si nJ ul y Equi v al e ntuni t s Uni tcost s( a )÷( b) Cost st obeaccount edf or Wor ki npr ocess,Jul y1 St a r t e di nt opr oduc t i on T ot alcost s CostReconci l i at i onSchedul e( St ep4)
Conver si on Cost s
( St ep2)
500 1 , 0 00 1 , 5 00 900 600 1, 500
900 600 1, 500
Mat er i al s ( a) $ 3, 1 50 ( b) 1 , 5 00 $ 2. 1 0
900 180 1, 080 Conver si on Cost s $ 3, 2 40 1, 080 $3. 00
Tot al $ 6, 3 90 $ 5. 1 0
$ 1, 3 50 5 , 0 40 $ 6, 3 90
Cost saccount edf or T r a ns f e r r e dout( 9 00×$ 5. 1 0) Wor ki npr ocess,Jul y31 Ma t e r i a l s( 6 00×$ 2. 1 0) Conver si oncost s( 180×$3. 00) T ot alcost s
$ 4, 5 90 $ 1, 2 60 540
1 , 8 00 $ 6, 3 90
PROBLEM 443A
( a) Comput at i onofequi val entuni t s: Equi v al entUni t s Physi cal Conver si on Uni t s Mat er i al s Cost s Uni t saccount edf or T r a ns f e r r e dout Wor ki npr ocess,Oct ober31 Ma t e r i a l s( 5 0, 0 00×6 0%) Conver si oncost s ( 50, 000×40%) Tot aluni t s
1 30 , 0 00 50 , 0 00
1 30 , 0 00
1 30 , 0 00
30 , 0 00 180, 000
160, 000
2 0, 0 00 150, 000
Comput at i onofOct oberuni tcost s Mat er i al s:$2 40, 000÷160, 000equi val entuni t s= $1 . 50 Conver si oncost :$105, 000÷150, 000equi val entuni t s= . 70 Tot aluni tcost ,Oct ober $2. 20
( b) CostReconci l i at i onSchedul e Tr ansf er r edout( 130, 000×$2. 20) Wor ki npr ocess,Oct ober31 Mat er i al s( 30, 000×$1. 50) Conver si oncost s( 20, 000×$0. 70) Tot alcost s
$286, 000 $45, 000 14, 000
59, 000 $345, 000
PROBLEM 444A
(a) Cost of units transferred to finished !oods3 Units transferred out &otal cost per unit
""/$ $
0"+2$$ 0"+#$$
(b) Physical Units Units to be accounted for Work in process May " %tarted into production &otal units Units accounted for &ransferred out Work in process May 6" Material ("$$') Conversion ($') &otal units
Cost of W.P May 6" &ransferred in ("$$') Material ("$$') Conversion ($')
&otal $$$
Equivalent Units Conversio Materials n Costs
"/$$ "$$$ "1/$$ ""/$$ $$$
""/$$
""/$$
$$$ "1/$$
&rans .n
"1/$$
"$$ "61$$
ConMaterial version
$$$ $$$ "$$
Cost per unit 06#$$
02$$
0+2$$
02$$
0+$$$
0#$$$
0$$
* PROBLEM 445A (a)
Units in be!innin! 4ork in process Plus3 transferred in &otal units in production 9ess3 co,pleted and transferred out Units in endin! 4ork in process
+1$$$ "*1$$$ +$$$$$ "*$$$$ 6$$$$
(b) and (c) Physical Units
Quantities
Equivalent Units Conversi &rans Material on .n s Costs
Units to be accounted for Work in process be!innin! &ransferred into production &otal units
+1$$$ "*1$$$ +$$$$$
Units accounted for Work in process be!innin! &ransferred in and co,pleted Work .n process endin!
+1$$$ +1$$$ +1$$$ 1$$$ "1$$$ "1$$$ "1$$$ 6$$$$ 6$$$$ $ "1$$$ "+$$$
&otal units
+$$$$$ "*1$$$ "*$$$$ "+$$$ ( c) (b)
* PROBLEM 446A Equivalent Units Quantities
Physical Material Units
9abour
?verhead
Units to be accounted for Work in process be!innin! %tarted this period &otal units
61$$$ +/1$$$ 66$$$$
Units accounted for Work in process be!innin!
61$$$
Materials ($')
$
9abour ($'")
"$$$
?verhead ('+) %tarted and co,pleted Work .n process endin! Materials ("$$') 9abour (1$')
++$$ +1$$$6 +1$$$ +1$$$ +1$$$ 6$$$$ 6$$$$ "1$$$
?verhead ($')
"+$$$
&otal equivalent units (,)
66$$$$ +/1$$$ , +/$$$ , +//$$ ,
Current period costs (n)
016#$ 0"++$$ n 0"1$$$ n 0"#"#$ n
Per equivalent unit cost
0$2"16" 0$2$" 0$2$1"$ 0$2$$*
@(n) ÷(,)A "
9abour $' co,plete $' to be co,pleted ?verhead 6' co,plete ' to be co,pleted 6 66$ $$$ 61$$$ (be!innin! W.P) 6$$$$ (endin! W.P) +
PB?59EM -; (Continued) Costs for co,pleted !oods and endin! 4ork in process Material 9abour &otal 5e!innin! .nventory
0+"*
Co,plete be!innin! W.P Materials ($ 7 0$2$") 9abour ("$$$ 7 0$2$1"$) ?verhead (++$$ 7 0$2$$*)
+$*6
%tarted and co,pleted Materials (+1$$$ 7 0$2$") 9abour (+1$$$ 7 0$2$1"$) ?verhead (+1$$$ 7 0$2$$*) Cost for units transferred out
$1*+
0"66$
061
Conver sion 0#1+
$ *" "61/
"$/*" "61"1 "$# 01++ 0"+6$" 0" 0"#+/*
Endin! 4ork in process +*61 Materials (6$$$$ 7 0$2$") "++ 9abour ("1$$$ 7 0$2$1"$) *1 ?verhead ("+$$$ 7 0$2$$*) *+# &otal costs 0*//* 0"616 0"1+/ 0"/$+1
* PROBLEM 447A (a) ;2 ?CDE PUCD% Physical Units
Quantities Units to be accounted for Work in process be!innin! %tarted into production &otal units
1$$ "$$ +"$$
Units accounted for Work in process be!innin! %tarted and co,pleted Work .n process endin! &otal units (")
Equivalent units: Materials
Work in process ;u! " %tarted and co,pleted Work in process ;u! 6" &otal Equivalent units: Conversion
Work in process ;u! " %tarted and co,pleted Work in process ;u! 6" &otal "
"$$' Materials added $' to be added
1$$ "$$$ $$ +"$$
Physical Units 1$$ "$$$ $$ +"$$
Physical Units 1$$ "$$$ $$ +"$$ +
Materials ;dded &his Period $'" "$$' "$$'
Conversion ;dded &his Period 6$'+ "$$' 6$'
Equivalent Units $ "$$$ $$ "$$
Equivalent Units "1$ "$$$ "#$ "66$
*$' co,pleted 6$' to be added
* PROBLEM 447A( Cont i nued) (+) Unit costs
Costs in ;u!ust (a) Equivalent units (b) Unit costs @(a) F (b)A 6
Materials
Conversion
0"$$ "$$ 0"2$$
0+"$ 6 "66$ 0"2+
8irect 9abour 0""$ G Manufacturin! ?verhead 0"$$$
(6) Costs for co,pleted !oods and endin! 4ork in process
5e!innin! W.P Co,plete be!innin! W.P Materials ($ 7 0"2$$) Conversion ("1$ 7 0"2+) %tarted and co,pleted Materials ("$$$ 7 0"2$$) Conversion ("$$$ 7 0"2+) Endin! W.P Materials ($$ 7 0"2$$) Conversion ("#$ 7 0"2+) &otal costs
&otal
5e! W.P
0""+1
0""+1
Materi als
Conver sion
+ 0+ ++ 0"$$$ "+ #/+ $$ 0##1
0""+1
0"$$
+/+ 0+"$
* PROBLEM 447A( Cont i nued) 52 %?CCEB 5;99% Quantities
Physical Units
Units to be accounted for Work in process be!innin! %tarted into production &otal units
+$$ +$$$ ++$$
Units accounted for Work in process be!innin! %tarted and co,pleted Work .n process endin! &otal units (") Equivalent units: Materials
Work in process ;u! " %tarted and co,pleted Work in process ;u! 6" &otal Equivalent units: Conversion
Work in process ;u! " %tarted and co,pleted Work in process ;u! 6" &otal
Physical Units +$$ "#1$ "1$ ++$$
Physical Units +$$ "#1$ "1$ ++$$
+$$ "#1$ "1$ ++$$ Materials ;dded &his Period $' "$$' "$$'
Conversion ;dded &his Period "$'1 "$$' $'
Equivalent Units $ "#1$ "1$ +$$$
Equivalent Units +$ "#1$ /$ "/$
1
"$$' co,pleted as to ,aterials $' to be added be added
/$' co,pleted "$' to
* PROBLEM 447A( Cont i nued) (+) Unit costs
Costs in ;u!ust (a) Equivalent units (b) Unit costs @(a) F (b)A
Materials
Conversion
0+1$$ +$$$ 0"2+1$
0"//1 "/$ 0"2$"#
8irect 9abour 0"$$$ G Manufacturin! ?verhead 0//1
(6) Costs for co,pleted !oods and endin! 4ork in process &otal 5e!innin! 4ork in process Co,plete be!innin! W.P Materials ($ 7 0"2+1$) Conversion (+$ 7 0"2$"#) %tarted and co,pleted Materials ("#1$ 7 0"2+1$) Conversion ("#1$ 7 0"2$"#) Cost for units transferred out Endin! 4ork in process Materials ("1$ 7 0"2+1$) Conversion (/$ 7 0"2$"#) &otal costs
01$ +$
5e! W.P
Materi als
Conver sion
01$ 0+$
"/1 0+6"+ 01
01$
0+6"+
"##6 0"/$6
+#$ "## 0/1
01$
0+1$$
/+ 0"//1
HPB?59EM -*; (Continued) (b)
IE%%.C; C?MP;J Production Cost Beport:ockey pucks Kor the Month Ended ;u!ust 6"
Quantities Units to be accounted for Work in process ;u!ust " %tarted into production &otal &o tal units Units accounted for Co,pleted and transferred out Work in process ;u!ust " %tarted and co,pleted Work in process ;u!ust 6" &otal &o tal units Costs Unit costs Costs in ;u!ust (a) Equivalent units (b) Unit costs @(a) F (b)A Costs to be accounted for Work in process ;u!ust " ;dded into production &otal &o tal costs Cost Beconciliation %chedule Costs accounted for &ransferred out Work in process ;u!ust " Conversion costs to co,plete be!innin! inventory ("1$ 7 0"2+) %tarted and co,pleted ("$$$ 7 0+2+) Work in process ;u!ust 6" Materials ($$ 7 0") Conversion costs ("#$ 7 0"2+) &otal &o tal costs H(0"$$ G 0""$ G 0"$$$)
Physical Units
Equivalent Units Conversion Materials Costs
1$$ "$$ +"$$
1$$ "$$$ $$ +"$$
$ "$$$ $$ "$$
"1$ "$$$ "#$ "66$
0"$$ "$$ 0"2$$
0+"$ "66$ 0"2+ 0""+1 6*$H 0##1
0""+1 + ++ 0 $$ +/+
06//6
#/+ 0##1
Problems: Set B Analyze *P4-48B a process costing system and calculate equivalen t units and unit costs.
United Dominion Manufacturing Co. produces a wood refinishing kit that sells for $17.95. The final processing of the kits occurs in the packaging department. A quilted wrap is applied at the beginning of the packaging process. A compartmented outside box printed with instructions and the company's name and logo is added when units are 70% through the process. Conversion costs, consisting of direct labour and applied overhead, occur evenly throughout the packaging process. Conversion activities after the completion of the box include package sealing, testing for leakage, and final inspection. The following data are for the packaging department's activities during the month of October: 1. Beginning work in process inventory was 10,000 units, 60% complete in terms of
conversion costs. 2. During the month, 40,000 units were transferred to packaging. 3. There were 10,000 units in ending work in process, 70% complete in terms of
conversion costs. The packaging department's October costs were as follows: Quilted wrap
$80,000
Outside boxes
50,000
Direct labour
22,000
Applied overhead ($3.00/per direct-labour dollar)
66,000
The costs transferred in from prior processing were $3.00 per unit. The cost of goods sold for the month was $240,000, and the ending finished goods inventory was $84,000. United Dominion Manufacturing Co. uses the FIFO method for process costing. Instructions
(a) Prepare a schedule of equivalent units for the October activity in the packaging department. (b) Determine the cost per equivalent unit for the October production. (adapted from CMA Canada)
Calculate P4-49B Montreal Leather Company manufactures high-quality leather goods. One of the equivalen company's main products is a fine leather belt. The belts are produced in a single, t units, continuous process in its Quebec plant. During the process, leather strips are sewn, unit costs, punched, and dyed. The belts then enter a final finishing stage to conclude the process. and costs Labour and overhead are applied continuously during the manufacturing process. All assigned. materials, leather strips, and buckles are introduced at the beginning of the process. The firm uses the weighted-average method to calculate its unit costs. The leather belts produced at the Quebec plant are sold wholesale for $9.85 each. Management wants to compare the current manufacturing cost per unit with the market prices for leather belts. Top management has asked the Quebec plant controller to submit data on the cost of manufacturing the leather belts for the month of October. These cost data will be used to determine whether modifications in the production process should be initiated or whether an increase in the belts' selling price is justified. The cost per belt used for planning and control is $4.85. The work in process inventory consisted of 12,200 partially completed units on October 1. The belts were 45% complete in terms of conversion costs. The costs included in the inventory on October 1 were as follows: Leather strips
$3,000
Buckles
750
Conversion costs
900
Total
$4,650
During October, 22,800 leather strips were placed into production. A total of 21,000 leather belts were completed. The work in process inventory on October 31 consisted of 14,000 belts, which were 50% complete in terms of conversion costs. The costs charged to production during October were as follows: Leather strips
$ 61,800
Buckles
13,650
Conversion costs
62,100
Total
$137,550
Instructions
In order to provide cost data on the manufacture of leather belts in the Quebec plant to the top management of Montreal Leather Company, calculate the following amounts for the month of October: (a) The equivalent units for materials and conversion costs (b) The assignment of production costs to the October 31 work in process inventory and to goods transferred out (c) The weighted-average unit cost of the leather belts completed and transferred to finished goods. Comment on the cost per belt that the company uses for planning and control.
(adapted from CMA Canada)
Calculate *P4-50B equivalen t units, unit costs, and costs assigned with FIFO.
The following information is for production activities in the refining department of Petro Pure Corporation. All units in work in process (WIP) were costed using the FIFO cost system. Refining Department
Units
Percentage of Completion
Conversion Costs
WIP, February 1
25,000
70%
$ 22,000
Units started and costs incurred during February
135,000
Units completed and transferred to the mixing department
100,000
WIP, February 28
?
143,000
60%
?
Instructions
(a) Calculate the conversion costs per equivalent unit of production during the last period and this period. (b) Calculate the conversion cost in the work in process inventory account at February 28. (c) Calculate the per-unit conversion cost of the units started last period and completed this period.
Prepare a *P4-51B production cost report using FIFO.
Petro Pure Corporation manufactures chemical additives for industrial applications. As the new cost accountant, you have been assigned the task of completing the production cost report for the most recent period. The company uses the FIFO method of process costing. The following information is for the most recent period: Production Data—Units Beginning WIP inventory (75% complete in terms of materials; 70% complete in terms of conversion costs)
18,000
Units started into production this period
27,000
Units completed and transferred out
33,000
Ending WIP inventory (60% complete in terms of materials; 50% complete in terms of conversion costs)
12,000
Cost Data
Beginning inventory:
Production Data—Units Materials
$ 32,000
Conversion costs
64,000
Current period: Materials
252,000
Conversion costs
440,000
Instructions
Prepare a complete production report for the period using the FIFO method. (Round the cost per equivalent unit to three decimal places; round the costs in the cost report to the nearest dollar.) (adapted from CGA-Canada) Determine *P4-52B equivalent units and unit costs and assign costs for processes; prepare a production cost report.
National Company manufactures bicycles and tricycles. For both products, materials are added at the beginning of the production process, and conversion costs are incurred uniformly. National Company uses the FIFO method to calculate equivalent units. Production and cost data for the month of May are as follows: Production Data—Bicycles Work in process units, May 1 Units started into production Work in process units, May 31
Units 300
Percent Complete 70%
1,200 500
30%
Cost Data—Bicycles Work in process, May 1
$17,400
Direct materials
48,000
Direct labour
19,400
Manufacturing overhead
30,420
Production Data—Tricycles
Units
Work in process units, May 1
100
Units started into production
900
Work in process units, May 31
200
Percent Complete 75%
40%
Cost Data—Tricycles Work in process, May 1
$ 8,000
Direct materials
63,000
Direct labour
31,060
Manufacturing overhead
45,415
Instructions
(a) Calculate the following for both the bicycles and the tricycles: 1. The equivalent units of production for materials and conversion costs
2. The unit costs of production for materials and conversion costs 3. The assignment of costs to units transferred out and in process at the end of
the accounting period (b) Prepare a production cost report for the month of May for the bicycles only.
Complete P4-53B Bicnell Corporation manufactures water skis through two processes: moulding and the four packaging. In the moulding department, fibreglass is heated and shaped into the form of a steps ski. In the packaging department, the skis are placed in cartons and sent to the finished necessary goods warehouse. Materials are entered at the beginning of both processes. Labour and to prepare manufacturing overhead are incurred uniformly throughout each process. Production and a cost data for the moulding department for January 2012 are presented below: production Production Data January cost Beginning work in process units 0 report. Units started into production
42,500
Ending work in process units
2,500
Percent complete—ending inventory
40%
Cost Data Materials Labour Overhead Total
$510,000 96,000 150,000 $756,000
Instructions
(a) (b) (c) (d) (e)
Calculate the physical units of production. Determine the equivalent units of production for materials and conversion costs. Calculate the unit costs of production. Determine the costs to be assigned to the units transferred out and in process. Prepare a production cost report for the moulding department for the month of January.
Complete *P4-54B the four steps necessary to prepare a production cost report.
Meetha Corporation is in the candy manufacturing business. Products go through two production departments (A first, then B). Data from those departments for September 2012 are presented below. Department A
Department B
Beginning work in process
Beginning work in process
Number of units
1000
% complete for materials
100%
% complete for transferred-in
100%
% complete for conversion
60%
Total materials cost
$24,000
Total conversion cost
$30,000
Total transferred-in costs
Number of units
30%
$40,000 $15,000
Ending work in process
Ending work in process
600
300
% complete for materials
100%
% complete for transferred-in
100%
% complete for conversion
200
30%
40%
Meetha Corporation started 2,600 units of product during the month in department A. Costs incurred in department A for September 2012 totalled $64,000 for material and $132,000 for conversion. Additionally, department B incurred conversion costs in September 2012 of $600,000. Department B adds no materials to the product.
Instructions
(a) Journalize the transfer of goods from department A to department B during September 2012. Meetha Corporation accounts for its costs using the FIFO method. (b) Prepare a production cost report for department B for September 2012.
Journalize P4-55B McNally Company manufactures a nutrient, Everlife, through two manufacturing transactions. processes: blending and packaging. All materials are entered at the beginning of each process. On August 1, 2012, inventories consisted of $5,000 in Raw Materials, $0 in Work in Process—Blending, $3,945 in Work in Process—Packaging, and $7,500 in Finished Goods. The beginning inventory for packaging consisted of 500 units, two-fifths complete in terms of conversion costs and fully complete in terms of materials. During August, 9,000 units were started into production in blending, and the following transactions were completed: 1. Purchased $25,000 of raw materials on account. 2. Issued raw materials for production: blending $18,930 and packaging $9,140. 3. Incurred labour costs of $23,770. 4. Used factory labour: blending $13,320 and packaging $10,450. 5. Incurred $41,500 of manufacturing overhead on account. 6. Applied manufacturing overhead at the rate of $25 per machine hour. Machine
hours were 900 for blending and 300 for packaging. 7. Transferred 8,200 units from blending to packaging at a cost of $44,940. 8. Transferred 8,600 units from packaging to Finished Goods at a cost of $67,490. 9. Sold goods costing $62,000 for $90,000 on account.
Instructions
Journalize the August transactions.
Assign costsP4-56B Crosby Company has several processing departments. Costs charged to the assembly and prepare department for October 2012 totalled $1,249,500, as follows: a production Work in process, October 1 cost report. Materials $29,000 Conversion costs
16,500
Materials added
$
45,500 1,006,000
Labour
90,000
Overhead
108,000
Production records show that 25,000 units were in beginning work in process, 40% complete in terms of conversion costs; 425,000 units were started into production; and 35,000 units were in ending work in process, 40% complete in terms of conversion costs. Materials are entered at the beginning of each process. Instructions
(a) Determine the equivalent units of production and the unit production costs for the assembly department. (b) Determine the assignment of costs to goods transferred out and in process. (c) Prepare a production cost report for the assembly department.
Determin e equivalen t units and unit costs, and assign costs.
P4-57B Sarku Company manufactures bicycles and tricycles. For both products, materials are
added at the beginning of the production process, and conversion costs are incurred uniformly. Production and cost data for the month of May are as follows: Production Data—Bicycles Work in process units, May 1 Units started into production Work in process units, May 31
Units 500
Percent Complete 80%
1,500 800
25%
Cost Data—Bicycles Work in process, May 1 Materials Conversion costs Direct materials
$15,000 18,000
$33,000 50,000
Production Data—Bicycles
Units
Percent Complete
Direct labour
18,320
Manufacturing overhead
33,680
Instructions
(a) Calculate the following: 1. The equivalent units of production for materials and conversion costs 2. The unit costs of production for materials and conversion costs 3. The assignment of costs to units transferred out and in process at the end of
the accounting period (b) Prepare a production cost report for the month of May for the bicycles.
Calculate equivalent units and complete a production cost report.
P4-58B Windsor Cleaner Company uses a weighted-average process costing system and
manufactures a single product—an all-purpose liquid cleaner. The company has just completed the manufacturing activity for the month of March. A partially completed production cost report for the month of March for the mixing and blending department is shown below.
WINDSOR CLEANER COMPANY Mixing and Blending Department Production Cost Report For the Month Ended March 31 Equivalent Units Physica l Units
Quantities Units to be accounted for Work in process, March 1 (40% materials, 20% conversion costs)
10,000
Started into production
100,00 0
Total units
110,00 0
Material s
Conversio n Costs
Units accounted for Transferred out
95,000
?
?
Work in process, March 31 (
15,000
?
?
110,00 0
?
?
materials, n costs)
conversio
Total units accounted for Costs
Material s
Conversio n Costs
Costs in March
$156,00 0
$98,000
Equivalent units
?
?
$ ?
$ ?
Total
Unit costs
Unit costs
$254,00 0
$
?
Costs to be accounted for Work in process, March 1 Started into production Total costs
Cost Reconciliation Schedule Costs accounted for
$ 8,700 245,300 $254,00 0
WINDSOR CLEANER COMPANY Mixing and Blending Department Production Cost Report For the Month Ended March 31 Equivalent Units Quantities
Physica l Units
Material s
Conversio n Costs
Transferred out
$
?
Work in process, March 31 Materials
?
Conversion costs
?
Total costs
? $
?
Instructions
(a) Prepare a schedule that shows how the equivalent units were calculated so that you can complete the “Quantities: Units accounted for” equivalent units section in the production cost report above, and calculate March unit costs. (b) Complete the “Cost Reconciliation Schedule” part of the production cost report above.
Determine *P4-59B equivalent units and unit costs and assign costs for processes using FIFO; prepare a production cost report.
Maloney Company manufactures hockey pucks and soccer balls. For both products, materials are added at the beginning of the production process and conversion costs are incurred uniformly. Maloney uses the FIFO method to calculate equivalent units. Production and cost data for the month of August are as shown below. Production Data—Hockey pucks Work in process units, August 1 Units started into production Work in process units, August 31
Units 500
Percent Complete 60%
1,600 600
50%
Cost Data—Hockey pucks Work in process, August 1
$1,125
Direct materials
1,600
Direct labour
1,175
Manufacturing overhead
1,000
Production Data—Soccer balls Work in process units, August 1 Units started into production Work in process units, August 31
Units 200
Percent Complete 80%
2,000 150
70%
Cost Data—Soccer balls Work in process, August 1
$ 450
Direct materials
2,600
Direct labour
1,000
Manufacturing overhead
995
Instructions
(a) Calculate the following for both the hockey pucks and the soccer balls: 1. The equivalent units of production for materials and conversion costs 2. The unit costs of production for materials and conversion costs 3. The assignment of costs to units transferred out and in process at the end of
the accounting period (b) Prepare a production cost report for the month of August for the hockey pucks only.
SOLUTI ONSTO PROBLEMS—SETB * PROBLEM 448B
(a) Quantities
Units to be accounted for Work in process be!innin! %tarted this period &otal units Units accounted for Work in process be!innin! Materials-" ($') Materials-+ ("$$') Conversion ($'") %tarted and co,pleted Work .n process endin! Materials-" ("$$') Materials-+ ("$$')H Conversion (*$') &otal equivalent units
Equivalent Units Material Material Convers Physical s s ion Units (") (+) Costs
"$$$$ $$$$ 1$$$$
"$$$$ "$$$$ 6$$$$ "$$$$
6$$$$ 6$$$$
$$$ 6$$$$
"$$$$ "$$$$ *$$$ 1$$$$
$$$$ 1$$$$
"$$$
Current period costs
0#$$$$ 01$$$$ 0##$$$
(b) Per equivalent unit cost "
(0+2$$ G 0"2$$ G 0+2"1)
H,aterial is added at *$'
1
012"1"
0+2$$
0"2$$
0+2"1
PROBLEM 449B
Equivalent Units (a) Quantities
Units to be accounted for Work in process be!innin! %tarted this period &otal units Units accounted for Co,pleted Work .n process endin! %trips ("$$') 5uckles ("$$') Conversion (1$') &otal equivalent units (,)
Physical Units
%trips
"++$$ ++#$$ 61$$$
+"$$$ "$$$
+"$$$
+"$$$
"$$$ *$$$ 61$$$
&?&;9
61$$$ , 61$$$ , +#$$$ ,
%trips
Costs
;dded durin! the ,onth
+"$$$
"$$$
(b)
Costs to be accounted for3 Work in process be!innin!
Conversi 5uckles on Costs
Conversi 5uckles on Costs
01$
06$$$
0*1$
0/$$
0"6*11$
"#$$
"61$
+"$$
&otal costs (n)
0"++$$ 0#$$ n 0"$$ n 06$$$ n
Per equivalent unit cost @(n) ÷(,)A
021"+# " 0"2#1" 0$2""
"
(0"2#1" G 0$2"" G 0+2+1)
0+2+1
PB?59EM -/5 (Continued)
Cost accounted for as follo4s3
&?&;9
Co,pleted and transferred out (+"$$$ 7 021"+#)
0/*/
Endin! 4ork in process %trips ("$$$ 7 0"2#1") 5uckles ("$$$ 7 0$2"") Conversion (*$$$ 7 0+2+1) &otal costs
%trips
Convers 5uckles ion Costs
0*6$ 0+1/+$ 01*$ 0"1*1$ 0"+"//
(c) &he 4ei!hted-avera!e cost of a co,pleted belt is 021"+# each2 &his is less than the plannin! and control cost for a belt 4hich ,i!ht indicate that no ,odifications in the production process are required2 o4ever co,panies should practice continuous i,prove,ent and still look for 4ays that could reduce their ,anufacturin! costs and increase their !ross ,ar!in2 Mana!e,ent should also investi!ate the accuracy of their control cost of 02#1 as it ,ay be out of date and does not reflect actual eLperience2
* PROBLEM 450B (a) (") Per unit conversion cost for last period3 Ju,ber of units transferred +1$$$ 7 Percenta!e co,pleted *$' > Equivalent units "*1$$ Cost assi!ned 0++$$$ Per unit conversion cost last period 0"2+1* (+) Per unit conversion cost for this period3 Equivalent units this period3 Co,plete be!innin! inventory (6$' " 7 +1$$$) %tarted and co,pleted ("$$$$$ +1$$$) %tarted endin! inventory ($' 7 $$$$H) &otal equivalent units for the current period "
*1$$ *1$$$ 6$$$ ""#1$$
*$' co,pleted 6$' to be added
Per unit conversion cost this period3 0"6$$$ F ""#1$$ > 0"2+$* HCalculation of units in endin! inventory3 +1$$$ G "61$$$ "$$$$$ (b) Equivalent units endin! inventory ($$$$H 7 $') Conversion per unit cost &otal conversion cost in endin! inventory (c) Per unit cost of units in be!innin! inventory3 *$' co,pleted last ,onth at a rate of 0"2+1* 6$' co,pleted this ,onth at a rate of 0"2+$* Wei!hted-avera!e unit cost
6$$$ 0"2+$* 06"
0$2## 0$26 0"2+
* PROBLEM 451B
PE&B?-PUBE C?BP?B;&.?J Production Cost Beport Kor the current period
Quantities Units to be accounted for Work in process be!innin! %tarted this period &otal units Units accounted for Work in process be!innin! Materials (+1') Conversion (6$') %tarted and co,pleted Work .n process endin! Materials ($') Conversion (1$') &otal equivalent units (,)
Physical Units "#$$$ +*$$$ 1$$$
"#$$$ 1$$ "1$$$ "+$$$
"1$$$
1$$ "1$$$
*+$$ $$$ 1$$$
Costs added this period Cost per equivalent unit @(s) ÷(t)A
Equivalent Units Conversion Materials Costs
0+2"$1
+*$$
+$$
0+1+$$$
0$$$$
0/26#
0"2*
HPB?59EM -1"5 (Continued) Costs Costs to be accounted for3 Work in process be!innin! ;dded this period &otal costs Cost accounted for as follo4s3 Work in process be!innin! Co,plete be!innin! W.P Material (1$$ 7 0/26#) Conversion (1$$ 7 0"2*) %tarted and Co,pleted ("1$$$ 7 0+2"$1) Work in process endin! Material (*+$$ 7 0/26#) Conversion ($$$ 7 0"2*) &otal costs
&?&;9
Materials
Conversion Costs
0/$$$ /+$$$ 0*##$$$
06+$$$ +1+$$$ 0+#$$$
0$$$ $$$$ 01$$$$
0/$$$ "6+*"
06+$$$
0$$$
+*" /$$$$ 6/"1*1 "*/1
""1*1
+1$$$$
*/1 "$$$$$ 0*##$$$
0+#$$$
01$$$$
* PROBLEM 452B ( a) ;2 5.CC9E% Quantities
Physical Units
Units to be accounted for Work in process be!innin! %tarted into production &otal units
6$$ "+$$ "1$$
Units accounted for Work in process be!innin! %tarted and co,pleted Work .n process endin! &otal units
6$$ *$$ 1$$ "1$$
(") Equivalent units:Materials Physical Units Work in process be! %tarted and co,pleted Work in process end &otal
6$$ *$$ 1$$ "1$$
Materials ;dded &his Period $' "$$' "$$'
Equivalent Units $ *$$ 1$$ "+$$
Equivalent units:Conversion Physical Units Work in process be! %tarted and co,pleted Work in process end &otal
6$$ *$$ 1$$ "1$$
Conversion ;dded &his Period 6$' "$$' 6$'
Equivalent Units /$ *$$ "1$ /$
* PROBLEM 452B( Cont i nued) (+) Unit costs
Costs in the ,onth (a) Equivalent units (b) Unit costs @(a) F (b)A
Materials
Conversion
0#$$$ "+$$ 0$2$$
0/#+$ " /$ 0162$$
"
8irect 9abour 0"/$$ G Manufacturin! ?verhead 06$+$
(6) Costs Costs to be accounted for3 Work in process be!innin! ;dded this period &otal costs Cost accounted for as follo4s3 Work in process be!innin! Co,plete be!innin! W.P Material ($ 7 0$2$$) Conversion (/$ 7 0162$$) %tarted and Co,pleted (*$$ 7 0/62$$) &otal cost of units co,pleted Work in process endin! Material (1$$ 7 0$2$$) Conversion ("1$ 7 0162$$) &otal costs
&?&;9
Materials
Conversion Costs
0"*$$ /*#+$ 0""1++$
0"*$$ **$ 0**$ 1"$$ #*+*$
0+#$$$
6*"$$
+*/1$ +$$$$ */1$ 0""1++$
* PROBLEM 452B( Cont i nued) 52 &B.CC9E% Physical Units
Quantities Units to be accounted for Work in process be!innin! %tarted into production &otal units Units accounted for Work in process be!innin! %tarted and co,pleted Work .n process endin! &otal units
"$$ /$$ "$$$
"$$ *$$ +$$ "$$$
(") Equivalent units:Materials Physical Units Work in process be! %tarted and co,pleted Work in process end &otal
"$$ *$$ +$$ "$$$
Materials ;dded &his Period $' "$$' "$$'
Equivalent Units $ *$$ +$$ /$$
Equivalent units:Conversion Physical Units Work in process be! %tarted and co,pleted Work in process end &otal
"$$ *$$ +$$ "$$$
Conversion ;dded &his Period +1' "$$' $'
Equivalent Units +1 *$$ #$ #$1
* PROBLEM 452B( Cont i nued) (+) Unit costs
Costs in the ,onth (a) Equivalent units (b) Unit costs @(a) F (b)A
Materials
Conversion
06$$$ /$$ 0*$2$$
0**1 " #$1 0/12$$
"
8irect 9abour 06"$$ G Manufacturin! ?verhead 01"1
(6) Costs Costs to be accounted for3 Work in process be!innin! ;dded this period &otal costs Cost accounted for as follo4s3 Work in process be!innin! Co,plete be!innin! W.P Material ($ 7 0*$2$$) Conversion (+1 7 0/12$$) %tarted and Co,pleted (*$$ 7 0"12$$) &otal cost of units co,pleted Work in process endin! Material (+$$ 7 0*$2$$) Conversion (#$ 7 0/12$$) &otal costs
&?&;9
Materials
Conversion Costs
0
#$$$ "6/*1 0"**1
0#$$$ +6*1 0+6*1 ""11$$ "+1#*1
0/$$$
1$$
+"$$ "$$$ *$$ 0"**1
* PROBLEM 452B( Cont i nued) ( b)
NATI ONALCOMPANY Pr oduct i onCostRepor t —Bi cycl es Fort heMont hEndedMay 31
Quant i t i es Uni t st obeaccount edf or Wor ki npr ocess,begi nni ng St a r t e di nt opr oduc t i on Tot aluni t s Uni t saccount edf or Compl et edandt r ansf er r edout Wor ki npr ocess,begi nni ng St ar t edandcompl et ed Wor kI npr ocess,endi ng Tot aluni t s Cost s Uni tc os t s( St e p3 ) Cost si nt hemont h( a) Equi v al entuni t s( b) Uni tcost s[ ( a)÷( b) ]
Physi cal Uni t s
Equi v al e ntUni t s Conver si on Mat er i al s Cost s
300 1, 200 1, 500
300 700 500 1, 500
0 700 500 1, 200 Mat er i al s $ 48 , 0 00 1, 200 $ 40 . 0 0
Cost st obeaccount edf or Wor ki npr ocess,begi nni ng St a r t e di nt opr oduc t i on T ot alcost s CostReconci l i at i onSchedul e( St ep4) Cost saccount edf or Tr ansf er r edout Wor ki npr ocess,begi nni ng Conver si oncost st ocompl et e be gi nni ngi nv ent or y( 9 0×$5 3. 0 0) St ar t edandcompl et ed( 700×$93. 00) Wor ki npr ocess,endi ng Ma t e r i a l s( 5 00×$ 40 ) Conver si oncost s( 150×$53. 00)
90 700 150 940 Conver si on $ 49 , 8 20 940 $ 53 . 0 0 $17, 400 9 7, 8 20 * $115, 220
$ 17 , 4 00 4, 770 6 5, 10 0 $ 20 , 0 00 7, 950
$ 87 , 2 70
2 7, 9 50 $115, 220
* ( $ 50 , 0 00+$ 25 , 2 00+$ 30 , 0 00 )
PROBLEM 453B
(a) Quantities Units to be accounted for Work in process be!innin! %tarted this period &otal units Units accounted for %tarted and co,pleted Work .n process endin! Materials ("$$') Conversion ($') &otal equivalent units (,) Costs added this period Cost per equivalent unit @(s) ÷(t)A
(d) Costs Costs to be accounted for3 Work in process be!innin! ;dded this period &otal costs Cost accounted for as follo4s3 %tarted and Co,pleted ($$$$ 7 0"#2$$) Work in process endin! Material (+1$$ 7 0"+2$$) Conversion ("$$$ 7 02$$) &otal costs
Physical Units
Equivalent Units Conversion Materials Costs
$ +1$$ +1$$
$$$$ +1$$
$$$$
$$$$
+1$$ +1$$ 0"#2$$
+1$$
(b)
"$$$ "$$$
01"$$$$ 0+$$$ 0"+2$$ (c) 02$$
&?&;9
Materials
Conversion Costs
0 $ 0*1$$$ 0*1$$$
01"$$$$ 01"$$$$
0+$$$ 0+$$$
0#$$$$
0+$$$$
0*+$$$$ 6$$$
6$$$$ 0*1$$$
01"$$$$
$$$ 0+$$$
PB?59EM -165 (Continued) ( e)
BI CNELLCORPORATI ON Mol di ngDepar t ment Pr oduct i onCostRepor t Fort heMont hEndedJanuar y31,2012 Equi v al e ntUni t s
Quant i t i es
Physi cal Uni t s
Mat er i al s
( St ep1) Uni t st obeaccount edf or Wor ki npr ocess,Januar y1 St a r t e di nt opr oduc t i on Tot aluni t s
0 4 2, 5 00 4 2, 5 00
Uni t saccount edf or Tr ansf er r edout Wor ki npr ocess,Januar y31 Tot aluni t s
40, 000 2, 500 35, 000
Cost s Uni tc os t s( St e p3 ) Cost si nJanuar y Equi v al e ntuni t s Uni tcost s( a )÷( b) Cost st obeaccount edf or Wor ki npr ocess,Januar y1 St a r t e di nt opr oduc t i on T ot alcost s CostReconci l i at i onSchedul e( St ep4)
Conver si on Cost s
( St ep2)
40, 000 2, 500 35, 000
Mat er i al s ( a) $510, 000 ( b) 4 2, 5 00 $12
40, 000 1, 000 ( 2, 500×40%) 41, 000
Conver si on Cost s $246, 000 4 1, 0 00 $6
Tot al $756, 000 $18
$ 0 7 56 , 0 00 $756, 000
Cost saccount edf or T r a ns f e r r e dout( 4 0, 0 00×$ 18 ) Wor ki npr ocess,Januar y31 Ma t e r i a l s( 2 , 5 00×$ 12 ) Conver si oncost s( 1, 000×$6) T ot alcost s
$720, 000 $ 30 , 0 00 6 , 0 00
36 , 0 00 $756, 000
* PROBLEM 454B 8epart,ent ; Physical Units
Quantities Units to be accounted for Work in process be!innin! %tarted into production &otal units Units accounted for Work in process be!innin! %tarted and co,pleted Work .n process endin! &otal units
"$$$ +$$ 6$$
"$$$ +$$$ $$ 6$$
(") Equivalent units:Materials Physical Units Work in process be! %tarted and co,pleted Work in process end &otal
"$$$ +$$$ $$ 6$$
Materials ;dded &his Period $' "$$' "$$'
Equivalent Units $ +$$$ $$ +$$
Equivalent units:Conversion Physical Units
Conversion ;dded &his Period
Equivalent Units
Work in process be! %tarted and co,pleted Work in process end &otal
"$$$ +$$$ $$ 6$$
$' "$$' 6$'
$$ +$$$ "#$ +1#$
PROBLEM 454B( Cont i nued) Unit costs
Costs in the ,onth (a) Equivalent units (b) Unit costs @(a) F (b)A
Materials
Conversion
0$$$ +$$ 0+2"1
0"6+$$$ +1#$ 01"2"+#
Costs Costs to be accounted for3 Work in process be!innin! ;dded this period &otal costs Cost accounted for as follo4s3 Work in process be!innin! Co,plete be!innin! W.P Material ($ 7 0+2"1) Conversion ($$ 7 01"2"+#) %tarted and Co,pleted (+$$$ 7 0*12**#+) &otal cost of units co,pleted Work in process endin! Material ($$ 7 0+2"1) Conversion ("#$ 7 01"2"+#) &otal costs
&?&;9
Materials
Conversion Costs
0 1$$$ "/$$$ 0+1$$$$
01$$$ +$1 $ 0+$1 "1"11* ++$++
0/+6"
"$+6+
+6/*# "*/ /+$/ 0+1$$$$
( a)Wor ki nPr ocess—Depar t mentB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226, 022 Wor ki nPr ocess—Depar t mentA. . . . . . . . . . . . . . . . . . . . . . . . 2 26 , 0 22
PROBLEM 454B( Cont i nued) 8epart,ent 5 Physical Units
Quantities Units to be accounted for Work in process be!innin! &ransferred into production &otal units Units accounted for Work in process be!innin! &ransferred in and co,pleted Work .n process endin! &otal units
+$$ 6$$$ 6+$$
+$$ +*$$ 6$$ 6+$$
(") Equivalent units:&ransferred in Physical Units Work in process be! &ransferred in co,pleted Work in process end &otal
+$$ +*$$ 6$$ 6+$$
Materials ;dded &his Period $' "$$' "$$'
Equivalent Units $ +*$$ 6$$ 6+$$
Equivalent units:Conversion Physical Units Work in process be! &ransferred in co,pleted Work in process end &otal
+$$ +*$$ 6$$ 6+$$
Conversion ;dded &his Period *$' "$$' $'
Equivalent Units "$ +*$$ "+$ +/$
PROBLEM 454B( Cont i nued) Unit costs
Costs in the ,onth (a) Equivalent units (b) Unit costs @(a) F (b)A
&ransferred -in 0++$++ 6$$$
Conversion
0*126$*
0+$+2*$+*
Costs Costs to be accounted for3 Work in process be!innin! &ransferred-in costs ;dded in the ,onth &otal costs Cost accounted for as follo4s3 Work in process be!innin! Co,plete be!innin! W.P Conversion ("$ 7 0+$+2*$+*) &ransferred-in co,pleted &rans-in (+*$$ 7 0*126$*) Conver2 (+*$$ 7 0+$+2*$+*) &otal cost of units co,pleted Work in process endin! &rans-in (6$$ 7 0*126$*) Conversion ("+$ 7 0+$+2*$+*) &otal costs
0$$$$$ +/$
&?&;9
&ransferre d-in
Conversion Costs
0 11$$$ ++$++ $$$$$ 0##"$++
011$$$ +#6*/ 0+#6*/ *1$*"* +$6+$ 1*+/* #6$/ /+ ++$+ +6+ 0##"$++
PROBLEM 454B( Cont i nued) ( b)
METHACORPORATI ON Depar t mentB Pr oduct i onCostRepor t Fort heMont hEndedSept ember30,2012 Equi v al e ntUni t s
Quant i t i es Uni t st obeaccount edf or Wor ki npr ocess,begi nni ng T r a ns f e r r e di n Tot aluni t s Uni t saccount edf or Wor ki npr ocess,begi nni ng Tr ansf er r edi n&compl et ed Wor ki npr ocess,endi ng Tot aluni t s Cost s Uni tc os t s T ot a lc os t sf ort hemont h Equi v al e ntuni t s Uni tcost s( a )÷( b) Cost st obeaccount edf or Wor ki npr ocess,begi nni ng T r a nsf er r edi n St a r t e di nt opr oduc t i on T ot alcost s CostReconci l i at i onSchedul e
Physi cal Uni t s
T r a n s f e r r edi n
Conver si on Cost s
200 3, 000 3, 200 200 2. 700 300 3, 200
0 2 , 7 00 300 3, 000
( a) $226, 022 ( b) 3 , 0 00 $75. 3407
140 2 , 7 00 120 ( 300×40%) 2, 960 Tot al $600, 000 2 , 9 60 $202. 7027
$826, 022 $278. 0434 $55 , 0 00 2 26 , 0 22 6 00 , 0 00 $881, 022
Cost saccount edf or : T r a ns f e r r e dout : Wor ki npr ocess,begi nni ng Compl et ebegi nni ngWI P( 140×$202. 7027) Tr ansf er r edi n&compl et ed( 2, 700×$278. 0434) Wor ki npr ocess,endi ng T r a ns f e r r e di n( 3 00×$ 75 . 3 40 7) Conver si oncost s( 120×$202. 7027) T ot alcost s
$ 55 , 0 00 28 , 3 79 7 50 , 7 17 $22, 602 24 , 3 24
$834, 096
4 6, 9 26 $881, 022
PROBLEM 455B
1. Raw Mat er i al sI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 000 Account sPayabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 00 0 2. Wor ki nPr ocess—Bl endi ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 930 Wor ki nPr ocess—Packagi ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 140 Raw Mat e r i al sI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28, 07 0 3. Fact or yLabour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 770 WagesPayabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 77 0 4. Wor ki nPr ocess—Bl endi ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 320 Wor ki nPr ocess—Packagi ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 450 Fact or yLabour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 77 0 5. Manuf act ur i ngOver head. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41, 500 Account sPayabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41, 50 0 6. Wor ki nPr ocess—Bl endi ng( 900×$25 ) . . . . . . . . . . . . . . . . . . . . 22, 50 0 Wor ki nPr ocess—Packagi ng( 300×$25) . . . . . . . . . . . . . . . . . . 7, 500 Manuf a ct ur i ngOver head. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 00 0 7. Wor ki nPr ocess—Packagi ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44, 940 Wor ki nPr ocess—Bl endi ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44, 94 0 8. Fi ni shedGoodsI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67, 490 Wor ki nPr ocess—Packagi ng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67, 49 0 9. Account sRecei vabl e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90, 000 Sal es. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90, 00 0
CostofGoodsSol d. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62, 000 Fi ni shedGoodsI nvent or y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62, 00 0
PROBLEM 456B
Quantities Units to be accounted for Work in process be!innin! %tarted this period &otal units Units accounted for %tarted and co,pleted Work .n process endin! Materials ("$$') Conversion ($') (a)(") &otal equivalent units
Physical Units +1$$$ +1$$$ 1$$$$
"1$$$ 61$$$
Costs Costs to be accounted for3 Work in process be!innin! ;dded this period &otal costs for this period
"1$$$
"1$$$
61$$$ 1$$$$
Costs for this period (see belo4) (+) Cost per equivalent unit
Equivalent Units Conversion Materials Costs
1$$$$
"$$$ +/$$$
0"$61$$$
0+"1$$
0+26$
0$21$
&?&;9
Materials
Conversion Costs
011$$ "+$$$$ 0"+/1$$
0+/$$$ "$$$$$ 0"$61$$$
0"1$$ "/#$$$ 0+"1$$
0+2#$
PROBLEM 456B( Cont i nued)
&?&;9 (b) Cost accounted accounted for as follo4s3 Co,pleted and transferred out ("1$$$ 7 0+2#$) 0""+$$$ Work in process endin! #*1$$ Material (61$$$ 7 0+26$) Conversion ("$$$ 7 0$21$) &otal costs 0"+/1$$
( c)
Materials
Conversion Costs
0/11$$
0+$*1$$
#$1$$ 0"$61$$$
*$$$ 0+"1$$
CROSBYCOMPANY Assemb mbl yDepar t ment Pr oduct i onCostRepor t Fort heMo Mont hEndedOct ober31,2012 Equi v al e ntUni t s
Quant i t i es
Physi cal Uni t s ( St ep1)
Uni t st obeaccount edf or Wor ki npr ocess,Oct ober1 St a r t e di nt opr oduc t i on Tot aluni t s
2 5, 0 00 4 25 , 0 00 4 50 , 0 00
Uni t saccount edf or Tr ansf er r edout Wor ki npr ocess,Oct ober31 Tot aluni t s
415, 000 35, 000 450, 000
Mat er i al s
Conver si on Cost s
( St ep2)
415, 000 35, 000 450, 000
415, 000 14, 000 ( 40, 000×40%) 429, 000
PROBLEM 456B( Cont i nued) Cost s Mat er i al s Uni tc os t s( St e p3 ) Cost si nOc Oct ober Equi v al e ntuni t s Uni tcost s( a )÷( b)
( a)$ 1, 0 35 , 0 00 ( b) 4 50 , 0 00 $2 . 3 0
Conver si on Cost s $214, 500 4 29 , 0 00 $ 0. 5 0
Cost st obeaccount edf or Wor ki npr ocess,Oct ober1 St a r t e di nt opr oduc t i on T ot alcost s
Tot al $ 1, 2 49 , 5 00 $ 2. 80
$ 45, 500 1, 204, 000 $ 1, 2 49 , 5 00
CostReconci l i at i onSchedul e( St ep4) Cost saccount edf or T r a ns f e r r e dout( 4 15 , 0 00×$ 2. 8 0) Wor ki npr ocess,Oct ober31 Ma t e r i a l s( 3 5, 0 00×$ 2. 3 0) Conversi oncost s( 14, 000×$. 50) T ot alcost s
$ 1, 1 62 , 0 00 $ 80 , 5 00 7, 0 00
87 , 5 00 $ 1, 2 49 , 5 00
PROBLEM 457B
(a) Quantities Units to be accounted for Work in process be!innin! %tarted this period &otal units Units accounted for %tarted and co,pleted Work .n process endin! Materials ("$$') Conversion (+1') (") &otal equivalent units
Physical Units 1$$ "1$$ +$$$
"+$$ #$$
Costs Costs to be accounted for3 Work in process be!innin! ;dded this period &otal costs
"+$$
"+$$
#$$ +$$$
+$$ "$$
01$$$
0*$$$$
06+21$
01$2$$
&?&;9
Materials
Conversion Costs
066$$$ "$+$$$ 0"61$$$
0"1$$$ 1$$$$ 01$$$
0"#$$$ 1+$$$ 0*$$$$
+$$$
Costs for this period (see belo4) (+) Cost per equivalent unit
Equivalent Units Conversion Materials Costs
0#+21$
PROBLEM 457B( Cont i nued) (6) Cost accounted for as follo4s3 %tarted and Co,pleted ("+$$ 7 0#+21$) Work in process endin! Material (#$$ 7 06+21$) Conversion (+$$ 7 01$2$$) &otal costs
( b)
0//$$$ 6$$$
06/$$$ +$$$
0"61$$$
01$$$
SARKUCOMPANY Bi cycl eDepar t ment Pr oduct i onCostRepor t Fort heMont hEndedMay31 ,2012 Equi v al e ntUni t s
Quant i t i es
0$$$$
Physi cal Uni t s ( St ep1)
Uni t st obeaccount edf or Wor ki npr ocess,May1 St a r t e di nt opr oduc t i on Tot aluni t s
500 1 , 5 00 2 , 0 00
Uni t saccount edf or Tr ansf er r edout Wor ki npr ocess,May31 Tot aluni t s
1, 200 800 2. 000
Mat er i al s
Conver si on Cost s
( St ep2)
1, 200 800 2, 000
1, 200 200 1, 400
"$$$$ 0*$$$$
PROBLEM 457B( Cont i nued)
Cost s Uni tc os t s( St e p3 ) Cost si nMay Equi v al e ntuni t s Uni tcost s( a )÷( b)
Mat er i al s ( a) $ 65 , 0 00 ( b) 2 , 0 00 $ 32 . 5 0
Conver si on Cost s $ 70 , 0 00 1, 400 $ 50 . 0 0
Cost st obeaccount edf or Wor ki npr ocess,May1 St a r t e di nt opr oduc t i on T ot alcost s
Tot al $135, 000 $8 2. 5 0
$ 3 3, 0 00 1 02 , 0 00 $135, 000
CostReconci l i at i onSchedul e( St ep4) Cost saccount edf or T r a ns f e r r e dout( 1 , 2 00×$ 82 . 5 0) Wor ki npr ocess,May31 Ma t e r i a l s( 8 00×$ 32 . 5 0) Conver si oncost s( 200×$50) T ot alcost s
$99, 000 $ 26 , 0 00 1 0, 0 00
3 6, 0 00 $135, 000
PROBLEM 458B
(a) Quantities Units to be accounted for Work in process be!innin! %tarted this period &otal units Units accounted for %tarted and co,pleted Work .n process endin! Materials (+=6) Conversion ("=6) &otal equivalent units
Physical Units
Equivalent Units Conversion Materials Costs
"$$$$ "$$$$$ ""$$$$
/1$$$ "1$$$
/1$$$
/1$$$
"$$$$ ""$$$$
Costs for this period (see belo4)
"$1$$$
1$$$ "$$$$$
0"1$$$
0/#$$$
Cost per equivalent unit
0+21*
0"2#1*
0$2/#$$
(b) Costs Costs to be accounted for3 &otal costs
0+1$$$
0"1$$$
0/#$$$
0+6++ "/*1*
0"""+
0/6"$$
Cost accounted for as follo4s3 &ransferred out (/1$$$ 7 0+21*) Work in process endin! Material ("$$$$ 7 0"2#1*) Conversion (1$$$ 7 0$2/#) &otal costs
"#1* 0+16///
0"11///
/$$ 0/#$$$
* PROBLEM 459B
( a) ;2 ?CDE PUCD% Quantities
Physical Units
Units to be accounted for Work in process be!innin! %tarted into production &otal units
1$$ "$$ +"$$
Units accounted for Work in process be!innin! %tarted and co,pleted Work .n process endin! &otal units
1$$ "$$$ $$ +"$$
(") (") Equi Equiva vale lent nt un unit its: s:Ma Mate teri rial als s Physical Units Work in process ;u! " %tarted and co,pleted Work in process ;u! 6" &otal
1$$ "$$$ $$ +"$$
Materials ;dded &his Period $' "$$' "$$'
Equivalent Units $ "$$$ $$ "$$
Equivalent units:Conversion units:Conversion Physical Units Work in process ;u! " %tarted and co,pleted Work in process ;u! 6" &otal
1$$ "$$$ $$ +"$$
Conversion ;dded &his Period $' "$$' 1$'
Equivalent Units +$$ "$$$ 6$$ "1$$
* PROBLEM 459B( Cont i nued) (+) Unit costs
Costs in ;u!ust (a) Equivalent units (b) Unit costs @(a) F (b)A
(6) Costs Costs to be accounted for3 Work in process be!innin! ;dded this period &otal costs Cost accounted for as follo4s3 Work in process be!innin! Co,plete be!innin! W.P Material ($ 7 0"2$$) Conversion (+$$ 7 0"21) %tarted and Co,pleted ("$$$ 7 0+21) &otal cost of units co,pleted Work in process endin! Material ($$ 7 0"2$$) Conversion (6$$ 7 0"21) &otal costs
Materials
Conversion
0"$$ "$$ 0"2$$
0+"*1 "1$$ 0"21
&?&;9
Materials
Conversion Costs
0""+1 6**1 0/$$
0"$$
0+"*1
0""+1 +/$ --+/$ +1$ 6#1
"$$$
"1$
"$61 $$ 61 0/$$
* PROBLEM 459B( Cont i nued) 52 %?CCEB 5;99% Quantities
Physical Units
Units to be accounted for Work in process be!innin! %tarted into production &otal units
+$$ +$$$ ++$$
Units accounted for Work in process be!innin! %tarted and co,pleted Work .n process endin! &otal units
+$$ "#1$ "1$ ++$$
(") Equivalent units:Materials Physical Units Work in process ;u! " %tarted and co,pleted Work in process ;u! 6" &otal
+$$ "#1$ "1$ ++$$
Materials ;dded &his Period $' "$$' "$$'
Equivalent Units $ "#1$ "1$ +$$$
Equivalent units:Conversion Physical Units Work in process ;u! " %tarted and co,pleted Work in process ;u! 6" &otal
+$$ "#1$ "1$ ++$$
Conversion ;dded &his Period +$' "$$' *$'
Equivalent Units $ "#1$ "$1 "//1
* PROBLEM 459B( Cont i nued) (+) Unit costs
Costs in ;u!ust (a) Equivalent units (b) Unit costs @(a) F (b)A
(6) Costs Costs to be accounted for3 Work in process be!innin! ;dded this period &otal costs Cost accounted for as follo4s3 Work in process be!innin! Co,plete be!innin! W.P Material ($ 7 0"26$) Conversion ($ 7 0"2$$) %tarted and Co,pleted ("#1$ 7 0+26$) &otal cost of units co,pleted Work in process endin! Material ("1$ 7 0"26$) Conversion ("$1 7 0"2$$) &otal costs
Materials
Conversion
0+$$ +$$$ 0"26$
0"//1 "//1 0"2$$
&?&;9
Materials
Conversion Costs
01$ 1/1 01$1
0+$$
0"//1
01$ $ $ $ +11 *1
+$1
"#1$
6$$ "/1 "$1 01$1
* PROBLEM 459B( Cont i nued) ( b) MALONEYCOMPANY Pr oduct i onCostRepor t —Hocke ypucks Fort heMont hEndedAugust31
Quant i t i es Uni t st obeaccount edf or Wor ki npr ocess,August1 St a r t e di nt opr oduc t i on Tot aluni t s Uni t saccount edf or Compl et edandt r ansf er r edout Wor ki npr ocess,August1 St ar t edandcompl et ed Wor ki npr ocess,August31 Tot aluni t s Cost s Uni tc os t s( St e p3 ) Cost si nAugust( a) Equi v al entuni t s( b) Uni tcost s[ ( a)÷( b) ] Cost st obeaccount edf or Wor ki npr ocess,August1 St a r t e di nt opr oduc t i on T ot alcost s CostReconci l i at i onSchedul e Cost saccount edf or Tr ansf er r edout Wor ki npr ocess,August1 Conver si oncost st ocompl et e be gi nni ngi nv ent or y( 2 00×$ 1. 4 5) St ar t edandcompl et ed ( 1 , 0 00×$ 2. 4 5) Wor ki npr ocess,August31 Ma t e r i a l s( 6 00×$ 1) Conver si oncost s( 300×$1. 45) * ( $ 1, 6 00+$ 1, 1 75+$ 1, 0 00 )
Physi cal Uni t s
Equi v al entUni t s Conver si on Mat er i al s Cost s
( St ep1)
( St ep2)
500 1, 600 2, 100 500 1, 000 600 2, 100
0 1, 000 600 1, 600
200 1, 000 300 1, 500
Mat er i al s
Conver si on Cost s
$1 , 60 0 1, 600 $ 1. 00
$ 2, 17 5 1, 500 $ 1. 45 $ 1, 12 5 3 , 77 5* $ 4, 90 0
$1 , 12 5 290 2, 450 $ 600 435
$ 3, 86 5 1, 035 $ 4, 90 0
