4. Barr Inc., manufactures a product that passes through two processes: mixing and packaging. All
manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for June follows:
Work in process, June 1
Units (60% complete)
5,000
Direct materials
$20,000
Direct labor
$24,000
Overhead
$ 4,000
During June, 80,000 units were completed and transferred to packaging.
The following costs were incurred by the mixing department during June:
Direct materials
$180,000
Direct labor
200,000
Overhead
59,200
At June 30, 12,000 units that were 10% complete remained in the mixing department.
Use the weighted average method and round unit costs to two decimal places.
Required:
A.
B.
C.
D.
E.
5. Star Inc., manufactures a product that passes through two processes: mixing and packaging. All
manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for June follows:
Work in process, June 1:
Units (30% complete)
15,000
Direct materials
$ 4,000
Direct labor
$ 3,000
Overhead
$ 2,376
During June, 100,000 units were completed and transferred to packaging.
The following costs were incurred by the mixing department during June:
Direct materials
$50,000
Direct labor
30,000
Overhead
12,000
At June 30, 8,000 units that were 70% complete remained in the mixing department.
Use the weighted average method, and round unit costs to two decimal places.
Required:
A.
B.
C.
D.
E.
F.
Figure 6-8.
Department A had the following data for October:
Units in beginning work in process
0
Units Completed
2,000
Units in ending work in process (30% complete)
1,200
Total manufacturing cost
$6,608
6. Refer to Figure 6-8.
A.
B.
Units
7. Refer to Figure 6-8. What is the unit manufacturing cost for Department A for October?
8. Refer to Figure 6-8.
A.
B.
9. Harley Company manufactures a product that passes through two processes. The following
information is available for the first department for October.
All materials are added at the beginning of the process.
Beginning work in process consisted of 25,000 units that were 80% complete with respect to
conversion.
Ending work in process consisted of 15,000 units that were 40% complete with respect to conversion.
During the month, 90,000 units were started in process.
Required:
A.
B.
10. King Corporation produces a product that passes through two departments. For December, the
following equivalent unit schedule was prepared for the first department:
Materials
Conversion
Cost
Units completed
10,000
10,000
Units in EWIP Fraction complete:
Materials (2,000 100%)
2,000
Conversion (2,000 25%)
500
Equivalent units of output
12,000
10,500
Costs assigned to beginning work in process:
Materials:
$14,000
Conversion:
$20,000
Manufacturing costs incurred during the month:
Materials:
$34,000
Conversion:
$43,000
Required:
A.
B.
C.
Units completed and transferred out:
Started and completed
75,000
From beginning work in process
25,000
100,000
Units in ending work in process
Total units accounted for
115,000
Equivalent units:
Conversion
Materials
Cost
Units completed
100,000
100,000
Units in EWIP Fraction complete:
Materials (15,000 100%)
Conversion (15,000 40%)
Equivalent units of output
115,000
106,000
11. Royal, Inc., manufactures products that pass through two or more processes. The company uses the
weighted average method to compute unit costs. During April, equivalent units were computed as
follows:
Materials
Conversion
Cost
Units completed
90,000
90,000
Units in EWIP Fraction complete:
Materials (4,000 100%)
4,000
Conversion (4,000 30%)
1,200
Equivalent units of output
94,000
91,200
The unit cost was computed as follows:
Materials
$5.00
Conversion cost
3.00
Total cost per unit
$8.00
Required:
A.
B.
12. Indigo Inc., manufactures a product that passes through two processes. The following information is
available for the first department for September.
All materials are added at the beginning of the process.
Beginning work in process consisted of 200 units that were 60% complete with respect to conversion.
Ending work in process consisted of 500 units that were 10% complete with respect to conversion.
During the month, 3,000 units were started in process.
Required:
A.
B.
C.
13. Delilah, Incorporated, manufactures quality hair care products. The ingredients are combined in the
mixing department and put in 16-ounce containers in the packaging department.
The following information pertains to the mixing department for the month of May:
Units
(Gallons)
Work in process, May 1
(100% complete materials,
75% labor and overhead)
10,000
Started during May
50,000
200
500
Work in process, May 31
(100% complete materials,
50% labor and overhead)
8,000
The costs in work in process at May 1 in the mixing department were as follows:
Mixing
Department
Work in process, May 1:
Materials
$15,000
Direct labor
20,000
Manufacturing overhead
17,600
Total costs
$52,600
The costs added by the mixing department during the month of May were as follows:
Mixing
Department
Materials
$ 90,000
Direct labor
120,000
Manufacturing overhead
100,000
Total costs added
$310,000
Round unit costs to two decimal places.
Required:
A.
B.
C.
D.
Physical flow schedule:
Units to account for:
Units in beginning work in process
Units started during May
Total units to account for
Units accounted for:
Units completed and transferred out:
Started and completed
From beginning work in process
Units in ending work in process
Total units accounted for
Equivalent units of production—materials:
Equivalent units of production—conversion:
14. AL Corporation produces a product that passes through two departments. For January, the following
equivalent unit schedule was prepared for the first department:
Materials
Conversion
Cost
Units completed
120,000
120,000
Units in EWIP Fraction complete:
Materials (10,000 100%)
10,000
Conversion (10,000 40%)
4,000
Equivalent units of output
130,000
124,000
Costs assigned to beginning work in process:
Materials:
$68,000
Conversion:
$33,000
Units completed
Units in EWIP Fraction complete:
Materials (8,000 100%)
Conversion (8,000 50%)
Total equivalent units
Unit cost for materials:
$1.75
Unit cost for conversion:
$4.60
Costs to account for:
Beginning work in process
Costs added
Total costs to account for
Divided by equivalent units
Cost per equivalent unit
Costs of goods transferred out:
$330,200
Cost of ending work in process:
$ 32,400
Costs accounted for:
Units transferred out
(52,000 $6.35)
Ending work in process:
Conversion (4,000 $4.60)
Total costs accounted for
Manufacturing costs incurred during the month:
Materials:
$75,000
Conversion:
$60,000
Required:
A.
B.
C.
15. Mermain Inc., manufactures products that pass through two processes. The company uses the weighted
average method to compute unit costs. During March, equivalent units were computed as follows:
Materials
Conversion
Cost
Units completed
50,000
50,000
Units in EWIP Fraction complete:
Materials (9,000 100%)
9,000
Conversion (9,000 80%)
7,200
Equivalent units of output
59,000
57,200
Cost was added as follows:
Materials
$ 73,750
Conversion cost
57,200
Total cost
$130,950
Required:
A.
B.
C.
Cost per equivalent unit:
Conversion = ($33,000 + $60,000)/124,000 = $0.75
Total unit cost = $1.85 per equivalent unit
Cost of goods transferred out = $1.85 120,000 = $222,000
= (10,000 $1.10) + (4,000 $0.75)
= $11,000 + $3,000 = $14,000
16. Davidson Company manufactures a product that passes through two processes. The following
information is available for the first department for October.
All materials are added at the beginning of the process.
Beginning work in process consisted of 20,000 units that were 80% complete with respect to
conversion.
Ending work in process consisted of 15,000 units that were 40% complete with respect to conversion.
During the month, 90,000 units were started in process.
Required:
A.
B.
17. List the five steps in preparing a production report.
ANS:
18. Titan Manufacturing uses a process cost system. The following information pertains to operations for
the month of December.
Units
Beginning work-in-process inventory, December 1
7,000
Started in production during December
185,000
Completed production during December
93,500
Ending work-in-process inventory, March 31
98,500
The beginning inventory was 80% complete for materials and 40% complete for conversion costs. The
ending inventory was 85% complete for materials and 30% complete for conversion costs.
Costs pertaining to the month of December are as follows:
Beginning inventory costs are: materials, $38,200; conversion cost $41,400.
Costs incurred during December are: materials used, $462,300; conversion cost $602,700.
Required:
A. Using the weighted average method calculate the total equivalent units of production for direct
materials and conversion cost.
B. Using the weighted average method, calculate the unit cost of materials and conversion for
December.
C. Using the weighted average method, calculate the total cost of the units in the ending
work-in-process inventory at December 31.
19. Plemmon Company adds materials at the beginning of the process in the forming department, which is
the first of two stages of its production cycle. Information concerning the materials used in the forming
department in April follows:
Materials
Units
Costs
Work in process at April 1
15,000
$ 8,000
Units started during April
60,000
$38,500
Units completed and transferred to next department
during April
65,000
Using the FIFO method, what is the materials cost of the work in process at April 30 (round unit
calculations to the nearest cent)?
20. The Roberto Company had computed the flow of units for Department A for the month of May as
follows:
Work in process, May 1:
10,000
Started into production during May
39,000
Units to be accounted for
49,000
Beginning
Added during the
work in process
current month
Materials
$20,800
$ 97,500
Labor
5,200
34,920
Factory overhead
4,800
32,980
Total
$30,800
$165,400
Materials are added at the beginning of the process. There were 8,000 units of work in process at
May 31. The work in process at May 1 was 70% complete as to direct labor and factory overhead costs
and the work in process at May 31 was 60% complete as to direct labor and factory overhead costs.
What was the cost of the goods transferred out and in ending work in process using the FIFO method?
Beginning work in process
Started
Total
Less completed
Ending work in process (complete as to material)
Unit cost (See calculation below)
Materials cost in ending work in process
To complete beginning in process units (materials all 100%)
Units started and finished during month
(60,000 started − 10,000 in ending WIP)
Units in process, April 30 with all materials
Equivalent production for materials
Materials cost:
Costs added during June
Total materials cost for period
$38,500/60,000 units = cost per equivalent unit
$ .64
21. Garrison Inc. manufactures product where all manufacturing inputs are applied uniformly. The
company produced the following physical flow schedule for July:
Units to account for:
Units in BWIP (60% complete)
17,000
Units started
46,000
Total units to account for
63,000
Units accounted for:
Units completed:
From BWIP
17,000
Started and completed
38,000
55,000
Units, EWIP (65% completed)
8,000
Total units accounted for
63,000
Required: Prepare a schedule of equivalent units using the FIFO method.
ESSAY
1. Describe the differences between process costing and job-order costing.
2. Describe how process costing for services differs from process costing for manufactured goods.
Equivalent units of output
3. Explain the role of the departmental production report in process costing and name the five steps for
completing the departmental production report.
4. Explain how nonuniform inputs and multiple departments affect process costing.
5. Describe the differences in the ways that prior-period costs and output are treated under the weighted
average method and the FIFO method?
6. The controller has asked you do determine what method you think would be the best approach to
dealing with beginning work-in-process; weighted average costing method or FIFO costing method.
Explain the differences between the two methods. Which method would you recommend?