8. Montell Inc. produces a variety of outdoor equipment products and utilizes a process costing system.
The following information was provided by the accounting department as of March 31, 20xx:
a. Units started during the month of March totaled 314,000.
b. Units partially complete as of March 31 equaled 76,000.
c. Ending work in process inventory as of March 31, 20xx, was 80 percent complete.
d. Direct materials are added at the beginning of the process, and conversion costs are incurred
uniformly throughout the process.
e. No units were in process on March 1, 20xx.
Using the information provided, compute the equivalent units of production for direct materials and
conversion costs for the month ended March 31, 20xx, assuming a FIFO costing flow.
9. Jackson Electronics, Inc., manufactures a variety of microelectronic component parts and utilizes a
process costing system. The following information was provided by the accounting department as of
July 31, 2010:
a. Units started during the month of July totaled 118,200.
b. Units partially complete as of July 31 equaled 7,400.
c. Ending work in process inventory as of July 31, 2010, was 70 percent complete.
d. Direct materials are added at the beginning of the process, and conversion costs are incurred
uniformly throughout the process.
e. Units in process on July 1, 2010 – 8,200 units.
Using the information provided, compute the equivalent units of production for direct materials and
conversion costs for July using the average costing method.
10. Trunkey Products, Inc., uses a process costing system and has just completed production for the month
of November 20xx. The following production data were obtained from the accounting records:
a. Units in beginning inventory totaled 6,800 and were 30 percent complete as of November 1 (all
direct materials were added to these products in the preceding month).
b. During the period, 156,200 units were started.
c. 19,200 units were partially completed as of November 30, 20xx.
d. Ending work in process inventory was 40 percent complete at month end.
From the data given, compute the equivalent units of production for direct materials and conversion
costs for the month ended November 30, 20xx, assuming the company follows average costing
method.
11. Use the following information to perform the calculations requested below, assuming that the average
costing approach to a process costing system is being used.
Beginning work in process inventory: 6,000 units, 100 percent complete as to direct materials, 75
percent complete as to conversion costs
Ending work in process inventory: 18,000 units, 100 percent complete as to direct materials, 65
percent complete as to conversion costs
Units started during the month: 44,000
a. Calculate units completed and transferred out during the month.
b. Calculate units to be accounted for during the month.
c. Calculate equivalent units for conversion costs.
d. Calculate equivalent units for direct materials.
12. Cancun Company uses a FIFO process costing system.
Cancun Company
Equivalent Production
November
Physical
Units
Beginning inventory
2,350
Equivalent Units
Units started this period
10,120
Direct
Materials
%
Conversion
Costs
%
Units to be accounted for
12,470
Beginning inventory
2,350
Units started and completed
9,120
Ending inventory
1,000
Units accounted for
12,470
The following costs relate to work in process during November:
Beginning inventory
Direct materials
$7,200
Direct labor
380
Overhead
630
Current month’s costs
Direct materials
$51,612
Direct labor
21,562
Overhead
32,342
At the end of the last period, all direct materials had been added, and the units were 40% complete for
conversion costs.
At the end of this period, all direct materials for the 1,000 units had been added, and 70% of
conversion costs had been incurred.
Prepare a process report for November, and identify the amount to be transferred.
Physical Units
Beginning inventory
13. Data for Orlando Company for the month of June 20xx are as follows:
Beginning work in process inventory:
Operations for the month of June:
Units—800
Units started—14,000
Direct materials—100% complete
Direct materials costs—$57,400
Conversion costs—70% complete
Conversion costs—$50,122
Direct materials costs—$2,860
Conversion costs—$2,150
Ending work in process inventory:
Units—1,500
Direct materials—100% complete
Conversion costs—30% complete
Assume the company uses a FIFO flow of costs.
a. Prepare a process cost report for July.
b. Identify the amount that should be transferred out of the Work in Process Inventory account, and
state where those dollars should be transferred.
Beginning inventory
completed
Ending inventory
Units accounted for
Beginning inventory
Current costs
Total costs
Total costs
14. Susan’s Plastics, Inc., manufactures a line of office desk accessories. The company’s newest and most
popular product is a plastic paper holder for holding the paper up while working at the computer.
Production began on February 1, 20xx. Plastic is poured into molds to form the product, and the entire
process takes place in the Molding Department. After the liquid plastic is poured (signifying the
beginning of the process), the molds must be cooled slowly before the paper holder is separated from
the mold. Statistics for 20xx are shown below.
Beginning inventory
0
Units started
77,000
Costs: Direct materials costs
$246,400
Conversion costs
$334,840
Units completed and transferred to the
Packaging Department
72,500
Ending work in process inventory: All direct materials were added at the beginning of the process, and
the average stage of completion of these units as to conversion costs is 80 percent.
No units were lost or spoiled during the year.
a. Prepare a process cost report using the FIFO costing method for the Molding Department using
five steps. Include T accounts to recap both costs and units for the Work in Process Inventory account.
b. Identify the amount to be transferred out of Work in Process Inventory and prepare the necessary
entry in journal form to do so.
a.
Current costs
Total costs
Cost per equivalent unit
From beginning
inventory
Cost of goods
manufactured
Total costs
b. Transfer $_________ to __________ and prepare the necessary journal entry in good form to make
the transfer.
15. Surf’s Up manufactures surfboards. Production has just been completed for May 20xx. The beginning
balances in Work in Process Inventory were direct materials costs, $31,400, and conversion costs,
$16,400. Cost of direct materials used in March was $394,800, and March’s conversion costs were
$598,400. A schedule of equivalent production for March has already been prepared. It shows a total
of 9,400 equivalent units as to direct materials and 8,800 equivalent units as to conversion costs.
From this information, compute the cost per equivalent unit for May. Use the FIFO costing method.
Total Costs
Direct
Materials
Conversion
Costs
Cost per equivalent unit
$42.00
16. Data for Osaka Corporation for the month of June 20xx are as follows:
Beginning work in process inventory:
Operations for the month of June:
Units—800
Units started—14,000
Direct materials—100% complete
Direct materials costs—$57,400
Conversion costs—70% complete
Conversion costs—$50,122
Direct materials costs—$2,860
Conversion costs—$2,150
Ending work in process inventory:
Units—1,500
Direct materials—100% complete
Conversion costs—30% complete
Assume the company uses average costing method.
Prepare a process cost report for June.
