Chapter 18(3): Process Cost Systems
157.
The cost per equivalent units of direct materials and conversion in the Bottling Department of Beverages on
Jolt
Company is $0.47 and $0.15, respectively. The equivalent units to be assigned costs are as follows.
Direct Materials
Conversion
Inventory in process, beginning of period
0
3,000
Started and completed during the period
52,000
52,000
Transferred out of Bottling (completed)
52,000
55,000
Inventory in process, end of period
3,500
2,100
Total units to be assigned costs
55,500
57,100
The beginning work in process inventory had a cost of $3,500. Determine the cost of completed and transferred
out
production, and the ending work in process inventory.
Inventory in process, balance
158.
Alexandra Company’s Molding Department opened on July 1. During July, 70.000 units were completed
and
transferred out to the next department. On July 31, the 10,000 units which remained in inventory were
40%
complete with respect to conversion costs and 100% complete with respect to materials.
How many equivalent units of work did the Molding Department complete during July for materials and
conversion
costs?
159.
Kramer Company started its production operations on August 1. During August, the Printing Department
completed 17,600 units. There were 4,400 units in ending inventory which were 80% complete with respect
to
materials and 10% complete with respect to conversion costs. During August, the department
accumulated
materials costs of $45,408 and conversion costs of $76,670.
Required:
(a)
Calculate the cost of the goods transferred out.
(b)
What is the value of the ending inventory?
160.
The inventory at June 1 and costs charged to Work in Process—Department 60 during June are as follows:
3,800 units, 60% completed
$ 60,400
Direct materials, 32,000 units
378,000
Direct labor
274,000
Factory overhead
168,000
Total cost to be accounted for $880,400
During June, 32,000 units were placed into production and 31,200 units were completed, including those in
inventory
on June 1. On June 30, the inventory of work in process consisted of 4,600 units which were 85%
completed. Inventories are costed by the first-in, first-out method and all materials are added at the beginning of
the process.
Determine the following: (Round unit cost data to four decimal places, i.e., $4.4444, to minimize rounding
differences).
(a)
Equivalent units of production for conversion cost
(b)
Conversion cost per equivalent unit
(c)
Total and unit cost of finished goods started in prior period and completed in the current period
(d)
Total and unit cost of finished goods started and completed in the current period
(e)
Total cost of work in process inventory, June 30
161.
Stevens Company’s inventory on March 1 and the costs charged to Work in Process—Department B during March
are as follows:
Beginning work in process, 12,000 units, 60% completed
$ 62,400
From Department A, 55,000 units started this period
Direct materials added
115,500
Direct labor incurred
384,915
Factory overhead incurred
138,000
During March, all direct materials were transferred from Department A, the units in process at March 1 were
completed, and of the 55,000 units entering the department, all were completed except 6,000 units which were
70%
completed. Inventories are costed by the first-in, first-out method.
Prepare a cost of production report for March. Round unit cost data to four decimal places and total cost to nearest
cent.
Chapter 18(3): Process Cost Systems
162.
Austin Co. manufactures a product called Aster in a three-process series. All materials are introduced at the
beginning of the first process. Austin uses the first-in, first-out method of inventory costing. Unit and cost data
for
the first process (Department A) for the month of December follow:
Units
Completion
Cost
Work in process inventory:
December 1
12,000
60%
$140,400
December 31
5,000
40%
?
Started in December:
14,000
Direct materials cost
106,400
Conversion cost
70,310
Completed in December
21,000
?
Prepare Austin’s Department A cost of production report for December.
Units charged to production:
12,000
storeroom
14,000
26,000
Units to be assigned costs:
9,000
21,000
13,800
Total units to be assigned costs
26,000
14,000
15,800
163.
Erin Company’s inventory at December 1, and the costs charged to Work in Process—Department B during
December are as follows:
1,200 units, 40% completed
$ 47,800
From Department A, 26,000 units
845,000
Direct labor
312,000
Factory overhead
176,770
During December, all direct materials are transferred from Department A, the units in process at December 1
were completed, and of the 26,000 units entering the department, all were completed except 1,000 units which
were
70% completed as to conversion costs. Inventories are costed by the first-in, first-out method.
Prepare a cost of production report for December.
Chapter 18(3): Process Cost Systems
164.
Everett Company’s inventory at December 31, and the costs charged to Work in Process—Department B during
December are as follows:
500 units, 60% completed
$ 3,460
From Department A, 10,000 units
36,300
Direct labor
7,960
Factory overhead
12,500
During December, all direct materials are transferred from Department A, the units in process at December 1
were completed. Of the 10,000 units entering the department, all were completed except 1,200 units which
were
25% completed as to conversion costs. Inventories are costed by the first-in, first-out method.
Prepare a cost of production report for December.
Chapter 18(3): Process Cost Systems
165.
Information for the Nichols Manufacturing Company for the month of May is as follows:
Beginning work in process:
Cost of Inventory at process, May 1
$5,010
Units, 800
Direct materials, 100% complete
Conversion costs, 70% complete
Units started in May, 14,000
Ending work in process inventory:
Costs charged to Work in Process during May :
Units, 1,500
Direct materials costs, $57,400
Direct materials, 100% complete
Direct labor costs, $20,049
Conversion costs, 30% complete
Factory overhead costs, $30,073
Prepare a cost of production report for the month of May, using the FIFO method.
Chapter 18(3): Process Cost Systems
166.
Eagle Co. manufactures bentwood chairs and tables. Wood for both products is steam-bent in the same
process,
but different types of wood are used for each product. Thus, materials cost is identified separately to
each
product. One production cycle uses 20 board feet. Labor cost is identified to the process as a whole, as is
overhead cost. Data for the month of July follow:
Chairs
Tables
Direct material cost per board foot
$3.60
$4.20
Number of parts formed per
production
cycle (20 board feet)
10
8
Actual operating hours in July
120
380
Parts produced during July
4,000
9,000
Budgeted annual conversion cost:
Labor
$150,000
Utilities
125,000
Depreciation
65,000
Other overhead
50,000
Total
$390,000
Budgeted annual operating hours
for
steam-bending
5,200
(a)
Compute July’s predetermined rate for the steam-bending process
(b)
Compute July’s direct material costs for chairs and tables
(c)
Compute conversion costs to be applied to chairs and tables in July
(d)
Journalize the following entries:
(1)
Assignment of direct materials to chairs and tables
(2)
Application of conversion costs to chairs and tables
(3)
The transfer of completed chairs and tables to the Finishing Department. All of July’s
production was completed in July.
Chapter 18(3): Process Cost Systems
167.
Tough Hardware purchases raw materials and processes those purchases through a receiving/inspection process
prior to stocking for production. Tough places 3 purchase orders for materials for production and receives the
goods
that day. The first PO is for 2,500 1/2” × 96” milling blanks at $2.75 each. The second is for 4,000 pieces of
48” × 96” × 1” sheet steel at $15.55 each. The third PO is for five 5 gallon drums of milling lubrication oil at
$475.00 per barrel.
The receiving/inspection process is completed and the goods are transferred from Receiving Inventory to Raw
Materials. The Receiving/Inspection Department assigns manufacturing overhead of $55.00 per purchase order
as
well as $2.75 per piece on metal goods and $35.00 per container on fluids. All labor is allocated through
overhead.
(a)
Write the journal entry to purchase and receive these items to Receiving Inventory on account.
(b)
Assign overhead to the metal goods.
(c)
Assign overhead to the fluid goods.
(d)
Transfer all goods to Raw Materials Inventory.
168.
The Brass Works is in the process of determining manufacturing overhead. Journalize events (a) – (d) to
Factory
Overhead, Administrative Expenses, Selling expenses, or allocated between the three as appropriate.
All items
were paid in cash at the time of acquisition. Next calculate the overhead application rate and apply
overhead to
Work in Process.
(a)
Brass Works purchases an insurance policy for $4,000. It is computed that 80% of the
value of the policy protects production, the balance protects the administrative
offices.
Brass Works charges insurance initially to expense.
(b)
The electric bill is received showing an amount due of $1,200. This meter is utilized
only
by production as the office spaces have their own meter.
(c)
Payroll reports that the sales manager’s salary for the period is $3,500 and that production
Supervisor’s wages for the period are $5,500.
(d)
The stockroom reports that $2,575 in materials were purchased for the production
Maintenance Department.
(e)
If the driver for the application of overhead is drop-forge strokes and there are expected
to be 1,000 strokes in this period, what is the rate per stroke? Do not round your
answer.
(f)
Assuming that there are 1,150 drop-forge strokes in this period, apply factory overhead
to
Work in Process. Round your answers to nearest dollar.
Round overhead rate to four decimal places and total cost to nearest dollar.