121. 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.
Determine the cost of the goods transferred out.
b.
Determine the cost of ending work in process.
Cost of goods transferred out = $8.00 ´ 90,000 = $720,000
Cost of ending work in process:
Materials (4,000 ´ $5.00)
$20,000
Conversion (1,200 ´ $3.00)
3,600
Total cost
$23,600
122. 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 percent complete with respect to conversion.
Ending work in process consisted of 500 units that were 10 percent complete with respect to conversion.
During the month, 3,000 units were started in process.
Required:
a.
Prepare a physical flow schedule.
b.
Compute equivalent units using the weighted average method.
Units to account for:
Units started
3,000
Units accounted for:
Units completed and transferred out:
Started and completed
2,500
From beginning work in process
200
2,700
Units in ending work in process
500
Total units accounted for
3,200
Equivalent units:
Materials
Conversion Cost
Units completed
2,700
2,700
Units in EWIP ´ Fraction complete:
Materials (500 ´ 100%)
500
Conversion (500 ´ 10%)
50
Equivalent units of output
3,200
2,750
123. 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
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.
Prepare a physical flow schedule for the mixing department for May.
b.
Using the weighted average method, determine the equivalent units of production for materials and conversion for the mixing
department for May.
c.
Using the weighted average method, determine the cost per equivalent unit of production for materials and conversion for the mixing
department for May.
d.
Using the weighted average method, determine the cost of goods transferred out and the cost of ending work in process for the mixing
department.
for
124. 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 percent complete remained in the mixing department.
Use the weighted average method, and round unit costs to two decimal places.
Required:
a.
Determine equivalent units of production for June.
b.
Determine June’s total costs to account for.
c.
Determine total cost per equivalent unit of production.
d.
Determine the cost of goods transferred to the packaging department.
e.
Determine the cost of June’s ending work in process for the mixing department.
a.
105,600
Units accounted for:
Physical Flow
Equivalent Units
Units completed
100,000
100,000
Units in EWIP (70% complete)
8,000
5,600
Total units accounted for
108,000
105,600
b.
$101,376
Costs to account for:
Manufacturing Costs
Beginning work in process
($4,000 + $3,000 + $2,376)
$ 9,376
Costs added
($50,000 + $30,000 + $12,000)
92,000
Total costs to account for
$101,376
c.
$0.96 ($101,376/105,600)
125. 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
Manufacturing costs incurred during the month:
Materials: $75,000
Conversion: $60,000
Required:
a.
Compute the unit cost for January using the weighted average method.
b.
Determine the cost of goods transferred out.
c.
Determine the cost of ending work in process.
a.
Cost per equivalent unit:
Materials = ($68,000 + $75,000)/130,000 = $1.10
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
c.
Cost of ending work in process = (10,000 ´ $1.10) + (4,000 ´ $0.75)
= $11,000 + $3,000 = $14,000
126. 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.
Determine the cost of the goods transferred out.
b.
Determine the cost of ending work in process.
b.
Cost of ending work in process:
Conversion (7,200 ´ $1.00)
7,200
Total cost
$18,450
127. 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 percent complete with respect to conversion.
Ending work in process consisted of 15,000 units that were 40 percent complete with respect to conversion.
During the month, 90,000 units were started in process.
Required:
a.
Prepare a physical flow schedule.
b.
Compute equivalent units using the weighted average method.
128. List the five steps in preparing a production report.
1. Physical unit flow analysis
2. Calculation of equivalent units
3. Computation of unit cost
4. Valuation of inventories (goods transferred out and ending work in process)
5. Cost reconciliations
Physical flow schedule:
Units to account for:
Units in beginning work in process
25,000
Units started
90,000
Total units to account for
115,000
Units accounted for:
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
15,000
Total units accounted for
115,000
Equivalent units:
Materials
Conversion Cost
Units completed
100,000
100,000
Units in EWIP ´ Fraction complete:
Materials (15,000 ´ 100%)
15,000
Conversion (15,000 ´ 40%)
6,000
Equivalent units of output
115,000
106,000
129. Figure 5-8.
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
Refer to Figure 5-8:
a. Calculate the equivalent units of production in ending work-in-process inventory.
b. Calculate total equivalent units of production for Department A for October.
130. Figure 5-8.
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
Refer to Figure 5-8:
What is the unit manufacturing cost for Department A for October?
131. Figure 5-8.
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
Refer to Figure 5-8:
a. What is the cost of goods transferred out?
b. What is the cost of ending work-in-process inventory?
132. Describe the differences between process costing and job-order costing.
133. Describe the differences in the ways that prior-period costs and output are treated under the weighted
average method and the FIFO method?
134. Describe how process costing for services differ from process costing for manufactured goods?
135. Explain the role of the departmental production report in process costing and name the five steps for
completing the departmental production report.
136. Explain how nonuniform inputs and multiple departments affect process costing.