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:
5,000
$20,000
$24,000
$ 4,000
During June, 80,000 units were completed and transferred to packaging.
The following costs were incurred by the mixing department during June:
$180,000
200,000
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.
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.
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:
15,000
$ 4,000
$ 3,000
$ 2,376
During June, 100,000 units were completed and transferred to packaging.
The following costs were incurred by the mixing department during June:
$50,000
30,000
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.
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.
F.
Determine the equivalent units of production for June if ending inventory had been
80% complete.
Figure 6-8.
Department A had the following data for October:
0
2,000
1,200
$6,608
6. Refer to Figure 6-8.
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.
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.
What is the cost of goods transferred out?
B.
What is the cost of ending work-in–process inventory?
$2.80 2,000
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.
Prepare a physical flow schedule.
B.
Compute equivalent units using the weighted average method.
Units accounted for:
Started and completed
75,000
25,000
100,000
Units in ending work in process
Total units accounted for
115,000
Equivalent units:
Conversion
Cost
Units completed
100,000
100,000
Units in EWIP Fraction complete:
Materials (15,000 100%)
Conversion (15,000 40%)
115,000
106,000
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.
Compute the unit cost for December using the weighted average method.
B.
Determine the cost of goods transferred out.
C.
Determine the cost of ending work in process.
Cost per equivalent unit:
Materials = ($14,000 + $34,000)/12,000 = $4.00
Total unit cost = $10.00 per equivalent unit
Cost of goods transferred out = $10 10,000 = $100,000
= $8,000 + $3,000 = $11,000
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.
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:
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.
Prepare a physical flow schedule.
B.
Compute equivalent units using the weighted average method.
C.
How would your answer change in part B if the beginning work in process consisted of
200 units that were 80% complete with respect to conversion?
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)
10,000
50,000
8,000
The costs in work in process at May 1 in the mixing department were as follows:
Mixing
Department
$15,000
20,000
17,600
$52,600
The costs added by the mixing department during the month of May were as follows:
Mixing
Department
$ 90,000
120,000
100,000
$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.
Units in EWIP Fraction complete:
Unit cost for conversion:
$4.60
Costs to account for:
Costs added
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:
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
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.
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.
Determine the cost of the goods transferred out.
B.
Determine the cost of ending work in process.
C.
Determine the cost of the goods transferred out if materials in ending work in process
had been 90% complete and conversion in ending work in process had been 70%
complete. Round costs per unit to 2 decimals if necessary.
Cost 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.
Prepare a physical flow schedule.
B.
Compute equivalent units using the FIFO method.
Units to account for:
Units started
Units completed and transferred out:
Started and completed
Units in ending work in process
Cost of ending work in process:
Materials equivalent units = 50,000 + (9,000 .9) = 58,100
Conversion equivalent units = 50,000 + (9,000 .7) = 56,300
Conversion cost per unit = $57,200/56,300 = $1.02
Cost of units transferred out = 50,000 ($1.27 + $1.02) = $114,500
17. List the five steps in preparing a production report.
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:
10,000
39,000
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:
Total materials cost for period
$38,500/60,000 units = cost per equivalent unit
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.
Units started and completed
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?