Exercise 16-10 (20 minutes)
1.
Units Units
Units in beginning inventory 60,000 60,000 60,000
2.
Equivalent units of production – FIFO
Direct
Materials Conversion
Complete beginning inventory (60,000 x 40% Mtl, 60% Conv.) 24,000 36,000
Units started and completed (240,000 x 100%) 240,000 240,000
Units of ending work in process
Exercise 16-11 (20 minutes)
1.
Cost per equivalent unit – FIFO
Direct
Materials Conversion
Costs incurred this period 850,368 649,296
Exercise 16-11 (continued)
2.
Cost assignment and reconciliation – FIFO
Cost of 60,000 units from beginning inventory
Beginning inventory $ 167,066
Materials to complete (24,000 EUP x $2.58 per EUP) 61,920
Conversion to complete (36,000 EUP x $2.16 per EUP) 77,760 139,680
Total cost of 60,000 units from beginning inventory $ 306,746
Costs to be assigned:
Beginning inventory $167,066
Direct materials – current period 850,368
Conversion costs – current period 649,296
Total costs to be assigned $1,666,730
Dept. 1 – WIP
Beg. Inv 167,066
DM 850,368
Conv 649,296
Financial and Managerial Accounting, 6th Edition
Exercise 16-12 (30 minutes)
ASHAD COMPANY
Process Cost Summary – Weighted Average Method
For Month Ended July 31
Costs Charged to Production
Costs of beginning work in process ($18,550 + $2,280)……………….……..$ 20,830
Costs incurred this period ($357,500 + $188,670)…………………………….… 546,170
Total costs to account for…………………….…………………….……………………..$567,000
Unit Information
Equivalent Units of Production (EUP)
Direct
Materials Conversion
Units completed and transferred out………32,000 EUP 32,000 EUP
Units of ending work in process…..……….. 2,500 EUP 1,500 EUP
Equivalent units of production……………….34,500 EUP 33,500 EUP
Cost per EUP
Direct
Materials Conversion
Costs of beginning work in process………. $ 18,550 $ 2,280
EUP
EUP
Cost Assignment and Reconciliation
Costs transferred out
Direct materials (32,000 x $10.90)………………………….…….$348,800
Conversion (32,000 x $5.70)…………………………………….…. 182,400
Total transferred out $531,200
Cost of ending work in process
Exercise 16-13 (40 minutes)
ASHAD COMPANY
Process Cost Summary – FIFO Method
For Month Ended July 31
Costs Charged to Production
Costs of beginning work in process
Direct materials……..…………………………………….………….. $ 18,550
Conversion………..……………………………………….………….... 2,280 $ 20,830
Costs incurred this period
Unit cost information
Units to account for Units accounted for
Beginning work in process………..…….……….………2,000 Completed & transferred out….…..... 32,000
Equivalent units of production
Direct
Materials
Conversion
Units to complete beginning WIP
Direct materials (2,000 x 0%)………….……………. 0 EUP
Units of ending work in process
Direct materials…………………..………….…………..
2,500 EUP
Conversion………………..……………….……………….
_________ 1,500 EUP
Equivalent units of production….….……………....
32,500 EUP 33,100 EUP
[Continued on next page]
Financial and Managerial Accounting, 6th Edition
Exercise 16-13 (Concluded)
Cost per EUP
Direct
Materials
Conversio
n
Costs incurred this period…............... $ 357,500 $ 188,670
EUP
EUP
Cost assignment and reconciliation
Costs transferred out
Direct materials (0 EUP x $11.00 per EUP)….…....... $ 0
Conversion (1,600 EUP x $5.70 per EUP)…............. 9,120 9,120
Costs of units started and completed this period
Direct materials (2,500 EUP x $11.00 per EUP)....... 27,500
Conversion (1,500 EUP x $5.70 per EUP)…............. 8,550 36,050
Total costs accounted for…………….….…….……………. $567,000
Exercise 16-14 (30 minutes)
Part 1: Cost of goods transferred and cost of goods sold
Weaving Sewing Finished
Department Department Goods
Beginning inventory……………..……………… $ 300,000 $ 570,000 $1,266,000
Total costs—Weaving………………………… 2,700,000
Less ending inventory—Weaving…….…. (330,000 )
TRANSFERRED TO SEWING (a)…………….…..… $2,370,000 2,370,000
Less ending inventory—Finished goods.... (1,206,000 )
COST OF GOODS SOLD (c) …………………….… $3,275,000
Part 2: Summary journal entries.
June 30 Work in Process Inventory—Sewing ………………………2,370,000
Work in Process Inventory—Weaving……………….. 2,370,000
Transferred products from weaving to sewing.
Sold finished goods.
June 30 Cost of Goods Sold ………………..……………………..….…..3,275,000
Finished Goods Inventory ……………………..….…….. 3,275,000
To record cost of goods sold for the month.
Financial and Managerial Accounting, 6th Edition
Exercise 16-15 (25 minutes)
Summary journal entries (all dated June 30)
a. Raw Materials Inventory ………………..……………….……..500,000
Accounts Payable ……………..….………..………………. 500,000
Purchased raw materials.
d. Work in Process Inventory—Weaving …………………….1,200,000
Work in Process Inventory—Sewing ………………………360,000
Factory Payroll Payable ………………………………..…. 1,560,000
Used direct labor.
g. Work in Process Inventory—Weaving …………………….960,000
Work in Process Inventory—Sewing ………………………540,000
Factory Overhead………….…………………………………. 1,500,000
Applied overhead using predetermined
rates.
Exercise 16-16 (25 minutes)
ELLIOTT COMPANY
Process Cost Summary – Weighted Average Method
For Month Ended March 31
Costs Charged to Production
Costs of beginning work in process
Direct materials……………..………………..……………….……… $ 2,500
Conversion………………..……………….………………………….… 6,360 $ 8,860
Costs incurred this period
Unit information
Units to account for Units accounted for
Beginning work in process………………..…….……….2,000 Completed & transferred out..………...17,000
Units started this period………….………………………..20,000 Ending work in process…………..….. 5,000
Total units to account for………………..…….……….…22,000 Total units accounted for……………..22,000
Direct
Cost per EUP
Direct
Materials Conversion
Cost of beginning work in process.... $ 2,500 $ 6,360
Costs incurred this period…............... 168,000 479,640
Total costs……………….………………….... $170,500 $486,000
Financial and Managerial Accounting, 6th Edition
Exercise 16-16 (continued)
Cost assignment and reconciliation
Costs transferred out
Direct materials (17,000 EUP x $7.75 per EUP)....... $131,750
Total costs accounted for…………….….…….……………. $656,500
Exercise 16-17 (40 minutes)
OSLO COMPANY
Process Cost Summary – Weighted Average Method
For Month Ended May 31
Costs Charged to Production
Costs of beginning work in process
Total costs to account for…………………….…………………….. $440,350
Unit information
Units to account for Units accounted for
Beginning work in process.............4,000 Completed & transferred out…………..……………….............13,000
Exercise 16-17 (Concluded)
Equivalent units of production
Direct
Materials Conversion
Units completed & transferred out…........13,000 EUP 13,000 EUP
Cost per EUP
Direct
Materials
Conversio
n
Cost of beginning work in process.......... $ 2,880 $ 5,358
Costs incurred this period…………..……….. 197,120 234,992
Cost per EUP………………………….……….…..$12.50 per
EUP
$17.48 per
EUP
Cost assignment and reconciliation
Costs transferred out
Direct materials (13,000 EUP x $12.50 per EUP)..... $162,500
Conversion (13,000 x $17.48 per EUP)………………… 227,240 $389,740
Costs of ending work in process
Exercise 16-18 (10 minutes)
Equivalent units of production—FIFO
Units of Percent Equivalent
EUP (for materials and conversion) Product Added Units
Beginning work in process............. 30,000 70% 21,000 EUP
Goods started and completed……… 120,000 100 120,000 EUP
Financial and Managerial Accounting, 6th Edition