Exercise 16-19 (20 minutes)
[Note: Solution key is on the following page.]
Punching
Bending
Warehouse
Beginning Work in
Process
$7,500
Direct
Materials
$60,000
Direct
Labor
$12,000
Factory
Overhead
$15,000
Total costs in process in
punching department
(1) $94,500
Ending Work in
Process
$6,000
Costs transferred
to bending
(2) $88,500
Beginning Work in
Process
$9,750
Direct
Materials
(3) $83,250
Direct
Labor
$30,750
Factory
Overhead
$36,900
Total costs in process in
bending department
$249,150
Ending Work
in Process
$12,750
Costs transferred
to Finished Goods
(4) $236,400
Beginning
Inventory
$18,000
Cost of Goods Available
For Sale
(5) $254,400
Ending
Inventory
(6) $22,500
Cost of Goods
Sold
$231,900
Exercise 16-19 (Continued)
Key to solution of flowchart
(1) Beginning work in process in punching $ 7,500
Direct materials added $ 60,000
(2) Total costs in process in punching department $ 94,500
Less ending work in process 6,000
Costs transferred to bending $ 88,500
(3) Beginning work in process in bending $ 9,750
Total costs added [?]
Total costs in process in bending department $249,150
Total costs added = $249,150 – $9,750 = $239,400
Direct materials added = $239,400-$30,750-$36,900-$88,500
= $83,250
(5) Beginning Finished Goods inventory $ 18,000
Add costs transferred to finished goods 236,400
Cost of goods available for sale $254,400
Financial and Managerial Accounting, 6th Edition
Exercise 16-20 (30 minutes)
1.
Units to account for Units Accounted For
2. and 3.
Equivalent Units of Production (EUP)
Direct
Materials
Conversion
Units completed and transferred out…...…........
23,000 EUP 23,000 EUP
Units of ending work in process……………….……
4. and 5.
Cost per EUP
Direct
Materials Conversion
Costs of beginning work in process………. $ 45,000 $ 56,320
Costs incurred this period…………..……..…. 375,000 341,000
Total costs…………………………………..…..…... $420,000 $397,320
Exercise 16-20 (concluded)
6.
Costs transferred out
Direct materials [$14.00 per EUP x 23,000 EUP]....... $322,000
Conversion [$15.40 per EUP x 23,000 EUP]..…......... 354,200
Total transferred out…………………………..…..…..…..….. $676,200
7.
Exercise 16-21 (10 minutes)
1. Raw Materials Inventory ………………..………..….…..…....80,000
Accounts Payable ……………..….…..…..…..…..….…... 80,000
Purchased materials on credit.
2. Work in Process Inventory……………………….….…..…....42,000
Raw Materials Inventory ………….……..…..…..….…... 42,000
Used direct materials in production.
Financial and Managerial Accounting, 6th Edition
Exercise 16-22 (10 minutes)
Incurred indirect labor costs.
3. Factory Payroll Payable…………….………………….….…....95,000
Cash…………………………………..………………….………… 95,000
Paid factory payroll
Exercise 16-23 (5 minutes)
Exercise 16-24 (5 minutes)
1. Finished Goods Inventory……………….………….…..….….135,600
Work in Process Inventory-Assembly……………..… 135,600
Transfer goods from production to finished goods.
2. Accounts Receivable……………..…………….…..…..….…...315,000
Sales………………..………………..…………………..….….... 315,000
Sale of goods on credit.
Exercise 16-25 (25 minutes)
1.
Oct. 31 Work in Process Inventory………………..……..….…..…....522,000
Raw Materials Inventory………………….…..…..….…... 522,000
Direct materials used in production.
4.
Oct. 31 Finished Goods Inventory ………………………….…..….….595,000
Work in Process Inventory……………..………..….…... 595,000
Transfer goods from production to finished
goods.
5.
Oct. 31 Accounts Receivable……………..…………….…..…..….…...950,000
Sales ……………………………………………………..….….... 950,000
Sales on credit.
Financial and Managerial Accounting, 6th Edition
Exercise 16-26 (25 minutes)
a. Purchased raw materials on credit at a cost of $52,000.
c. Incurred direct labor costing $32,000 in production.
e. Incurred overhead costs of $10,000, which are paid in cash.
g. Paid total factory payroll of $38,000.
i. Transferred completed products with a cost of $88,000 to the finished
goods inventory from production.
Exercise 16-27 (10 minutes)
A hybrid costing system contains features of both process costing and job
order costing. A hybrid system of processes requires a hybrid costing
PROBLEM SET A
Problem 16-1A (45 minutes)
Part 1: Cost of goods transferred and cost of goods sold
Beginning work in process inventory…………….……….…..….. $ 435,000
Direct materials used in production………………………………... 157,500
Less ending work in process inventory…..….……….…..…... (515,000 )
Transferred to finished goods inventory (a)…………………….. $1,754,500
Beginning finished goods inventory …………….………………... $ 633,000
Part 2: Summary journal entries
b.
May 31 Work in Process Inventory………………………….….…..….157,500
Raw Materials Inventory………………….…..…..….…... 157,500
Used direct materials.
Financial and Managerial Accounting, 6th Edition
Problem 16-1A (Continued)
d.
f.
May 31 Factory Payroll Payable………………………………………….1,530,000
Cash ……………..…………………..………………….………… 1,530,000
Paid factory payroll.
g.
May 31 Factory Overhead ……………………………………….……..….87,000
Other Accounts …………………….……………….………… 87,000
Incurred other overhead costs.
h.
j.
May 31 Accounts Receivable ………………………….…..…..….…....2,500,000
Sales ……………………………………………………..….….... 2,500,000
Sold finished goods.
Problem 16-2A (50 minutes)
Part 1
(a) and (b) Equivalent units with respect to direct materials and conversion
Direct
Equivalent units of production (EUP) Materials Conversion
Units completed and transferred out………….……. 700,000 700,000
Units of ending Work in Process……..…..….……...
Direct materials (180,000 x 100%)………..….…. 180,000
Part 2
Cost per equivalent unit of production
Direct
Materials Conversion
Costs of beginning Work in Process….….…..…..…......$ 420,000 $ 139,000
Part 3 Assigning product costs to units
Costs transferred out
Direct materials (700,000 EUP x $3.00 per EUP).......$2,100,000
Conversion (700,000 EUP x $4.50 per EUP).............. 3,150,000
(a) Total costs transferred out…….…..…..…..….…..….. $5,250,000
Costs of ending work in process
Financial and Managerial Accounting, 6th Edition