Problem 20-7B (Continued)
Cost per EUP
Direct
Materials Conversion
Costs incurred this period..…............. $ 223,200 $1,233,960
÷ EUP……………………………………....……. ÷ 232,500 ÷ 226,000
Cost to complete beginning work in process
Direct materials (2,500 EUP x $0.96 per EUP)…..................$ 2,400
Conversion (4,000 EUP x $5.46 per EUP)…………………..…… 21,840 24,240
Costs of units started and completed this period
Direct materials (210,000 EUP x $0.96 per EUP).................201,600
Total costs accounted for……………………………………………….. $1,571,680
Part 2
Mar. 31 Work in Process Inventory—Blending……………..……..1,486,960
Work in Process Inventory—Cutting…………….…… 1,486,960
Transfer of goods to finished inventory.
Problem 20-7B (Concluded)
If equivalent units of production for the production department’s ending
inventory for March are overstated, then total equivalent units of
production is also overstated. This means the cost per equivalent unit for
March is understated and the production manager would be paid a larger
SERIAL PROBLEM — SP 20
1. Features of job order and process costing follow.
Job order costing Process costing
Custom orders Repetitive operations
2. Given the size of her company, and the types of products she sells,
Santana should probably stay with job order costing. The furniture
process costing.
COMPREHENSIVE PROBLEM
Comprehensive Problem, Major League Bat Company (110 minutes)
[Instructor note: General Ledger accounts are shown in Part 4.]
Part 1 (Using either weighted-average or FIFO)
July Journal Entries
a. Raw Materials Inventory ……………………………..………...125,000
Cash……………………………………………………………..…. 125,000
Purchased raw materials for cash.
e. Factory Overhead …………………………………………..…..…80,000
Cash …………………………………………………………….…. 80,000
Paid other overhead with cash.
f. Work in Process Inventory……………………..…..………....101,125
Factory Overhead …………………………………….…..…. 101,125
Allocated overhead at 50% of direct labor.
Comprehensive Problem (Continued)
Part 2 (Using weighted-average)
MAJOR LEAGUE BAT CO.
Process Cost Summary (Weighted Average)
For Month Ended July 31
Costs Charged to Production
Costs of beginning work in process
Direct materials……………………………..……..…………..…….. $ 2,660
Conversion…………………………………………………………….... 5,475 $ 8,135
Costs incurred this period
Total costs to account for…………………………………………… $363,950
Unit cost information
Units to account for Units accounted for
Equivalent units of production
Direct
Materials Conversion
Units completed & transferred out...........11,000 EUP 11,000 EUP
Units of ending work in process
Cost per EUP
Direct
Materials Conversion
Cost of beginning work in process.......... $ 2,660 $ 5,475
Costs incurred this period……………………. 52,440 303,375
[Continued on next page]Comprehensive Problem (Continued)
(Using weighted-average)
Cost assignment and reconciliation
Costs transferred out
Direct materials (11,000 EUP x $2.90 per EUP)...................$ 31,900
Conversion (11,000 EUP x $21.75 per EUP)……………………. 239,250 $271,150
Part 3 — Journal entries (Using weighted-average)
Cost of Goods Sold ……………………………………….……...265,700
Finished Goods Inventory………………………..………. 265,700
Transferred cost from finished goods
to cost of goods sold.
Comprehensive Problem (Continued)
Part 4 (Using weighted-average)
General ledger accounts
Raw Materials Inventory Acct. No. 132
Date Explanation Debit Credit Balance
Work in Process Inventory Acct. No. 133
Date Explanation Debit Credit Balance
June 30 Balance 8,135
(b) Direct materials 52,440 60,575
Finished Goods Inventory Acct. No. 135
Date Explanation Debit Credit Balance
June 30 Balance 110,000
(g) Transfer in from prod. 271,150 381,150
(h) July sales 265,700 115,450