Chapter 20 – Process Costing
Quick Study 20-15 (5 minutes)
Cost per equivalent unit – FIFO
Direct
Materials Conversion
Costs incurred this period………………………………………. $10,404 $12,285
÷ Equivalent units of production (from QS 20-14)…..... 10,200 9,100
Cost per equivalent unit of production.…..………..........$1.02 per
EUP
$1.35 per
EUP
Quick Study 20-16 (20 minutes)
Total costs of units transferred out………………….……. $20,607
Cost of ending work in process inventory
Direct materials (2,400 EUP x $1.02 per EUP).......... 2,448
Conversion (900 EUP x $1.35 per EUP)…................. 1,215
10).
Quick Study 20-17 (5 minutes)
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Chapter 20 – Process Costing
Quick Study 20-18 (10 minutes)
a)
Equivalent units of production—Weighted average
Direct
Materials
Units completed & transferred out (17,000 x 100%).............17,000
Units of ending work in process
Direct materials, (3,000 x 80%)……………………………………… 2,400
Equivalent units of production……………..…………..………..…..19,400
b)
Cost per equivalent unit—Weighted average
Direct
Materials
Costs of beginning work in process………………………... $ 1,200
Costs incurred this period………………………………………. 27,900
Quick Study 20-19 (10 minutes)
Cost assignment—Weighted average
Direct
Materials
Costs of units transferred out
Direct materials (17,000 EUP x $1.50 per EUP)........ $25,500
Costs of ending work in process
Quick Study 20-20 (10 minutes)
The ending balance in Work in Process Inventory—Cutting is $7,100 and
the ending balance in Work in Process Inventory—Binding is $17,042, as
computed below.
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Chapter 20 – Process Costing
Work in Process—Cutting
Beg. Inventory 3,445
Dir. materials 8,240
Work in Process—Binding
Beg. Inventory 6,426
Transferred-in 15,685
Dir. materials 6,356
Quick Study 20-21 (15 minutes)
Equivalent units under the FIFO method
Equivalent
EUP for materials—FIFO Units
Equivalent units to complete beginning WIP (2,000 x 30%)............. 600
Equivalent units started and completed*………………..………..………….15,000
* Units completed – Units in beginning work in process = Units started and completed,
17,000 – 2,000 = 15,000. Units completed = Units in beginning work in process + Units
started – Units in ending work in process, 17,000 = 2,000 + 18,000 – 3,000.
Cost per equivalent unit—FIFO
Direct
Materials
Costs incurred this period………………………………………. $27,900
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Chapter 20 – Process Costing
Quick Study 20-22 (15 minutes)
Assignment of direct materials costs to output of department—FIFO
Costs transferred out
Cost of direct materials in beginning WIP……..…….... $2,170
Costs to complete beginning WIP………………………....
Quick Study 20-23 (10 minutes)
1. Raw Materials Inventory……………………..………..………..62,000
Cash………………………………………………………………… 62,000
Purchase of raw materials inventory.
Quick Study 20-24 (10 minutes)
1. Work in Process Inventory……………………………..………125,000
Factory Payroll Payable………………………………..….. 125,000
To record direct labor used in production.
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Chapter 20 – Process Costing
Quick Study 20-25 (15 minutes)
1. Factory Overhead………………………………………………..… 9,000
Raw Materials Inventory………………..………..……….. 9,000
To record indirect materials used in production.
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Chapter 20 – Process Costing
Quick Study 20-26 (10 minutes)
Finished Goods Inventory……………………………..……….275,000
Work in Process Inventory………………………..……… 275,000
Transfer of finished goods from production.
Quick Study 20-27 (5 minutes)
If the company is successful in reducing water usage, its raw materials
EXERCISES
Exercise 20-1 (10 minutes)
Note: Reasonable arguments can be made to classify #7 and #11 as being made
in a process operation, and #8 in a job order operation, in some cases.
Exercise 20-2 (10 minutes)
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Chapter 20 – Process Costing
Exercise 20-3 (10 minutes)
20-1129