Chapter 20 – Process Costing
Exercise 20-12 (30 minutes)
ASHAD COMPANY
Process Cost Summary – Weighted Average Method
For Month Ended July 31
Costs Charged to Production
Unit Information
Units to Account For Units Accounted For
Beginning work in process………………..
2,000 Completed & transferred out…………………………………….……………………......................
32,000
Units started this period…………………….
32,500 Ending work in process…………………………………………..…………………………….............
2,500
Total units to account for….……………….
34,500 Total units accounted for………………………………………………………………………………....
34,500
Equivalent Units of Production (EUP)
Direct
Materials Conversion
Cost per EUP
Direct
Materials Conversion
Costs of beginning work in process………. $ 18,550 $ 2,280
Costs incurred this period…………….………. 357,500 188,670
Cost per equivalent unit of production…….. $10.90 per
EUP
$5.70 per
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 20-13 (40 minutes)
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Chapter 20 – Process Costing
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
Equivalent units of production
Direct
Materials
Conversion
Units to complete beginning WIP
Direct materials (2,000 x 0%)…………………..…… 0 EUP
Conversion (2,000 x 80%)………………..………….. 1,600 EUP
Units started and completed……………..…………..
30,000 EUP 30,000 EUP
Units of ending work in process
[Continued on next page]Exercise 20-13 (Concluded)
Cost per EUP
Direct
Materials
Conversio
n
Costs incurred this period..…............. $ 357,500 $ 188,670
Cost per EUP…………………………………. $11.00 per
EUP
$5.70 per
EUP
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Chapter 20 – Process Costing
Cost assignment and reconciliation
Costs of units started and completed this period
Direct materials (30,000 EUP x $11.00 per EUP)..... 330,000
Conversion (30,000 EUP x $5.70 per EUP).............. 171,000 501,000
Total cost of work finished this period………………… 530,950
Exercise 20-14 (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
Direct materials…………………………………… 240,000 75,000
Direct labor…………………………………………. 1,200,000 360,000
Less ending inventory—Sewing ..…….... (700,000)
TRANSFERRED TO FINISHED GOODS (b) ........ $3,215,000 3,215,000
Less ending inventory—Finished goods.... (1,206,000)
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Chapter 20 – Process Costing
COST OF GOODS SOLD (c) …………………..….. $3,275,000
Part 2: Summary journal entries.
June 30 Accounts Receivable …………………………………………….4,000,000
Sales ………………………………………………..…………….. 4,000,000
Sold finished goods.
Exercise 20-15 (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
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Chapter 20 – Process Costing
Used direct labor.
Incurred other overhead costs.
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 20-16 (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
Unit information
Units to account for Units accounted for
Beginning work in process…………….…………………2,000 Completed & transferred out..………...17,000
Equivalent units of production
Direct
Materials Conversion
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Education.
Chapter 20 – Process Costing
Units completed & transferred out..... 17,000 EUP 17,000 EUP
Units of ending work in process
Direct materials (5,000 x 100%)........ 5,000 EUP
Conversion (5,000 x 35%)……………… __________ 1,750 EUP
Equivalent units of production........... 22,000 EUP 18,750 EUP
Cost per EUP
Direct
Materials Conversion
[Continued on next page]
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