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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)
20-1123
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
20-1124
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
20-1127
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]
20-1128
