Problem 20-4B (80 minutes)
Part 1
SWITCH CO.
Process Cost Summary – Weighted Average Method
For Month Ended January 31
Costs Charged to Production
Costs of beginning work in process
Direct materials………………………………………………………. $ 7,500
Unit cost information
Units to account for Units accounted for
Beginning work in process………….10,000 Completed & transferred out..... 220,000
Equivalent units of production
Direct
Materials Conversion
Units completed & transferred out……………………..220,000 EUP 220,000 EUP
Units of ending work in process
Cost per EUP Direct Materials Conversion
Cost of beginning work in process………………….. $ 7,500 $ 49,840
[Continued on next page]
Problem 20-4B (Concluded)
Cost assignment and reconciliation
Costs transferred out
Direct materials (220,000 EUP x $0.50 per EUP)……………..$110,000
Part 2
Jan. 31 Finished Goods Inventory……………………………………..741,400
Part 3
3a. Two major estimates are the: i) overhead allocation rate, and ii)
percentage of completion for materials and conversion.
3b. Management might want an overhead allocation rate that assigns the
least amount of overhead to their respective production process, and
Problem 20-5B (80 minutes)
Part 1
SWITCH COMPANY
Process Cost Summary – FIFO Method
For Month Ended January 31
Costs Charged to Production
Costs of beginning work in process
Direct materials………………………………………………………. $ 7,500
Unit cost information
Units to account for Units accounted for
Beginning work in process…………..10,000 Completed & transferred out....... 220,000
Equivalent units of production
Direct
Materials Conversion
Units to complete beginning WIP
Direct materials (10,000 x 25%)........ 2,500 EUP
Conversion (10,000 x 40%)…………… 4,000 EUP
[Continued on next page]
Problem 20-5B (Concluded)
Cost per EUP
Direct
Materials Conversion
Costs incurred this period……………… $ 112,500 $ 616,000
EUP
EUP
Cost assignment and reconciliation
Costs transferred out
Cost of beginning work in process………………………………… $ 57,340
Cost to complete beginning work in process
* $106 difference from total costs to account for due to rounding
Part 2
Problem 20-6B (45 minutes)
1. Units in beginning inventory…………………………………. 62,500
2. Equivalent units of production—FIFO
Direct
Equivalent units of production Materials Conversion
Units to complete beginning Work in Process
Direct materials (62,500 x 60%)…………………………… 37,500
Conversion (62,500 x 20%)…………………………………. 12,500
3. Cost per equivalent unit of direct materials and conversion—FIFO
Direct
Materials Conversion
Costs incurred this period…………………………………… $683,750 $446,050
EUP