Chapter 08 – Process Costing
8-67
8-53. (continued)
c. The costs assigned to units transferred out has decreased from $541,621 to $443,294,
Chapter 08 – Process Costing
Solutions to Integrative Cases
8-54. (70 min.) Show Cost Flows—FIFO Method: Vermont Co.
Work in Process
Beginning Balance
716,000
Transferred out:
Current work:
materials (given)
300,400
716,000a
From beginning inventory
From current work
conversion (given)
1,287,000
240,320a
materials
833,976b
conversion costs
Ending Balance
513,104
40,500 EU = 62,500 – 22,000 in ending inventory)
Finished Goods
Transferred in
1,790,296
a
1,432,237
To Cost of Goods Sold
(80%)
Balance
358,059
From Finished Goods
Overapplied overhead
(See explanation below)
Chapter 08 – Process Costing
8-69
8-54. (continued)
Chapter 08 – Process Costing
8-55. (45 min.) Job Costing, Process Costing, Choosing a Costing Method:
Bouwens Corporation.
This problem is computationally straight-forward, but requires the student to think
about the use of the costs from the costing system and how to best reflect the
Chapter 08 – Process Costing
8-71
8-55. (continued)
d. Compute the unit costs for materials and conversion costs separately.
M-Solv
(B–155)
C-Solv
(B–159)
Materials costs ………………..
$14,000
$ 40,000
Units produced ………………..
2,000
10,000
Unit cost (materials) …………
$7
$4
Then compute conversion costs for the factory:
M-Solv
(B–155)
C-Solv
(B–159)
Total
Conversion costs ……………..
30,000
120,000
$150,000
Units produced ………………..
2,000
10,000
12,000
Unit cost (conversion) ……….
$12.50
Now, compute the unit product cost:
M-Solv
(B–155)
C-Solv
(B–159)
Unit materials costs ………….
$7.00
$4.00
Conversion costs ……………..
12.50
12.50
Total costs …………………..
$19.50
$16.50