Chapter 6 – Process Costing
6-16
6-37: Weighted Average Method (20 min)
Physical Percentage
Units Completion Materials Conversion Materials
Conversion
Beginning WIP 5,000
Materials 100% 5,000
Conversion 50% 2,500
Units started 15,000
Total to account for 20,000
Units FinIshed 17,000 17,000 17,000 17,000 17,000
Ending WIP 3,000
Materials 100% 3,000 3,000
Conversion –
50% 1,500 1,500
Total accounted for 20,000 – – – –
Total Equivalent Units 20,000 18,500 15,000 16,000
DETERMINE TOTAL COSTS Materials Conversion Total
Beginning WIP 94,000$ 133,000$ 227,000$
Current Costs 230,000 376,000 606,000
TOTAL 324,000$ 509,000$ 833,000$
WTAVG
Cost per EU 16.2000$ 27.5135$ 43.7135$
FIFO Cost per EU 15.3333$ 23.5000$ 38.8333$
Units Completed
Units in Ending
COST ASSIGNED -WEIGHTED AVERAGE
and Transferred
WIP
Out Inventory Total
COST ASSIGNED -FIFO
Finished Goods 17,000 units
Prior period costs in Beginning WIP 227,000
Current cost to complete Beginning WIP
Materials – Equiv units –
Conversion 2,500 Equiv units 58,750
Units started and finish
12,000 Equiv units 466,000
Ending WIP 3,000 units
Materials 46,000 46,000
Conversion – 35,250 35,250
TOTAL MANUFACTURING COSTS ACCOUNTED FOR 751,750$ 81,250$ 833,000$
Equivalent Units
Equivalent Units
Weighted Average
FIFO
Chapter 6 – Process Costing
6-17
Note: Units finished = units from Beginning WIP completed this period +
units started and finished this period = 5,000 + 12,000 =17,000
6-38 FIFO Method (20 min) — see solution above
6-38 FIFO Method (20 min) — see solution on prior page
6-39 Weighted-Average Method (30-40 min)
1., 2.
Materials X
Materials Y
Conversion
Equivalent Units
87,000
60,000
70,800
Cost per Equiv. Unit
$2.50
$3.75
$6.00
Chapter 6 – Process Costing
6-18
Physical Percentage
Units Completion Material X Material Y Conversion
Beginning WIP 33,000
Material X 100%
Material Y 100%
Conversion 80%
Units started 54,000
Total to account for 87,000
Units Finished 60,000 60,000 60,000 60,000
Ending WIP 27,000
Material X 100% 27,000
Material Y 0% –
Conversion –
40% 10,800
Total accounted for 87,000 – – –
Total Equivalent Units 87,000 60,000 70,800
DETERMINE TOTAL COSTS Material X Material Y Conversion Total
Beginning WIP 64,800$ 89,100$ 119,880$ 273,780$
Current Costs 152,700 135,900
304,920 593,520
TOTAL 217,500$ 225,000$ 424,800$ 867,300$
WTAVG Cost per EU 2.500$ 3.750$ 6.000$ 12.250$
Units Completed
Units in Ending
COST ASSIGNED -WEIGHTED AVERAGE
and Transferred
WIP
Out Inventory Total
Finished Goods
60,000 units 735,000$ $735,000
Ending WIP
27,000 units
Material X 67,500 $67,500
Material Y – –
Conversion – 64,800 $64,800
TOTAL MANUFACTURING COSTS ACCOUNTED FOR 735,000$ 132,300$ 867,300$
Weighted Average Equivalent Units
6-19
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
6-40 Weighted-Average Method (30 min)
1. Equivalent units:
Direct Materials: 204,000
Conversion: 192,000
2. Cost per equivalent unit:
3. Cost of goods completed and transferred out: ¥ 2,081,636
4. Cost of work-in-process, 10/31: ¥ 190,364
Physical Percentage
Units Completion Materials Conversion
Beginning WIP 40,000
Materials 60%
Conversion 30%
Units started 170,000
Total to account for 210,000
Units Finished 180,000 180,000 180,000
Ending WIP 30,000
Materials 80% 24,000
Conversion –
40% 12,000
Total accounted for 210,000 – –
Total Equivalent Units 204,000 192,000
DETERMINE TOTAL COSTS (all amounts in Yuan)
Materials Conversion Total
Beginning WIP ¥ 57,000 ¥ 45,000 ¥ 102,000$
Current Costs 820,000 1,350,000 2,170,000
TOTAL ¥ 877,000 ¥ 1,395,000 ¥ 2,272,000$
WTAVG Cost per EU ¥ 4.2990 ¥ 7.2656 ¥ 11.5646
Equivalent Units
Weighted Average
Chapter 6 – Process Costing
6-20
6-40 (continued–1)
5. Exchange rate as of March 9, 2012 was $1 US = 6.3109 Yuan, a fall
in the dollar of approximately 7% over the prior three years. The rise
Chapter 6 – Process Costing
6-21
6-41 Weighted-Average Method; Transferred in Units (25 min)
1. Equivalent units
a. Transferred in: 32,000
b. Materials: 27,000
c. Conversion: 29,500
2. Unit costs
a. Transferred-in $6.25
Chapter 6 – Process Costing
6-22
Whole Percent Transferred
Units Completion in Costs Materials Conversion
Beginning WIP 4,000 100%
Materials 0%
Conversion 50%
Units started or Trans-in 28,000 100%
Total to account for 32,000
Units Finshed or Trans-out 27,000 100% 27,000 27,000 27,000
Ending WIP 5,000 100% 5,000
Materials – 0% –
Conversion –
50% 2,500
Total accounted for 32,000 – – –
Total Equivalent Units 32,000 27,000 29,500
COST ADDED
Trans-in Materials Conversion Total
Beginning WIP 50,000$ –$ 30,000$ 80,000$
Current Costs 150,000 60,000 110,000 320,000
TOTAL 200,000$ 60,000$ 140,000$ 400,000$
WTAVG Cost per EU 6.2500$ 2.2222$ 4.7458$ 13.2180$
Completed Ending Work
% Trans-out in Process Total
Finished Goods
27,000 units 356,886$ 356,886$
Ending Work-in-process
5,000 units
Trans-in 5,000 units 31,250$ 31,250
Materials – units – –
Conversion 2,500 units – 11,864 11,864
Total Costs Accounted For 356,886$ 43,114$ 400,000$
—–This Dept—–
Chapter 6 – Process Costing
6-23
6-42 Reconditioning Service; Weighted-Average (20 min)
Physical Percentage
Units Completion Materials Conversion
Beginning WIP 150
Materials 50%
Conversion 30%
Units started 1,200
Total to account for 1,350
Units Finished 1,050 1,050 1,050
Ending WIP 300
Materials 30% 90
Conversion –
20% 60
Total accounted for 1,350 – –
Total Equivalent Units 1,140 1,110
DETERMINE TOTAL COSTS Materials Conversion Total
Beginning WIP 15,000$ 20,000$ 35,000$
Current Costs 200,000 385,000 585,000
TOTAL 215,000$ 405,000$ 620,000$
WTAVG Cost per EU 188.596$ 364.865$ 553.461$
Units Completed Units in Ending
COST ASSIGNED –WEIGHTED AVERAGE and Transferred WIP
Out Inventory Total
Finished Goods
1,050 units 581,134$ $581,134
Ending WIP
300 units
Materials 16,974 $16,974
Conversion – 21,892 $21,892
TOTAL MANUFACTURING COSTS ACCOUNTED FOR 581,134$ 38,866$ 620,000$
Equivalent Units
Weighted Average
Chapter 6 – Process Costing
6-24
Problem 6-42 (continued-1)
2. The information in the cost report shows two relevant items of
information regarding planning for the coming month’s work. First,
note there has been an increase in WIP during November, a month in
which there were fewer units in process (1,350 units) . December’s
work will require 1,500 + 300 = 1,800 units in process, somewhat
larger than November’s requirement. GWI should be concerned
about its capacity and ability to meet the December orders on a
Chapter 6 – Process Costing
6-25
6-43 Weighted Average Method (25 min)
1.,2.,3.
Physical Percentage
Units Completion Materials Conversion Materials Conversion
Beginning WIP 4,000
Materials 100% 4,000
Conversion 20% 800
Units started 13,000
Total to account for 17,000
Units Finished 12,000 12,000 12,000 12,000 12,000
Ending WIP 5,000
Materials 100% 5,000
Conversion –
40% 2,000
Total accounted for 17,000 – – – –
Total Equivalent Units 17,000 14,000 13,000 13,200
DETERMINE TOTAL COSTS Materials Conversion Total
Beginning WIP 100,000$ 135,000$ 235,000$
Current Costs 44,500 92,500 137,000
TOTAL 144,500$ 227,500$ 372,000$
Ending WIP (
5,000 units)
Materials 42,500 $42,500
Conversion – 32,500 $32,500
TOTAL MANUFACTURING COSTS ACCOUNTED FOR 297,000$ 75,000$ 372,000$
COST ASSIGNED –FIFO
Finished Goods 12,000 units
Prior period costs in Beginning WIP 235,000
Current cost to complete Beginning WIP
Materials – Equiv units –
Ending WIP
Conversion – 14,015 14,015
TOTAL MANUFACTURING COSTS ACCOUNTED FOR 340,869$ 31,131$ 372,000$
Equivalent Units
Equivalent Units
Weighted Average
FIFO
Chapter 6 – Process Costing
6-43 (continued –1)
4. The request is a violation of the controller’s responsibility to prepare
accurate production cost reports. The ethical principles of integrity and
objectivity require the controller to use the best available estimate of
percentage completion.
Since there is a high level of ending WIP, the change from 40% to 60%
would have a significant effect on equivalent units and cost per equivalent
unit, as shown below
The weighted-average conversion cost per equivalent unit decreases from
$16.25 to $15.1667
Physical Percentage
Units Completion Materials Conversion Materials
Conversion
Beginning WIP 4,000
Materials 100% 4,000
Conversion 20% 800
Units started 13,000
Total to account for 17,000
Units Finished 12,000 12,000 12,000 12,000 12,000
Ending WIP 5,000
Materials 100% 5,000 5,000
Conversion –
60% 3,000 3,000
Total accounted for 17,000 – – – –
Total Equivalent Units 17,000 15,000 13,000 14,200
DETERMINE TOTAL COSTS Materials Conversion Total
Beginning WIP 100,000$ 135,000$ 235,000$
Current Costs 44,500 92,500 137,000
TOTAL 144,500$ 227,500$ 372,000$
WTAVG Cost per EU 8.5000$ 15.1667$ 23.6667$
FIFO Cost per EU 3.4231$ 6.5141$ 9.9372$
Equivalent Units
Equivalent Units
Weighted Average
FIFO
6-27
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
6-44 FIFO Method (25 min)
See the solution for 6-43 above for the calculation of cost per equivalent
unit under FIFO.
6-45 Weighted-Average Method; Transferred-In Costs (40-50 min)
1. (all currency figures are in Korean won)
Whole Percent Transferred
Units
Completion
in Costs Materials Conversion
Beginning WIP 6,000 100%
Materials 100%
Conversion 80%
Units started or Trans-in 15,000 100%
Total to account for 21,000
Units Finsihed or Trans-out 18,000 100% 18,000 18,000 18,000
Ending WIP 3,000 100% 3,000
Materials – 90% 2,700
Conversion –
60% 1,800
Total accounted for 21,000 – – –
Total Equivalent Units 21,000 20,700 19,800
COST ADDED
Trans-in Materials Conversion Total
WTAVG Cost per EU 9.500 5.600 6.700 21.800
Completed Ending Work
% Trans-out in Process Total
Finished Goods
18,000 units 392,400 392,400
Ending Work-in–process
Trans-in 3,000 units 28,500 28,500
Materials 2,700 units 15,120 15,120
Conversion 1,800 units – 12,060 12,060
Total Costs Accounted For 392,400 55,680 448,080
——–This Dept-–—–
Chapter 6 – Process Costing
6-28
2. On March 9, 2012 the exchange rate was $1 US = 1,116 South Korean
Won (KRW). The dollar had fallen about 15% from a rate of $1 US =
1,253 KRW three years earlier. These economic cycles that affect
currency exchange rates are important in product costing and business
management, as they affect trade between the countries. With the dollar
falling U.S. exports to South Korean are cheaper in Korea, while imports of
Korean goods are more expensive to the U.S. consumer.
6-46 FIFO Method; Two Departments (60-70 min)
Molding Department
Chapter 6 – Process Costing
Physical Percentage
Units Completion Materials Conversion
Beginning WIP 0
Materials 0% –
Conversion 0% –
Units started (lbs) 50,000
Total to account for 50,000
Units Finished or Trans-out (lbs) 50,000 50,000 50,000
Ending WIP 0
Materials 0%
Conversion –
0%
Total accounted for (lbs) 50,000 – –
Total Equivalent Units 50,000 50,000
DETERMINE TOTAL COSTS Materials Conversion Total
Beginning WIP –$ –$ –$
Current Costs 450,000 90,000 540,000
TOTAL 450,000$ 90,000$ 540,000$
FIFO Cost per EU 9.000 1.800 10.800
Units Completed Units in Ending
COST ASSIGNED – FIFO and Transferred WIP
Out Inventory Total
Finished Goods ( 50,000 lbs)
Prior period costs in Beginning WIP –$
Current period cost to complete Beg WIP –
Cost of units started and finished 540,000
TOTAL 540,000 540,000$
Ending WIP ( 0 lbs)
Materials – –
Conversion – –
–
TOTAL MANUFACTURING COSTS ACCOUNTED FOR 540,000$ –$ 540,000$
FIFO
Equivalent Units
Chapter 6 – Process Costing
6-30
Problem 6-46 (Continued –1)
Finishing Department
Physical Percent Transferred
Units
Completion
in Costs Materials Conversion
Beginning WIP 5,000 100%
Materials 0% –
Conversion 40% 2,000
Units started or Trans-in 50,000 100% 50,000
Total to account for 55,000
Units Finished or Trans-out 53,000 100% – 53,000
Ending WIP 2,000 100%
Materials – 0%
Conversion – 40% 800
Total accounted for 55,000 – – –
Total Equivalent Units 50,000 – 51,800
COST ADDED
Trans-in Materials Conversion Total
Beginning WIP ? – ? 15,000
Current Costs 540,000 – 80,000 620,000
TOTAL 540,000 – 80,000 635,000
FIFO Cost per EU 10.8000 0.0000 1.5444 12.3444
Completed Ending Work
Prior period costs in Beginning WIP 15,000
Current per. cost to complete Beg WIP
Materials 5,000 Equiv units –
Conversion 3,000 Equiv units 4,633
Units started & finished
48,000 Equiv units 592,531
Materials – –
Conversion – 1,236 1,236
TOTAL MANUFACTURING COSTS ACCOUNTED FOR 612,164$ 22,836$ 635,000$
——-This Dept–—–
FIFO
Equivalent Units