Title: Exercise 20-22
QA_Ori:
HI-TEST COMPANY
Process Cost Summary (Weighted-Average Method)
For Month Ended September 30
Costs Charged to Production
Costs of beginning work in process
Direct materials……………………………………………………………….$ 45,000
Unit Cost Information
Units to Account For Units Accounted For
Equivalent Units of Production (EUP)
Direct
Materials
Direct
Labor
Factory
Overhead
Units completed and transferred out………………….
(g)23,000EUP (h)23,000EUP (i)23,000EUP
Cost per EUP
Direct
Materials
Direct
Labor
Factory
Overhead
Costs of beginning goods in process…………. $ 45,000 $ 25,600 $ 30,720
per EUP
per EUP
per EUP
[
Cost Assignment and Reconciliation
Costs transferred out
Cost of ending goods in process
Direct materials [(kk)$14.00 x (ll)7,000]…………………………… (mm) 98,000
QA_Edit:
Title: Problem 20-1A
QA_Ori:
Part 1: Cost of goods transferred and cost of goods sold
Beginning goods in process inventory………………………………… $ 435,000
Direct materials used in production…………………………………….. 157,500
Beginning finished goods inventory …………………………………… $ 633,000
Part 2: Summary journal entries
a.
May 31 Raw Materials Inventory …………………………………………..250,000
b.
May 31 Goods in Process Inventory………………………………………157,500
c.
May 31 Factory Overhead ……………………………………………………60,000
d.
May 31 Factory Payroll ……………………………………………………….1,530,000
e.
May 31 Goods in Process Inventory………………………………………780,000
f.
May 31 Factory Overhead ……………………………………………………750,000
g.
May 31 Factory Overhead ……………………………………………………87,000
h.
May 31 Goods in Process Inventory………………………………………897,000
i.
May 31 Finished Goods Inventory…………………………………………1,754,500
j.
May 31 Accounts Receivable ……………………………………………….2,500,000
May 31 Cost of Goods Sold …………………………………………………1,782,500
Title: Problem 20-2A
QA_Ori:
Part 1
(a) and (b) Equivalent units with respect to direct materials and direct labor
Direct Direct
Equivalent units of production (EUP) Materials Labor
Units completed and transferred out…………………… 700,000 700,000
Part 2
Cost per equivalent unit of production
Direct
Materials
Direct
Labor
Costs of beginning goods in process………………………….$ 420,000 $ 139,000
Part 3: Assigning product costs to units
Costs transferred out
Direct materials (700,000 EUP x $3.00 per EUP)……….$2,100,000
*This equals the sum of the total direct materials cost and the
total direct labor costs ($2,640,000 + $3,393,000 = $6,033,000).
Part 4
MEMORANDUM
TO:
FROM:
DATE:
RE: Percentage of Completion Error Analysis
If the units in ending inventory are 60% complete instead of 30% with respect to
labor, the number of equivalent units in ending inventory with respect to labor is
Regarding financial statements, this error causes an overstatement of cost of
Title: Problem 20-3A
QA_Ori:
Part 1
a.
Mar. 31 Raw Materials Inventory……………………………………………250,000
Accounts Payable………………………………………………. 250,000
Raw materials purchased.
b.
Mar. 31 Goods in Process Inventory………………………………………168,000
Raw Materials Inventory……………………………………… 168,000
Direct materials used in production.
c.
i.
Mar. 31 Finished Goods Inventory…………………………………………572,390
Goods in Process Inventory………………………………… 572,390
Transfer goods to finished goods.
j.