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Title: Problem 20-5B
QA_Ori:
Part 1
SWITCH CO.
Process Cost Summary – Weighted Average Method
For Month Ended January 31
Costs Charged to Production
Costs of beginning goods in process
Direct materials................................................................... $ 7,500
Unit cost information
Units to account for Units accounted for
Equivalent units of production
Direct
Materials
Direct
Labor
Factory
Overhead
Units completed & transferred out...............................220,000 EUP 220,000 EUP 220,000 EUP
Cost per EUP
Direct
Materials
Direct
Labor
Factory
Overhead
Cost of beginning goods in process.............................$ 7,500 $ 14,240 $ 35,600
EUP
EUP
EUP
Cost assignment and reconciliation
Costs transferred out
Direct materials (220,000 EUP x $0.50 per EUP)....................$110,000
Part 2
Part 3
3a. Two major estimates are the: i) overhead allocation rate, and ii) percentage
of completion for materials, labor, and overhead.
3b. Management might want an overhead allocation rate that assigns the least
amount of overhead to their respective production process, and we might
Title: Problem 20-6B
QA_Ori:
Part 1
SWITCH COMPANY
Process Cost Summary – FIFO Method
For Month Ended January 31
Costs Charged to Production
Costs of beginning goods in process
Unit cost information
Units to account for Units accounted for
0
Equivalent units of production
Direct
Materials
Direct Labor Factory
Overhead
Units to complete beginning goods in process
Direct materials (10,000 x 25%)................ 2,500 EUP
Direct Direct Labor Factory
Cost per EUP Materials Overhead
EUP
EUP
EUP
Cost assignment and reconciliation
Costs transferred out
Cost of beginning goods in process........................................... $ 57,340
* $106 difference from total costs to account for due to rounding
Part 2
Jan. 31 Finished Goods Inventory................................................743,554
Title: Problem 20-7B
QA_Ori:
1. Units in beginning inventory............................................. 62,500
2. Equivalent units of production—FIFO
Direct Direct
Equivalent units of production Materials Labor
Units to complete beginning goods in process
Direct materials (62,500 x 60%).................................... 37,500
3. Cost per equivalent unit of direct materials and direct labor—FIFO
Direct Direct
Materials Labor
Costs incurred this period............................................... 683,750 446,050
EUP
EUP
4. Assignment of costs to output of department—FIFO
Costs of goods transferred out
Cost of beginning goods in process inventory................
Direct labor (12,500 EUP x $2.20 per EUP)................. 27,500
Total costs to complete.................................................. 121,250
