Problem 4-15 (45 minutes)
Weighted-Average Method
1.
Equivalent units of production:
Materials
Conversion
Transferred to next department ……………………
160,000
160,000
Ending work in process:
Materials: 40,000 units x 100% complete …….
40,000
Conversion: 40,000 units x 25% complete ……
10,000
Equivalent units of production ……………………..
200,000
170,000
2.
Cost per Equivalent Unit
Materials
Conversion
Cost of beginning work in process …………….
$ 25,200
$ 24,800
Cost added during the period …………………..
334,800
238,700
Total cost (a) ……………………………………….
$360,000
$263,500
Equivalent units of production (b) …………….
200,000
170,000
Cost per equivalent unit, (a) ÷ (b) ……………
$1.80
$1.55
3.
Applying costs to units:
Materials
Total
Ending work in process inventory:
Equivalent units of production
40,000
Cost per equivalent unit …….
$1.80
Cost of ending work in process
inventory ………………………
$72,000
$87,500
Units completed and transferred out:
Units transferred to the next
department …………………..
160,000
Cost per equivalent unit …….
$1.80
Cost of units completed and
transferred out ……………….
$288,000
$536,000
Problem 4-15 (continued)
4.
Cost reconciliation:
Costs to be accounted for:
Cost of beginning work in process inventory
($25,200 + $24,800) …………………………….
$ 50,000
Costs added to production during the period
($334,800 + $238,700) …………………………
573,500
Total cost to be accounted for …………………..
$623,500
Costs accounted for as follows:
Cost of ending work in process inventory ……
$ 87,500
Cost of units completed and transferred out ..
536,000
Total cost accounted for ………………………….
$623,500
Problem 4-16 (45 minutes)
Weighted-Average Method
1.
Equivalent units of production
Materials
Conversion
Transferred to next department* ………………….
95,000
95,000
Ending work in process:
Materials: 15,000 units x 60% complete ………
9,000
Conversion: 15,000 units x 20% complete ……
3,000
Equivalent units of production ……………………..
104,000
98,000
*Units transferred to the next department = Units in beginning work in
process + Units started into production − Units in ending work in
process = 10,000 + 100,000 − 15,000 = 95,000
2.
Cost per equivalent unit
Materials
Conversion
Cost of beginning work in process …………….
$ 1,500
$ 7,200
Cost added during the period …………………..
154,500
90,800
Total cost (a) ……………………………………….
$156,000
$98,000
Equivalent units of production (b) …………….
104,000
98,000
Cost per equivalent unit, (a) ÷ (b) ……………
$1.50
$1.00
3.
Cost of ending work in process inventory and units transferred out
Materials
Total
Ending work in process inventory:
Equivalent units of production…
9,000
Cost per equivalent unit ………..
$1.50
Cost of ending work in process
inventory ………………………….
$13,500
$16,500
Units completed and transferred out:
Units transferred to the next
department ………………………
95,000
Cost per equivalent unit ………..
$1.50
Cost of units completed and
transferred out …………………..
$142,500
$237,500
Problem 4-16 (continued)
4.
Cost Reconciliation
Costs to be accounted for:
Cost of beginning work in process inventory
($1,500 + $7,200) ……………………………….
$ 8,700
Costs added to production during the period
($154,500 + $90,800) …………………………..
245,300
Total cost to be accounted for …………………..
$254,000
Costs accounted for as follows:
Cost of ending work in process inventory ……
$ 16,500
Cost of units completed and transferred out ..
237,500
Total cost accounted for ………………………….
$254,000
Problem 4-17 (45 minutes)
Weighted-Average Method
1.
a.
Work in Process—Refining Department ………
495,000
Work in Process—Blending Department ……..
115,000
Raw Materials ………………………………….
610,000
b.
Work in Process—Refining Department ………
72,000
Work in Process—Blending Department ……..
18,000
Salaries and Wages Payable ……………….
90,000
c.
Manufacturing Overhead ………………………..
225,000
Accounts Payable ……………………………..
225,000
d.
Work in Process—Refining Department ………
181,000
Manufacturing Overhead ……………………
181,000
d.
Work in Process—Blending Department ……..
42,000
Manufacturing Overhead ……………………
42,000
e.
Work in Process—Blending Department ……..
740,000
Work in Process—Refining Department …
740,000
f.
Finished Goods …………………………………….
950,000
Work in Process—Blending Department …
950,000
g.
Accounts Receivable ………………………………
1,500,000
Sales ……………………………………………..
1,500,000
Cost of Goods Sold ………………………………..
900,000
Finished Goods ………………………………..
900,000
Problem 4-17 (continued)
2.
Accounts Receivable
Raw Materials
(g)
1,500,000
Bal.
618,000
(a)
610,000
Bal.
8,000
Work in Process
Refining Department
Work in Process
Blending Department
Bal.
38,000
(e)
740,000
Bal.
65,000
(f)
950,000
(a)
495,000
(a)
115,000
(b)
72,000
(b)
18,000
(d)
181,000
(d)
42,000
Bal.
46,000
(e)
740,000
Bal.
30,000
Finished Goods
Manufacturing Overhead
Bal.
20,000
(g)
900,000
(c)
225,000
(d)
223,000
(f)
950,000
Bal.
2,000
Bal.
70,000
Accounts Payable
Salaries and Wages Payable
(c)
225,000
(b)
90,000
Sales
Cost of Goods Sold
(g)
1,500,000
(g)
900,000
© The McGraw-Hill Companies, Inc., 2015. All rights reserved.
Solutions Manual, Chapter 4 27
Problem 4-18 (30 minutes)
Weighted-Average Method
1.
Equivalent units of production
Materials
Conversion
Transferred to next department ……………………
190,000
190,000
Ending work in process:
Materials: 40,000 units x 75% complete ………
30,000
Conversion: 40,000 units x 60% complete ……
24,000
Equivalent units of production ……………………..
220,000
214,000
2.
Cost per equivalent unit
Materials
Conversion
Cost of beginning work in process …………….
$ 67,800
$ 30,200
Cost added during the period …………………..
579,000
248,000
Total cost (a) ……………………………………….
$646,800
$278,200
Equivalent units of production (b) …………….
220,000
214,000
Cost per equivalent unit, (a) ÷ (b) ……………
$2.94
$1.30
3.
Total units transferred …………………………...
190,000
Less units in the beginning inventory …………
30,000
Units started and completed during April ……
160,000
Note: This answer assumes that the units in the beginning inventory
are completed before any other units are completed.
4. No, the manager should not be rewarded for good cost control. The
Mixing Department’s low unit cost for April occurred because the costs
Case 4-19 (45 minutes)
Weighted-Average Method
1. The revised computations follow:
Equivalent Units of Production:
Transferred
In Costs
Materials
Conversion
Transferred to finished goods ……………………………..
1,800
1,800
1,800
Ending work in process:
Transferred in costs: 600 units x 100% complete ….
600
Materials: 600 units x 0% complete …………………..
0
Conversion: 600 units x 35% complete……………….
210
Equivalent units of production …………………………....
2,400
1,800
2,010
Cost per Equivalent Unit:
Transferred
In Costs
Materials
Conversion
Cost of beginning work in process ……………………….
$ 4,068
$1,980
$ 2,160
Cost added during the period ……………………………..
17,940
6,210
13,920
Total cost (a) ………………………………………………….
$22,008
$8,190
$16,080
Equivalent units of production (b) ……………………….
2,400
1,800
2,010
Cost per equivalent unit, (a) ÷ (b) ………………………
$9.17
$4.55
$8.00
Case 4-19 (continued)
Transferred
In Costs
Materials
Conversion
Total
Ending work in process inventory:
Equivalent units of production (see above) ..
600
0
210
Cost per equivalent unit ………………………..
$9.17
$4.55
$8.00
Cost of ending work in process inventory ….
$5,502
$0
$1,680
$7,182
Units completed and transferred out:
Units transferred to finished goods ……..
1,800
1,800
1,800
Cost per equivalent unit ………………………..
$9.17
$4.55
$8.00
Cost of units completed and transferred out
$16,506
$8,190
$14,400
$39,096
2. The unit cost computed above is $21.72 (= $9.17 + $4.55 + $8.00) versus $25.71 on the original
Case 4-20 (90 minutes)
• This case is difficult—particularly part 3, which requires analytical skills.
1.
Computation of the Cost of Goods Sold:
Transferred In
Conversion
Units completed and sold …………………..
200,000
200,000
Ending work in process:
Transferred in:
10,000 units × 100% complete ……….
10,000
Conversion:
10,000 units × 30% complete …………
3,000
Equivalent units of production …………….
210,000
203,000
Transferred In
Conversion
Cost of beginning work in process ……….
$ 0
$ 0
Cost added during the period ……………..
39,375,000
20,807,500
Total cost (a) ………………………………….
$39,375,000
$20,807,500
Equivalent units of production (b) ……….
210,000
203,000
Cost per equivalent unit, (a) ÷ (b) ………
$187.50
$102.50
Cost of goods sold = 200,000 units × ($187.50 per unit + $102.50 per
unit) = $58,000,000
2. The estimate of the percentage completion of ending work in process
inventories affects the unit costs of finished goods and therefore the
3. Increasing the percentage of completion can increase net operating
income by reducing the cost of goods sold. To increase net operating