Quick Study 16-23 (10 minutes)
1.
Raw Materials Inventory ………………………………………..
62,000
Cash ………………………………………………………………..
62,000
Purchase of raw materials inventory.
2.
Work in Process Inventory ………………………………..…..
50,000
Raw Materials Inventory …………………………………..
50,000
Direct materials used in production.
Quick Study 16-24 (10 minutes)
1.
Work in Process Inventory ………………………………..…..
125,000
Factory Payroll Payable ……………………………….…..
125,000
To record direct labor used in production.
2.
Factory Overhead ……………………………………………..…..
10,000
Factory Payroll Payable ……………………………….…..
10,000
To record indirect labor used in production.
3.
Factory Payroll Payable …………………………………….…..
135,000
Cash ………………………………………………………………..
135,000
To record payment of factory payroll.
Quick Study 16-25 (15 minutes)
1.
Factory Overhead ……………………………………………..…..
9,000
Raw Materials Inventory …………………………………..
9,000
To record indirect materials used in production.
2.
Factory Overhead ……………………………………………..…..
156,000
Other accounts …………………………………………..…..
156,000
To record other overhead costs.
3.
Work in Process Inventory …………………………..………..
175,000
Factory Overhead ……………………………………….…..
175,000
To record overhead applied ($125,000 x 140%).
Quick Study 16-26 (10 minutes)
Finished Goods Inventory ……………………………………..
275,000
Work in Process Inventory …………………………..
275,000
Transfer of finished goods from production.
Quick Study 16-27 (5 minutes)
If the company is successful in reducing water usage, its raw materials
EXERCISES
Exercise 16-1 (10 minutes)
1. Process operation 7. Job order operation
2. Process operation 8. Process operation
3. Process operation 9. Job order operation
4. Process operation 10. Job order operation
5. Job order operation 11. Job order operation
6. Process operation 12. Process operation
Exercise 16-2 (10 minutes)
a. Job order operation. e. Job order operation.
Exercise 16-3 (10 minutes)
1. F 5. G
2. A 6. B
3. D 7. E
4. C
Exercise 16-4 (30 minutes)
1. Beginning inventory is 100% complete with respect to materials.
Ending inventory is 100% complete with respect to materials.
EUP for Materials
Units of
Product
Goods completed (80,000 EUP x 100%) ………………………………
80,000
Ending work in process (16,000 EUP x 100%) ……………………..
16,000
Total EUP …………………………………………………………………………..
96,000
2. Beginning inventory is 40% complete with respect to materials.
Ending inventory is 75% complete with respect to materials.
Units of
EUP for Materials
Product
Goods completed (80,000 EUP x 100%) ………………………………
80,000
Ending work in process (16,000 EUP x 75%) ……………………….
12,000
Total EUP …………………………………………………………………………..
92,000
3. Beginning inventory is 60% complete with respect to materials.
Ending inventory is 30% complete with respect to materials.
Units of
EUP for Materials
Product
Goods completed (80,000 EUP x 100%) ………………………………
80,000
Ending work in process (16,000 EUP x 30%) ……………………….
4,800
Total EUP …………………………………………………………………………..
84,800
Exercise 16-5 (30 minutes)
1. Beginning inventory is 100% complete with respect to materials.
Ending inventory is 100% complete with respect to materials.
EUP for Materials
Units of
Product
To complete beginning work in process (24,000 EUP x 0%) …..….
0
Units started and completed (56,000 EUP x 100%) ………………..….
56,000
Ending work in process (16,000 EUP x 100%) ……………………….….
16,000
Total EUP …………………………………………………………………………….….
72,000
2. Beginning inventory is 40% complete with respect to materials.
Ending inventory is 75% complete with respect to materials.
Units of
EUP for Materials
Product
To complete beginning work in process (24,000 EUP x 60%) …….
14,400
Units started and completed (56,000 EUP x 100%) ………………..….
56,000
Ending work in process (16,000 EUP x 75%) …………………………..
12,000
Total EUP …………………………………………………………………………….….
82,400
3. Beginning inventory is 60% complete with respect to materials.
Ending inventory is 30% complete with respect to materials.
Units of
EUP for Materials
Product
To complete beginning work in process (24,000 EUP x 40%) …….
9,600
Units started and completed (56,000 EUP x 100%) ………………..….
56,000
Ending work in process (16,000 EUP x 30%) …………………………..
4,800
Total EUP …………………………………………………………………………….….
70,400
Exercise 16-6 (30 minutes)
1.
Equivalent units of production—Weighted average
Direct
Materials
Conversion
Units completed & transferred out (295,000 x 100%) .……….
295,000
295,000
Units of ending work in process
Direct materials, 30,000 x 80% ……………………………..……….
24,000
Conversion, 30,000 x 30% …………………………………………….
______
9,000
Equivalent units of production ……………………………….……….
319,000
304,000
2.
Cost per equivalent unit—Weighted average
Direct
Materials
Conversion
Costs of beginning work in process ………………………..
$ 44,800
$ 15,300
Costs incurred this period ……………………………………....
1,231,200
896,700
Total costs ……………………………………………………………..
$1,276,000
$912,000
÷ Equivalent units of production (from part 1) ………....
319,000
304,000
Cost per equivalent unit of production …………………....
$4.00 per
EUP
$3.00 per
EUP
3.
Cost assignment—Weighted average
Costs of units transferred out
Direct materials (295,000 EUP x $4.00 per EUP) ……
$1,180,000
Conversion (295,000 EUP x $3.00 per EUP) …………..
885,000
Total costs transferred out ……………………………………..
$2,065,000
Costs of ending work in process
Direct materials (24,000 EUP x $4.00 per EUP) ……..
96,000
Conversion (9,000 EUP x $3.00 per EUP) ………………
27,000
Total costs of ending work in process …………………….
123,000
Total costs assigned* …………………………………………….
$2,188,000
*Equals costs to account for of $2,188,000, computed as $60,100 + $1,231,200 + $896,700
Exercise 16-7 (30 minutes)
1.
Equivalent units of production—FIFO
Direct
Materials
Conversion
Units to complete beginning work in process
Direct materials (25,000 x 40%) ……………………………………..
Conversion (25,000 x 60%) ………………………………….………..
Units started and completed (270,000 x 100%) ……….………..
10,000
270,000
15,000
270,000
Units of ending work in process
Direct materials, 30,000 x 80% …………………………….………..
24,000
Conversion, 30,000 x 30% …………………………………..………..
______
9,000
Equivalent units of production ………………………………………..
304,000
294,000
2.
Cost per equivalent unit—FIFO
Direct
Materials
Conversion
Costs incurred this period ……………………………………….
$1,231,200
$896,700
÷ Equivalent units of production (from part 1) ………….
304,000
294,000
Cost per equivalent unit of production …………………….
$4.05 per
EUP
$3.05 per
EUP
Exercise 16-8 (20 minutes)
1. Units transferred out
Units
Dept. 1 – units
Units in Beg. inventory
60,000
Beg. Inv
60,000
Units started
322,000
Started
322,000
Units in ending inventory
(82,000)
382,000
300,000
Trfr-out
Units transferred out
300,000
End. Inv
82,000
2. EUP
Equivalent units of production – weighted-average
Direct
Materials
Conversion
Units completed & transferred out (300,000 x 100%)………
300,000
300,000
Units in ending work in process
Direct materials, (82,000 x 80%)
65,600
Conversion, (82,000 x 30%)
24,600
Equivalent units of production
365,600
324,600
Exercise 16-9 (20 minutes)
1. Cost per EUP
Cost per equivalent unit – weighted-average
Direct
Materials
Conversion
Costs of beginning inventory
$118,472
$48,594
Costs incurred this period
850,368
649,296
Total costs
$968,840
$697,890
÷ Equivalent units of production
365,600
324,600
Cost per equivalent unit of production
$2.65
$2.15
Exercise 16-9 (continued)
2.
Cost assignment and reconciliation – weighted-average
Costs of units transferred out
Direct materials (300,000 EUP x $2.65 per EUP)
$795,000
Conversion costs (300,000 EUP x $2.15 per EUP)
645,000
Total cost of 300,000 units transferred out
$1,440,000
Costs of units in ending inventory
Direct materials (65,600 EUP x $2.65 per EUP)
$173,840
Conversion costs (24,600 EUP x $2.15 per EUP)
52,890
Total cost of 82,000 units in ending inventory
226,730
Total costs assigned
$1,666,730
Costs to be assigned:
Beginning inventory
$167,066
Direct materials – current period
850,368
Conversion costs – current period
649,296
Total costs to be assigned
$1,666,730
Dept. 1 – WIP
Beg. Inv
167,066
DM
850,368
Conv
649,296
1,666,730
1,440,000
Transferred out
End. Inv.
226,730
Exercise 16-10 (20 minutes)
1.
Units
Units
Units in beginning inventory
60,000
60,000
60,000
Units started
322,000
322,000
240,000
Units in ending inventory
(82,000)
382,000
300,000
Units transferred out
300,000
82,000
2.
Equivalent units of production – FIFO
Direct
Materials
Conversion
Complete beginning inventory (60,000 x 40% Mtl, 60% Conv.)
24,000
36,000
Units started and completed (240,000 x 100%)
240,000
240,000
Units of ending work in process
Direct materials, 82,000 x 80%
65,600
Conversion, 82,000 x 30%
24,600
Equivalent units of production
329,600
300,600
Exercise 16–11 (20 minutes)
1.
Cost per equivalent unit – FIFO
Direct
Materials
Conversion
Costs incurred this period
850,368
649,296
÷ Equivalent units of production
329,600
300,600
Cost per equivalent unit of production
$2.58
$2.16