Exercise 16–19 (Continued)
(1)
Beginning work in process in punching
$ 7,500
Direct materials added
$ 60,000
Direct labor added
12,000
Factory overhead added
15,000
Total manufacturing costs added
87,000
Total costs in process in punching department
$ 94,500
(2)
Total costs in process in punching department
$ 94,500
Less ending work in process
6,000
Costs transferred to bending
$ 88,500
(3)
Beginning work in process in bending
$ 9,750
Total costs added
[?]
Total costs in process in bending department
$249,150
Total costs added = $249,150 – $9,750 = $239,400
Direct materials added
$ [?]
Direct labor added
30,750
Factory overhead added
36,900
Costs transferred from punching
88,500
Total costs added (from above)
$239,400
Direct materials added = $239,400-$30,750-$36,900-$88,500
= $83,250
(4)
Total costs in process in bending department
$249,150
Ending work in process
12,750
Costs transferred to finished goods
$236,400
(5)
Beginning Finished Goods inventory
$ 18,000
Add costs transferred to finished goods
236,400
Cost of goods available for sale
$254,400
(6)
Cost of goods available for sale
$254,400
Less ending inventory
[?]
Cost of goods sold
$231,900
Ending inventory = $254,400 – $231,900 = $22,500
Exercise 16–20 (30 minutes)
1.
Units to account for
Units Accounted For
Beginning work in process ….……………..
2,000
Completed & transferred out .………………………….
23,000
Units started this period …….……………..
28,000
Ending work in process ……..……………………
7,000
Total units to account for …..……………..
30,000
Total units accounted for …..………………………
30,000
2. and 3.
Equivalent Units of Production (EUP)
Direct
Materials
Conversion
Units completed and transferred out ……………..
23,000 EUP
23,000 EUP
Units of ending work in process ……………..……..
Direct materials (7,000 x 100%) ……………………..
7,000 EUP
Conversion (7,000 x 40%) …………………………..
.
2,800 EUP
Equivalent units of production ……………….…………
30,000 EUP
25,800 EUP
4. and 5.
Cost per EUP
Direct
Materials
Conversion
Costs of beginning work in process ………
$ 45,000
$ 56,320
Costs incurred this period ……………………..
375,000
341,000
Total costs ……………………………………………
$420,000
$397,320
÷ EUP ……………………………………………………
30,000
25,800
Cost per equivalent unit of production …….
$14.00 per
EUP
$15.40
per EUP
[Continued on next page]
Exercise 16–20 (concluded)
6.
Costs transferred out
Direct materials [$14.00 per EUP x 23,000 EUP] ..…..
$322,000
Conversion [$15.40 per EUP x 23,000 EUP] …………..
354,200
Total transferred out ………………………………………..…..
$676,200
7.
Cost of ending work in process
Direct materials [$14.00 per EUP x 7,000 EUP] ….…..
98,000
Conversion [$15.40 per EUP x 2,800 EUP] ………..…..
43,120
Total ending work in process …………………………..
141,120
Total costs accounted for …………………………………..…..
$817,320
Exercise 16-21 (10 minutes)
1.
Raw Materials Inventory …………………………………..……
80,000
Accounts Payable ……………………………………………
80,000
Purchased materials on credit.
2.
Work in Process Inventory ………………………………..……
42,000
Raw Materials Inventory ……………………………..……
42,000
Used direct materials in production.
3.
Factory Overhead …………………………..………………..……
22,500
Raw Materials Inventory ……………………………..……
22,500
Used indirect materials.
Exercise 16–22 (10 minutes)
1.
Work in Process Inventory ………………………………..……
75,000
Factory Payroll Payable…………………………..…..……
75,000
Incurred direct labor costs.
2.
Factory Overhead…………………………..………………………
20,000
Factory Payroll Payable…………………………..…..……
20,000
Incurred indirect labor costs.
3.
Factory Payroll Payable…………………………………….……
95,000
Cash …………………………………………………………..……
95,000
Paid factory payroll
Exercise 16–23 (5 minutes)
1.
Factory Overhead …………………………..………………..……
38,750
Cash ………………………………………………………….……
38,750
Incurred and paid overhead costs.
2.
Work in Process Inventory ………………………………..……
82,500
Factory Overhead …………………………..…………..……
82,500
Applied overhead: $75,000 x 110%
Exercise 16–24 (5 minutes)
1.
Finished Goods Inventory ………………………………………
135,600
Work in Process Inventory-Assembly ………….……
135,600
Transfer goods from production to finished goods.
2.
Accounts Receivable ………………………………………..……
315,000
Sales …………………………………………………………..……
315,000
Sale of goods on credit.
Cost of Goods Sold …………………………………………..……
175,000
Finished Goods Inventory …………………………………
175,000
Record cost of goods sold.
Exercise 16–25 (25 minutes)
1.
Oct. 31
Work in Process Inventory …………………………….……….
522,000
Raw Materials Inventory …………………………..
522,000
Direct materials used in production.
2.
Oct. 31
Work in Process Inventory …………………………….……….
130,000
Factory Payroll Payable …………………………..
130,000
Direct labor incurred.
3.
Oct. 31
Work in Process Inventory …………………………….……….
227,500
Factory Overhead …………………………………………….
227,500
Overhead applied: $130,000 x 175%
4.
Oct. 31
Finished Goods Inventory …………………………….……….
595,000
Work in Process Inventory ……………………….….
595,000
Transfer goods from production to finished
goods.
5.
Oct. 31
Accounts Receivable …………………………………….……….
950,000
Sales ……………………………………………………….
950,000
Sales on credit.
Oct. 31
Cost of Goods Sold ……………………………………………….
540,000
Finished Goods Inventory ……………………….….
540,000
Record cost of sales.
Exercise 16–26 (25 minutes)
a. Purchased raw materials on credit at a cost of $52,000.
b. Used direct materials costing $42,000 in production.
c. Incurred direct labor costing $32,000 in production.
Exercise 16–27 (10 minutes)
A hybrid costing system contains features of both process costing and job
order costing. A hybrid system of processes requires a hybrid costing
Problem 16-1A (45 minutes)
Part 1: Cost of goods transferred and cost of goods sold
Beginning work in process inventory ……………………….….
$ 435,000
Direct materials used in production …………………………..
157,500
Direct labor used in production………………………………..……..
780,000
Overhead applied (115% of direct labor cost) …………………..
897,000
Total production costs …………………………………………..……..
2,269,500
Less ending work in process inventory ………………….……..
(515,000)
Transferred to finished goods inventory (a) ……………..……..
$1,754,500
Beginning finished goods inventory ……………………….….
$ 633,000
Plus goods transferred from production ………………….……..
1,754,500
Goods available for sale …………………………..……………..……..
2,387,500
Less ending finished goods inventory ……………………..……
(605,000)
Cost of goods sold (b) …………………………………………….……..
$1,782,500
Part 2: Summary journal entries
a.
May 31
Raw Materials Inventory …………………………….………….
250,000
Accounts Payable ………………………………..………….
250,000
Purchased raw materials.
b.
May 31
Work in Process Inventory…………………………..
157,500
Raw Materials Inventory ………………………..…
157,500
Used direct materials.
c.
May 31
Factory Overhead ……………………………………..………….
60,000
Raw Materials Inventory ……………………….….
60,000
Used indirect materials.
Problem 16-1A (Continued)
d.
May 31
Work in Process Inventory …………………………..
780,000
Factory Payroll Payable ………………………..…
780,000
Incurred direct labor costs.
e.
May 31
Factory Overhead ……………………………………..………….
750,000
Factory Payroll Payable ………………………..…
750,000
Incurred indirect labor costs.
f.
May 31
Factory Payroll Payable ……………………………..………….
1,530,000
Cash ……………………………………………………….
1,530,000
Paid factory payroll.
g.
May 31
Factory Overhead ……………………………………..………….
87,000
Other Accounts ……………………………………………….
87,000
Incurred other overhead costs.
h.
May 31
Work in Process Inventory…………………………..
897,000
Factory Overhead …………………………………………….
897,000
Applied overhead at 115% of direct labor cost.
i.
May 31
Finished Goods Inventory…………………………..
1,754,500
Work in Process Inventory…………………….…….
1,754,500
Transferred completed products from
production to finished goods inventory.
j.
May 31
Accounts Receivable …………………………………………….
2,500,000
Sales …………………………..……………………….….
2,500,000
Sold finished goods.
May 31
Cost of Goods Sold …………………………………..………….
1,782,500
Finished Goods Inventory …………………….…….
1,782,500
To record cost of goods sold for May.
Problem 16-2A (50 minutes)
Part 1
(a) and (b) Equivalent units with respect to direct materials and conversion
Direct
Equivalent units of production (EUP)
Materials
Conversion
Units completed and transferred out ……………….
700,000
700,000
Units of ending Work in Process …………………….
Direct materials (180,000 x 100%) ………………
180,000
Conversion (180,000 x 30%)……………………….
_______
54,000
Total equivalent units of production ………………..
880,000
754,000
Part 2
Cost per equivalent unit of production
Direct
Materials
Conversion
Costs of beginning Work in Process ………………………
$ 420,000
$ 139,000
Costs incurred this period ……………………………..………
2,220,000
3,254,000
Total costs …………………………………………………….…
$2,640,000
$3,393,000
÷ Equivalent units of production …………………….…….
880,000 EUP
754,000 EUP
Cost per equivalent unit of production ……………………
$3.00 per EUP
$4.50 per EUP
Part 3 Assigning product costs to units
Costs transferred out
Direct materials (700,000 EUP x $3.00 per EUP) …….
$2,100,000
Conversion (700,000 EUP x $4.50 per EUP) ……….….
3,150,000
(a) Total costs transferred out …………………………..
$5,250,000
Costs of ending work in process
Direct materials (180,000 EUP x $3.00 per EUP) …….
540,000
Conversion (54,000 EUP x $4.50 per EUP) …………….
243,000
(b) Total costs of ending work in process ………….….
783,000
Total costs accounted for* ………………………………….….
$6,033,000
*This equals the sum of the total direct materials cost and the
total conversion costs ($2,640,000 + $3,393,000 = $6,033,000).
Problem 16-2A (Concluded)
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