Problem 16-3A (75 minutes)
Part 1
Weighted average
Units
Fast Co. – units
Units in Beg. inventory
30,000
Beg. Inv
30,000
Units started
140,000
Started
140,000
Units in ending inventory
(20,000)
170,000
150,000
Trfr-out
Units transferred out
150,000
End. Inv
20,000
FAST CO.
Process Cost Summary – Weighted Average Method
For the month ended October 31
Costs Charged to Production
Costs of beginning work in process
Direct materials ……………………………………………………….
$ 17,100
Conversion ……………………………………………………………...
67,200
$ 84,300
Costs incurred this period
Direct materials …………………………..…………………………..
144,400
Conversion costs ……………………………………………………..
862,400
1,006,800
Total costs to account for …………………………………………..
$1,091,100
Unit cost information
Units to account for
Units accounted for
Beginning work in process …………………………..
30,000
Completed & transferred out ..…………
150,000
Units started this period ………..…………………
140,000
Ending work in process …….…………
20,000
Total units to account for …………………………..
170,000
Total units accounted for ….…………
170,000
[continued on next page]
Problem 16-3A (concluded)
Equivalent units of production
Direct
Materials
Conversion
Units completed & transferred out ….
150,000 EUP
150,000 EUP
Units of ending work in process
Direct materials (20,000 x 100%) …...
20,000 EUP
Conversion (20,000 x 80%) …………...
__________
16,000 EUP
Equivalent units of production
170,000 EUP
166,000 EUP
Cost per EUP
Direct
Materials
Conversion
Cost of beginning work in process …..
$17,100
$67,200
Costs incurred this period ……………...
144,400
862,400
Total costs …………………………..………...
$161,500
$929,600
÷ EUP …………………………………………….
170,000 EUP
166,000 EUP
Cost per EUP ………………………………….
$0.95 per EUP
$5.60 per EUP
Cost assignment and reconciliation
Costs transferred out
Direct materials (150,000 EUP x $0.95 per EUP) ….
$142,500
Conversion (150,000 x $5.60 per EUP) ………………..
840,000
$ 982,500
Costs of ending work in process
Direct materials (20,000 EUP x $0.95 per EUP) ……
19,000
Conversion (16,000 EUP x $5.60 per EUP) …………..
89,600
108,600
Total costs accounted for …………………………………….
$1,091,100
Part 2
Oct. 31
Finished Goods Inventory…………………………..…..……..
982,500
Work in Process Inventory…………………………..
982,500
Transfer of goods to finished goods inventory.
Problem 16-4A (80 minutes)
Part 1
TAMAR CO.
Process Cost Summary – Weighted Average Method
For Month Ended May 31
Costs Charged to Production
Costs of beginning work in process
Direct materials ……………………………………………………….
$ 19,800
Conversion ……………………………………………………….
221,940
$ 241,740
Costs incurred this period
Direct materials ……………………………………………………….
496,800
Conversion ……………………………………………………….
2,165,940
2,662,740
Total costs to account for…………………………………………..
$2,904,480
Unit cost information
Units to account for
Units accounted for
Beginning work in process…..………………………
3,000
Completed & transferred out …..…….
22,200
Units started this period …………………………..
21,600
Ending work in process ………..…….
2,400
Total units to account for …….…………………….
24,600
Total units accounted for …………….
24,600
Equivalent units of production
Direct
Materials
Conversion
Units completed & transferred out ……
22,200 EUP
22,200 EUP
Units of ending work in process ………
Direct materials (2,400 x 100%) ……..
2,400 EUP
Conversion (2,400 x 80%) ……………..
__________
1,920 EUP
Equivalent units of production ……….
24,600 EUP
24,120 EUP
Cost per EUP
Direct
Materials
Conversion
Cost of beginning work in process…..
$ 19,800
$ 221,940
Costs incurred this period ………………
496,800
2,165,940
Total costs……………………………………..
$516,600
$2,387,880
÷ EUP …………………………………………….
24,600 EUP
24,120 EUP
Cost per EUP…………………………..……..
$21.00 per
EUP
$99.00 per
EUP
[Continued on next page]
Problem 16-4A (Concluded)
Cost assignment and reconciliation
Costs transferred out
Direct materials (22,200 EUP x $21.00 per EUP) ……………..
$ 466,200
Conversion (22,200 x $99.00 per EUP) ………………….……….
2,197,800
$2,664,000
Costs of ending work in process
Direct materials (2,400 EUP x $21.00 per EUP) ……..………..
50,400
Conversion (1,920 EUP x $99.00 per EUP) …………….………..
190,080
240,480
Total costs accounted for ………………………………………………..
$2,904,480
Part 2
May 31
Finished Goods Inventory…………………………..
2,664,000
Work in Process Inventory…………………….…….
2,664,000
Transfer of goods to finished inventory.
Part 3
3a. Two major estimates are the: i) overhead allocation rate, and ii)
percentage of completion for materials and conversion.
3b. Management might want an overhead allocation rate that assigns the
least amount of overhead applied to their respective production
process, and we might anticipate underestimation of the percentage of
completion. If materials are added at the beginning of the process,
then this number is difficult to “manage.” More typically, management
might try to underestimate the percentage complete because this
reduces the equivalent units for conversion. This results in lowering
the dollar value assigned to these components of ending inventory.
Problem 16-5A (80 minutes)
Part 1
TAMAR CO.
Process Cost Summary – FIFO Method
For Month Ended May 31
Costs Charged to Production
Costs of beginning work in process
Direct materials ……………………………………………….………
$ 19,800
Conversion ……………………………………………………....
221,940
$ 241,740
Costs incurred this period
Direct materials ……………………………………………….………
496,800
Conversion ……………………………………………………....
2,165,940
2,662,740
Total costs to account for ………………………………….……….
$2,904,480
Unit cost information
Units to account for
Units accounted for
Beginning work in process ….……………………….
3,000
Completed & transferred out …..……
22,200
Units started this period ……..……………………
21,600
Ending work in process ………..……
2,400
Total units to account for…….…………………….
24,600
Total units accounted for ……………
24,600
Equivalent units of production
Direct
Materials
Conversion
Units to complete beginning WIP
Direct materials (3,000 x 0%) ……………..………..
0 EUP
Conversion (3,000 x 60%) ………………….……….
1,800 EUP
Units started and completed ……………….………..
19,200 EUP
19,200 EUP
Units of ending work in process
Direct materials (2,400 x 100%) ………….………..
2,400 EUP
Conversion (2,400 x 80%) ………………….……….
_________
1,920 EUP
Equivalent units of production …………….………..
21,600 EUP
22,920 EUP
[Continued on next page]
Problem 16-5A (Concluded)
Cost per EUP
Direct
Materials
Conversion
Costs incurred this period ………………
$ 496,800
$2,165,940
÷ EUP …………………………..………………..
÷ 21,600
÷ 22,920
Cost per EUP …………………………………
$23.00 per
EUP
$94.50 per
EUP
Cost assignment and reconciliation
Costs transferred out
Cost of beginning work in process ………………………
$ 241,740
Cost to complete beginning work in process
Direct materials (0 EUP x $23.00 per EUP)…………..
$ 0
Conversion (1,800 EUP x $94.50 per EUP) …………..
170,100
170,100
Costs of units started and completed this period
Direct materials (19,200 EUP x $23.00 per EUP) ….
441,600
Conversion (19,200 EUP x $94.50 per EUP) …………
1,814,400
2,256,000
Total cost of goods finished this period ……………….
2,667,840
Costs of ending work in process
Direct materials (2,400 EUP x $23.00 per EUP) ……
55,200
Conversion (1,920 EUP x $94.50 per EUP) …………..
181,440
236,640
Total costs accounted for …………………………………….
$2,904,480
Part 2
May 31
Finished Goods Inventory……………………….….
2,667,840
Work in Process Inventory…………………………..
2,667,840
Transfer of goods to finished inventory.
Problem 16-6A (45 minutes)
1.
Units in beginning inventory …………………………………..
37,500
Units started and completed …………………………………..
150,000
Total units transferred to finished goods ………………..
187,500
2. Equivalent units of production—FIFO
Direct
Equivalent units of production—FIFO
Materials
Conversion
Units to complete beginning Work in Process
Direct materials (37,500 x 40%) …………………………...
15,000
Conversion (37,500 x 60%) ………………………………….
22,500
Units started and completed …………………………………
150,000
150,000
Units in ending work in process
Direct materials (51,250 x 60%) …………………………...
30,750
Conversion (51,250 x 20%) ………………………………….
_______
10,250
Equivalent units of production ……………………………..
195,750
182,750
3. Cost per equivalent unit of direct materials and conversion—FIFO
Direct
Cost per equivalent unit—FIFO
Materials
Conversion
Costs incurred this period …………………………………….
$ 505,035
$ 396,568
÷ Equivalent units of production (from part 2) ……….
195,750
182,750
Cost per equivalent unit of production ………………….
$2.58 per
EUP
$2.17 per
EUP
Problem 16-6A (Concluded)
4. Assignment of costs to output of department—FIFO
Costs of goods transferred out
Cost of beginning work in process inventory …….….
Direct materials ………………………………………………….
$74,075.00
Conversion ……………………………………………………....
28,493.00
$ 102,568.00
Costs to complete beginning work in process
Direct materials (15,000 EUP x $2.58 per EUP) …….
38,700.00
Conversion (22,500 EUP x $2.17 per EUP) ………..….
48,825.00
Total costs to complete …………………………………..….
87,525.00
Cost of units started and completed this period
Direct materials (150,000 EUP x $2.58 per EUP) .….
387,000.00
Conversion (150,000 EUP x $2.17 per EUP) ………….
325,500.00
Total cost of units started and completed ………..….
712,500.00
Total costs of goods transferred out………………….….
902,593.00
Cost of ending work in process inventory
Direct materials (30,750 EUP x $2.58 per EUP) …….
79,335.00
Conversion (10,250 EUP x $2.17 per EUP) ………..….
22,242.50
Total costs of ending work in process ……………..….
101,577.50
Total costs accounted for ………………………………….….
$1,004,170.50
Problem 16-7A (80 minutes)
Part 1
DENGO CO.—Roasting Department
Process Cost Summary – FIFO Method
For Month Ended October 31
Costs Charged to Production
Costs of beginning work in process
Direct materials ………………………………………………..……..
$ 9,900
Conversion ……………………………………………………….
110,970
$ 120,870
Costs incurred this period
Direct materials ………………………………………………..……..
248,400
Conversion ……………………………………………………….
1,082,970
1,331,370
Total costs to account for …………………………………..………
$1,452,240
Unit cost information
Units to account for
Units accounted for
Beginning work in process ….……………………….
3,000
Completed & transferred out ………..
22,200
Units started this period ……..……………………
21,600
Ending work in process ……………...
2,400
Total units to account for…….…………………….
24,600
Total units accounted for …………….
24,600
Equivalent units of production
Direct
Materials
Conversion
Units to complete beginning WIP
Direct materials (3,000 x 0%) ……………………….
0 EUP
Conversion (3,000 x 60%) …………………..………
1,800 EUP
Units started and completed ………………..……….
19,200 EUP
19,200 EUP
Units of ending work in process
Direct materials (2,400 x 100%) …………..……….
2,400 EUP
Conversion (2,400 x 80%) …………………..………
_________
1,920 EUP
Equivalent units of production ……………..……….
21,600 EUP
22,920 EUP
[Continued on next page]
Problem 16-7A (Continued)
Cost per EUP
Direct
Materials
Conversion
Costs incurred this period ………………
$ 248,400
$1,082,970
÷ EUP …………………………..………………..
÷ 21,600
÷ 22,920
Cost per EUP …………………………………
$11.50 per
EUP
$47.25 per
EUP
Cost assignment and reconciliation
Costs transferred out
Cost of beginning Work in Process………………………
$ 120,870
Cost to complete beginning Work in Process
Direct materials (0 EUP x $11.50 per EUP)…………..
$ 0
Conversion (1,800 EUP x $47.25 per EUP) …………..
85,050
85,050
Costs of units started and completed this period
Direct materials (19,200 EUP x $11.50 per EUP) ….
220,800
Conversion (19,200 EUP x $47.25 per EUP) …………
907,200
1,128,000
Total cost of goods finished this period ……………….
1,333,920
Costs of ending Work in Process
Direct materials (2,400 EUP x $11.50 per EUP) ……
27,600
Conversion (1,920 EUP x $47.25 per EUP) …………..
90,720
118,320
Total costs accounted for …………………………………….
$1,452,240
Part 2
Oct. 31
Work in Process Inventory—Blending ………..………………..
1,333,920
Work in Process Inventory—Roasting …..………………..
1,333,920
Transfer of goods across processing
departments.