Problem 16-5B (Concluded)
Cost per EUP
Direct
Materials
Conversion
Costs incurred this period ……………...
$ 112,500
$ 616,000
÷ EUP …………………………………………….
÷ 232,500
÷ 226,000
Cost per EUP (rounded) …………………...
$2.726 per
EUP
Cost assignment and reconciliation
Costs transferred out
Cost of beginning work in process …………………………..
$ 57,340
Cost to complete beginning work in process
Direct materials (2,500 EUP x $0.484 per EUP) ……………….
$ 1,210
Conversion (4,000 EUP x $2.726 per EUP) ……………..……….
10,904
12,114
Costs of units started and completed this period
Direct materials (210,000 EUP x $0.484 per EUP) …..……….
101,640
Conversion (210,000 EUP x $2.726 per EUP) ………….……….
572,460
674,100
Total cost of goods finished this period ………………….……….
743,554
Costs of ending work in process
Direct materials (20,000 EUP x $0.484 per EUP) …….……….
9,680
Conversion (12,000 EUP x $2.726 per EUP) …………………….
32,712
42,392
Total costs accounted for* ……………………………………..……….
$785,946
* $106 difference from total costs to account for due to rounding
Problem 16-6B (45 minutes)
1.
Units in beginning inventory …………………………………..
62,500
Units started and completed …………………………………..
175,000
Total units transferred to finished goods ………………..
237,500
2. Equivalent units of production—FIFO
Direct
Equivalent units of production
Materials
Conversion
Units to complete beginning Work in Process
Direct materials (62,500 x 60%) …………………….…….
37,500
Conversion (62,500 x 20%) …………………………..
12,500
Units started and completed …………………………..
175,000
175,000
Units in ending work in process
Direct materials (76,250 x 80%) …………………….…….
61,000
Conversion (76,250 x 20%) …………………………..
_______
15,250
Equivalent units of production …………………………..
273,500
202,750
3. Cost per equivalent unit of direct materials and conversion—FIFO
Direct
Materials
Conversion
Costs incurred this period ……………………………..……..
$683,750
$446,050
÷ Equivalent units of production (from part 2) ..……..
273,500
202,750
Cost per equivalent unit of production …………..……..
$2.50 per
EUP
$2.20 per EUP
Problem 16-6B (Concluded)
4. Assignment of costs to output of department—FIFO
Costs of goods transferred out
Cost of beginning work in process inventory …….….
Direct materials ………………………………………………….
$ 99,075
Conversion ……………………………………………………....
53,493
$ 152,568
Costs to complete beginning work in process
Direct materials (37,500 EUP x $2.50 per EUP) …….
93,750
Conversion (12,500 EUP x $2.20 per EUP) ………..….
27,500
Total costs to complete …………………………………..….
121,250
Cost of units started and completed this period
Direct materials (175,000 EUP x $2.50 per EUP) .….
437,500
Conversion (175,000 EUP x $2.20 per EUP) ………….
385,000
Total cost of units started and completed ………..….
822,500
Total costs of goods transferred out………………….….
1,096,318
Cost of ending work in process inventory
Direct materials (61,000 EUP x $2.50 per EUP) …….
152,500
Conversion (15,250 EUP x $2.20 per EUP) ………..….
33,550
Total costs of ending work in process ……………..….
186,050
Total costs accounted for ………………………………….….
$1,282,368
Problem 16-7B (80 minutes)
Part 1
BELDA CO.—Cutting Department
Process Cost Summary – FIFO Method
For Month Ended March 31
Costs Charged to Production
Costs of beginning work in process
Direct materials ……………………………………………………….
$ 16,800
Conversion ………………………………………………………….…..
97,720
$ 114,520
Costs incurred this period
Direct materials ……………………………………………………….
223,200
Conversion ………………………………………………………….…..
1,233,960
1,457,160
Total costs to account for …………………………………………..
$1,571,680
Unit cost information
Units to account for
Units accounted for
Beginning work in process …..……..
10,000
Completed & transferred out …...
220,000
Units started this period ……….……..
250,000
Ending work in process ………..
40,000
Total units to account for ……..……..
260,000
Total units accounted for ……..
260,000
Equivalent units of production
Direct
Materials
Conversion
Units to complete beginning WIP
Direct materials (10,000 x 25%) ……..
2,500 EUP
Conversion (10,000 x 40%) …………….
4,000 EUP
Units started and completed ……………
210,000 EUP
210,000 EUP
Units of ending work in process
Direct materials (40,000 x 50%) ……..
20,000 EUP
Conversion (40,000 x 30%) …………….
__________
12,000 EUP
Equivalent units of production ………..
232,500 EUP
226,000 EUP
[Continued on next page]
Problem 16-7B (Continued)
Cost per EUP
Direct
Materials
Conversion
Costs incurred this period ……………...
$ 223,200
$1,233,960
÷ EUP …………………………………………….
÷ 232,500
÷ 226,000
Cost per EUP ………………………………...
$ 5.46 per
EUP
Cost assignment and reconciliation
Costs transferred out
Cost of beginning work in process …………………………..
$ 114,520
Cost to complete beginning work in process
Direct materials (2,500 EUP x $0.96 per EUP) ………..……….
$ 2,400
Conversion (4,000 EUP x $5.46 per EUP) ……………….……….
21,840
24,240
Costs of units started and completed this period
Direct materials (210,000 EUP x $0.96 per EUP) …….……….
201,600
Conversion (210,000 EUP x $5.46 per EUP) …………………….
1,146,600
1,348,200
Total cost of goods finished this period ………………….……….
1,486,960
Costs of ending work in process
Direct materials (20,000 EUP x $0.96 per EUP) ……………….
19,200
Conversion (12,000 EUP x $5.46 per EUP) ……………..……….
65,520
84,720
Total costs accounted for ……………………………………….……….
$1,571,680
Part 2
Mar. 31
Work in Process Inventory—Blending ………..………….
1,486,960
Work in Process Inventory—Cutting ……..………….
1,486,960
Transfer of goods to finished inventory.
Problem 16-7B (Concluded)
If equivalent units of production for the production department’s ending
inventory for March are overstated, then total equivalent units of
production is also overstated. This means the cost per equivalent unit for
1. Features of job order and process costing follow.
Job order costing
Process costing
Custom orders
Repetitive operations
Heterogeneous products
Homogeneous products
Low production volume
High production volume
High product flexibility
Low product flexibility
Low to medium standardization
High standardization
2. Given the size of her company, and the types of products she sells,
Santana should probably stay with job order costing. The furniture
she makes would be made in small batches, probably to customer
order. She is able to provide high product flexibility in order to meet
her customers’ needs, and her production probably has low
Comprehensive Problem (Continued)
Comprehensive Problem (Continued)
(Using weighted–average)
Cost assignment and reconciliation
Costs transferred out
Direct materials (11,000 EUP x $2.90 per EUP) ……………….
$ 31,900
Conversion (11,000 EUP x $21.75 per EUP) …………………….
239,250
$271,150
Costs of ending Work in Process
Direct materials (8,000 EUP x $2.90 per EUP) …………..…….
23,200
Conversion (3,200 EUP x $21.75 per EUP) ………………..…….
69,600
92,800
Total costs accounted for ………………………………………….…….
$363,950
Part 3 — Journal entries (Using weighted-average)
g.
Finished Goods Inventory …………………………..
271,150
Work in Process Inventory ……………………..……
271,150
Transferred goods to Finished Goods.
h.
Cash …………………………………………………………..…………
625,000
Sales ……………………………………………………....
625,000
Sold finished goods for cash.
Cost of Goods Sold …………………………………….…………
265,700
Finished Goods Inventory …………………………..
265,700
Transferred cost from finished goods
to cost of goods sold.