PROBLEM 18.8
A
WILSON DYNAMICS (continued)
b.
(1) 4,000
(3) Forging Direct Conversion
Materials Materials Costs
Costs charged to Assembly Department in July* 1,224,000$ 720,000$ 191,400$
Requirements for the Assembly Dept. in July
Flow of physical units: Assembly Department
Units in beginning inventory, July 1
Cost per equivalent unit in July
PROBLEM 18.8
A
WILSON DYNAMICS (concluded)
(4) 1,920,000
Work in Process: Assembly 1,920,000
Finished Goods Inventory
To record the transfer of 60,000 units to the Finished Goods
SOLUTIONS TO PROBLEMS SET B
20 Minutes, Easy PROBLEM 18.1B
STREET SMARTS
a.
5,000
(
1,000
)
4,000
Body Wiring
Materials Materials Conversion
Body materials
(1,000 units require 0% to complete) 0
Wiring materials
(1,000 units require 0% to complete) 0
(
)
Step 1: Determine flow of physical goods
Units transferred out in March
Beginning inventory in process, March 1
Units started and completed in March
To finish beginning inventory, March 1:
Step 2: Determine equivalent units
Input resources required
PROBLEM 18.1B
STREET SMARTS (concluded)
Body Wiring
Materials Materials Conversion
Body materials
(2,000 units require 0% to complete) 0
Wiring materials
(2,000 units require 100% to complete) 2,000
Conversion
Step 2: Determine equivalent units consumed
Input resources required
To finish beginning inventory, April 1:
20 Minutes, Easy PROBLEM 18.2B
MOWTOWN MANUFACTURIN
G
a. (1)
$49 [($192,000 + $48,000 + $54,000) ÷ 6,000 units]
30 Minutes, Medium PROBLEM 18.3B
MOWTOWN MANUFACTURING
Part I. Physical Flow Total Units
Inputs:
• Beginning WIP -0-
•Started 6,000
Mowers to account for: 6,000
Part II. Equivalent Units Direct Materials Conversion Costs
Based on monthly input:
•Beginning WIP -0- -0-
Part III. Cost per Equivalent Unit Total Unit Cost Direct Materials Conversion Costs
Part IV. Total Cost Assignment Total Costs Direct Materials Conversion Costs
Costs to account for:
•Cost of beginning WIP $ -0-
•Cost added during the period 948,000
Total cost to account for $948,000
Costs accounted for:
•Cost of goods transferred
Beginning WIP last period $ -0- $ -0- $ -0-
a6,000 EU @ $112 = $672,000 b6,000 EU @ $46 = $276,000
PROBLEM 18.4B
SNACK HAPP
Y
a. 120,000
Materials Inventor
y
25,000
Direct Labo
r
60,000
Manufacturin
g
Overhead 35,000
g
30 Minutes, Medium
Work in Process: Mixing Department
Summary of costs incurred in mixing 20,000 lbs.
of batter in August. Cost $6 per lb.
(
$120,000/20,000 lbs.
)
.
r
35 Minutes, Medium PROBLEM 18.5B
BALFANZ COMPAN
Y
a. Direct
Materials Conversion
0
Input resources required
To finish beginning inventory, September 1:
Direct materials (50,000 units require 0% to complete)
35 Minutes, Medium PROBLEM 18.6B
BALFANZ COMPANY
a. Production Cost Report
Part I. Physical Flow Total Units
Inputs:
•Beginning WIP 50,000
Part II. Equivalent Units Direct Materials Conversion
Consumed
Part III. Cost Per Equivalent Unit Total Unit Cost Direct Materials Conversion Costs
Input costs in September $1,200,000 $2,212,000
Finishing Department, Month of September
PROBLEM 18.6B
BALFANZ COMPANY (concluded)
Total Costs Direct Materials Conversion Costs
$ 270,000
3,412,000
$3,682,000
b.
Management can compare production cost reports from month to month to help control costs
and assess efficiency of their processes. For example, the equivalent units can be tracked over
time to understand and evaluate capacity utilization. In addition, the cost per equivalent unit
can be evaluated over time to determine if costs are out of control for either direct materials
or conversion costs. For example, if material costs are rising per equivalent unit over time,
management could investigate if suppliers are charging more or if the production process is
creating more scrap and waste and needs to be adjusted.
d70,000 EU @ $4 = $280,000
e56,000 EU @ $7 = $392,000
a30,000 EU @ $7 = $210,000
• Cost of goods transferred
Costs accounted for:
Total cost to account for
Part IV. Total Cost Assignment
Costs to account for:
•Cost of beginning WIP
•Cost added during the period