17-21
17-30 (25 min.) Weighted-average method.
1. Since direct materials are added at the beginning of the assembly process, the units in this
department must be 100% complete with respect to direct materials. Solution Exhibit 17-30A
2. & 3. Solution Exhibit 17-30B summarizes the total Assembly Department costs for October
2012, calculates cost per equivalent unit of work done to date, and assigns these costs to units
completed (and transferred out) and to units in ending work in process using the weighted–
average method.
SOLUTION EXHIBIT 17-30A
SOLUTION EXHIBIT 17-30B
Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit,
and Assign Total Costs to Units Completed and to Units in Ending Work in Process;
Weighted-Average Method of Process Costing, Assembly Department of Larsen Company,
for October 2012.
Total
Production
Costs
Direct
Materials
Conversion
Costs
(Step 3) Work in process, beginning (given)
$1,652,750
$1,250,000
$ 402,750
Costs added in current period (given)
6,837,500
4,500,000
2,337,500
Total costs to account for
$8,490,250
$5,750,000
$2,740,250
(Step 4) Costs incurred to date
$5,750,000
$2,740,250
Divide by equivalent units of work done to date
(Solution Exhibit 17-30A)
25,000
24,250
Cost per equivalent unit of work done to date
$ 230
$ 113
(Step 5) Assignment of costs:
Completed and transferred out (22,500 units)
$7,717,500
(22,500* $230) + (22,500* $113)
Work in process, ending (2,500 units)
772,750
(2,500† $230) + (1,750† $113)
Total costs accounted for
$8,490,250
$5,750,000 + $2,740,250
*Equivalent units completed and transferred out from Solution Exhibit 17-30A, Step 2.
†Equivalent units in work in process, ending from Solution Exhibit 17-30A, Step 2.
1. Work in Process––Assembly Department 4,500,000
2. Work in Process––Assembly Department 2,337,500
3. Work in Process––Testing Department 7,717,500
Work in Process––Assembly Department 7,717,500
1. The equivalent units of work done in the current period in the Assembly Department in
October 2012 for direct materials and conversion costs are shown in Solution Exhibit 17-32A.
2. The cost per equivalent unit of work done in the current period in the Assembly
3. Solution Exhibit 17-32B summarizes the total Assembly Department costs for October
2012, and assigns these costs to units completed (and transferred out) and units in ending work in
The FIFO ending inventory is lower than the weighted-average ending inventory by
$17,750. This is because FIFO assumes that all the higher-cost prior-period units in work in
process are the first to be completed and transferred out while ending work in process consists of
only the lower-cost current-period units. The weighted-average method, however, smoothes out
cost per equivalent unit by assuming that more of the lower-cost units are completed and
17-25
SOLUTION EXHIBIT 17-32B
Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit, and Assign Total Costs to
Units Completed and to Units in Ending Work in Process;
FIFO Method of Process Costing, Assembly Department of Larsen Company for October 2012.
Total
Production
Costs
Direct
Materials
Conversion
Costs
(Step 3) Work in process, beginning (given)
$1,652,750
$1,250,000
$ 402,750
Costs added in current period (given)
6,837,500
4,500,000
2,337,500
Total costs to account for
$8,490,250
$5,750,000
$2,740,250
(Step 4) Costs added in current period
$4,500,000
$2,337,500
Divide by equivalent units of work done in
current period (Solution Exhibit 17-32A)
20,000
21,250
Cost per equivalent unit of work done in current period
$ 225
$ 110
(Step 5) Assignment of costs:
Completed and transferred out (22,500 units):
Work in process, beginning (5,000 units)
Costs added to beg. work in process in current period
$1,652,750
220,000
$1,250,000 + $ 402,750
(0* $225) + (2,000* $110)
Total from beginning inventory
Started and completed (17,500 units)
Total costs of units completed & transferred out
Work in process, ending (2,500 units)
Total costs accounted for
1,872,750
5,862,500
7,735,250
755,000
$8,490,250
(17,500† $225) + (17,500† $110)
(2,500# $225) + (1,750# $110)
$5,750,000 + $2,740,250
*Equivalent units used to complete beginning work in process from Solution Exhibit 17-32A, Step 2.
†Equivalent units started and completed from Solution Exhibit 17-32A, Step 2.
#Equivalent units in ending work in process from Solution Exhibit 17-32A, Step 2.
17-26
17-33 (30 min.) Transferred-in costs, weighted-average method (related to 17-30 to 17-32).
1. Transferred-in costs are 100% complete, and direct materials are 0% complete in both
beginning and ending work-in–process inventory. The reason is that transferred-in costs are
3. Solution Exhibit 17-33B summarizes total Testing Department costs for October 2012,
method.
4. Journal entries:
a. Work in Process––Testing Department 7,717,500
Work in Process––Assembly Department 7,717,500
17-27
SOLUTION EXHIBIT 17-33A
Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units;
Weighted-Average Method of Process Costing,
Testing Department of Larsen Company for October 2012.
(Step 1)
(Step 2)
Equivalent Units
Flow of Production
Physical
Units
Transferred-in
Costs
Direct
Materials
Conversion
Costs
Work in process, beginning (given) 7,500
Transferred in during current period (given) 22,500
To account for 30,000
Completed and transferred out
during current period 26,300 26,300 26,300 26,300
Work in process, ending* (given) 3,700
3,700 100%; 3,700 0%; 3,700 60% 3,700 0 2,220
Accounted for 30,000
Equivalent units of work done to date 30,000 26,300 28,520
*Degree of completion in this department: transferred-in costs, 100%; direct materials, 0%; conversion costs, 60%.
17-28
SOLUTION EXHIBIT 17-33B
Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit, and Assign Total Costs to Units Completed
and to Units in Ending Work in Process;
Weighted-Average Method of Process Costing,
Testing Department of Larsen Company for October 2012.
Total
Production
Costs
Transferred
-in Costs
Direct
Materials
Conversion
Costs
(Step 3) Work in process, beginning (given)
$ 3,767,960
$ 2,932,500
$ 0
$ 835,460
Costs added in current period (given)
21,378,100
7,717,500
9,704,700
3,955,900
Total costs to account for
$25,146,060
$10,650,000
$9,704,700
$4,791,360
(Step 4) Costs incurred to date
$10,650,000
$9,704,700
$4,791,360
Divide by equivalent units of work done to date
(Solution Exhibit 17-33A)
30,000
26,300
28,520
Equivalent unit costs of work done to date
$ 355
$ 369
$ 168
(Step 5) Assignment of costs:
Completed and transferred out (26,300 units)
$23,459,600
(26,300* $355) + (26,300* $369) + (26,300* $168)
Work in process, ending (3,700 units)
1,686,460
(3,700† $355) + (0† $369) + (2,220† $168)
Total costs accounted for
$25,146,060
$10,650,000 + $9,704,700 + $4,791,360
*Equivalent units completed and transferred out from Solution Exhibit 17-33A, Step 2.
†Equivalent units in ending work in process from Solution Exhibit 17-33A, Step 2.
17-29
1. As explained in Problem 17-33, requirement 1, transferred-in costs are 100% complete
and direct materials are 0% complete in both beginning and ending work-in-process inventory.
3. Solution Exhibit 17-34B summarizes total Testing Department costs for October 2012,
4. Journal entries:
a. Work in Process––Testing Department 7,735,250
Work in Process––Assembly Department 7,735,250
17-30
SOLUTION EXHIBIT 17-34A
Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units;
FIFO Method of Process Costing,
Testing Department of Larsen Company for October 2012.
(Step 1)
(Step 2)
Equivalent Units
Flow of Production
Physical
Units
Transferred–
in Costs
Direct
Materials
Conversion
Costs
Work in process, beginning (given)
Transferred-in during current period (given)
To account for
7,500
22,500
30,000
(work done before current period)
Completed and transferred out during current
period:
From beginning work in process§
7,500
(100% − 100%); 7,500
(100% − 0%);
7,500
(100% − 70%)
7,500
0
7,500
2,250
Started and completed
18,800
100%; 18,800
100%; 18,800
100%
18,800†
18,800
18,800
18,800
Work in process, ending* (given)
3,700
100%; 3,700
0%; 3,700
60%
3,700
_____
3,700
0
2,220
Accounted for
30,000
Equivalent units of work done in current period
22,500
26,300
23,270
§ Degree of completion in this department: Transferred-in costs, 100%; direct materials, 0%; conversion costs, 70%.
†26,300 physical units completed and transferred out minus 7,500 physical units completed and transferred out from
beginning work-in-process inventory.
*Degree of completion in this department: transferred-in costs, 100%; direct materials, 0%; conversion costs, 60%.