146 Chapter 6
c. Cost of goods transferred out
$10,413,000
Ending WIP
707,625
Total cost to account for
$11,120,625
32. a. BI cost
$ 458,482.00
$ 91,504.80
325,208.40
739,536.00
1,156,249.20
$1,614,731.20
b. Goods started and completed = 1,570,000 – 42,600 = 1,527,400
Total FIFO cost per EUP = $10.74 + $13.88 + $24.80 = $49.42
Total cost of BI transferred
$ 1,614,731.20
Cost of goods S&C (1,527,400 × $49.42)
75,484,108.00
Total cost of goods transferred
$ 77,098,839.20
c. Cost of ending inventory:
DM (28,400 × 35% × $10.74)
$106,755.60
DL (28,400 × 15% × $13.88)
59,128.80
OH (28,400 × 25% × $24.80)
176,080.00
Total cost of EI
$341,964.40
d. Total cost to account for
Cost of goods transferred
$77,098,839.20
Cost of ending inventory
341,964.40
Total cost to account for
$77,440,080.60
33. a. Because direct material (other than packaging) is 100 percent complete at the
start of production, the number of EUP shown for direct material is also the
number of units in BI.
Material (54,000 ÷ 54,000) = 100%
b. Beginning WIP Inventory:
DM (other than packaging)
$789,040
DL
91,862
Overhead
145,908
$1,026,810
Complete beginning WIP Inventory:
Packaging (54,000 × 100% × $3.00)
$162,000
DL (54,000 × 70% × $10.84)
409,752
Overhead (54,000 × 65% × $7.68)
269,568
841,320
Total cost to account for
$1,868,130
Chapter 6 147
c. # of units S&C = Units completed – Units in BI
d. DM (other than packaging) (12,000 × 100% × $29.50)
$354,000
Labor (12,000 × 30% × $10.84)
39,024
Overhead (12,000 × 55% × $7.68)
50,688
Total
$443,712
34. a. Beginning WIP
1,000
Started
8,400
Units to account for
9,400
Units
Material
Conversion
Beginning WIP
1,000
1,000
1,000
Started & completed
8,100
8,100
8,100
Ending WIP
300
240
210
Units accounted for
9,400
9,340
9,310
Total
Material
Conversion
Beginning WIP
$ 5,006.30
$ 4,133.20
$ 873.10
Current period
86,354.00
62,928.00
23,426.00
Total costs
$91,360.30
$67,061.20
$24,299.10
EUP
÷ 9,340
÷ 9,310
Cost per EUP
$9.79
$7.18
$2.61
b. Cost transferred out = 9,100 × $9.79 = $89,089
c. Ending WIP
DM (240 × $7.18)
$1,723.20
CC (210 × $2.61)
548.10
Total
$2,271.30
d.
Units
Material
Conversion
Complete BI (40%, 70%)
1,000
400
700
Started & completed
8,100
8,100
8,100
Ending WIP
300
240
210
Units accounted for
9,400
8,740
9,010
Total
Material
Conversion
Beginning WIP
$ 5,006.30
Current Period
86,354.00
$62,928.00
$23,426.00
Total costs
$91,360.30
EUP
÷ 8,740
÷ 9,010
Cost per EUP
$9.80
$7.20
$2.60
148 Chapter 6
accessible website, in whole or in part.
e. Transferred out:
Costs in BI
$5,006.30
Cost to complete BI
DM (400 × $7.20)
2,880.00
CC (700 × $2.60)
1,820.00
$ 9,706.30
Started & completed (8,100 × $9.80)
79,380.00
Total cost transferred
$89,086.30
f. Ending WIP
DM (240 × $7.20)
$1,728
CC (210 × $2.60)
546
Total
$2,274
g. WIP Inventory
62,928
RM Inventory
62,928
WIP Inventory
13,070
Wages Payable (or Cash)
13,070
WIP Inventory
10,356
Factory Overhead Control
10,356
FG Inventory
89,089
WIP Inventory
89,089
35. a. Ending WIP Inventory
EUP
Cost per EUP
Total Cost
Transferred in (4,000 × 100%)
4,000
$10
$40,000
Material (4,000 × 0%)
0
2
0
Conversion (4,000 × 80%)
3,200
6
19,200
Total cost
$18
$59,200
c. Finished Goods Inventory
450,000
WIP Inventory––Casing Dept.
450,000
36. a. Beginning WIP
Inventory
5,000
Beginning WIP
Inventory
5,000
Transferred in
80,000
Started & completed
74,000
Units to account for
85,000
Ending WIP Inventory
6,000
Units accounted for
85,000
Units
Trans. In
Material
Conversion
Beginning WIP Inventory
5,000
5,000
5,000
5,000
Started & completed
74,000
74,000
74,000
74,000
Ending WIP Inventory
6,000
6,000
0
4,800
EUP (WA)
85,000
85,000
79,000
83,800
Chapter 6 149
$6,000
Conversion (4,800 $0.17)
Total ending WIP cost
$6,816
Beginning WIP
Inventory
Beginning WIP
5,000
Started
Started & completed
33,200
Units to account for
Ending WIP Inventory
6,800
Units accounted for
45,000
b. Costs
Total
Trans. In
Material
Conversion
Beginning WIP Inventory
$ 8,643
$ 7,550
$ 0
$ 1,093
Current period
104,261
80,000
10,270
13,991
Total cost to account for
$112,904
$87,550
$10,270
$15,084
Divided by EUP
÷ 85,000
÷ 79,000
÷ 83,800
Cost per EUP
$1.34
$1.03
$0.13
$0.18
c. 79,000 × $1.34 = $105,860
d. Transferred in (6,000 × $1.03)
$6,180
Conversion (4,800 × $0.18)
864
Total ending WIP cost
$7,044
37. a. Beginning WIP
Inventory
5,000
Beginning WIP
Inventory
5,000
Transferred in
80,000
Started & completed
74,000
Units to account for
85,000
Ending WIP Inventory
6,000
Units accounted for
85,000
Units
Tran. In
Material
Conversion
Complete BI
5,000
0
5,000
3,500
Started & completed
74,000
74,000
74,000
74,000
Ending WIP Inventory
6,000
6,000
0
4,800
EUP (WA)
85,000
80,000
79,000
82,300
b. Costs
Total
Trans. In
Material
Conversion
Beginning WIP
Inventory
$ 8,643
Current period
104,261
$80,000
$10,270
$13,991
Total cost to account for
$112,904
Divided by EUP
÷ 80,000
÷ 79,000
÷ 82,300
Cost per EUP
$1.30
$1.00
$0.13
$0.17
c. Beginning WIP costs
$8,643
Cost to complete:
DM (5,000 $0.13)
650
CC (3,500 $0.17)
595
$ 9,888
Started and completed (74,000 $1.30)
96,200
Cost transferred out
$106,088
150 Chapter 6
Units
Material
Conversion
Beginning WIP Inventory
5,000
5,000
5,000
Started & completed
33,200
33,200
33,200
Ending WIP Inventory
6,800
6,800
4,080
EUP (WA)
45,000
45,000
42,280
33,200 = 38,200
Assembly:
Beginning WIP
Inventory
2,000
Beginning WIP
Inventory
2,000
Started
38,200
Started & completed
32,100
Units to account for
40,200
Ending WIP Inventory
6,100
Units accounted for
40,200
Units
Trans. In
Material
Conversion
Beginning WIP Inventory
2,000
2,000
2,000
2,000
Started & completed
32,100
32,100
32,100
32,100
Ending WIP Inventory
6,100
6,100
0
915
EUP (WA)
40,200
40,200
34,100
35,015
b. Fabrication:
Units
Material
Conversion
Beginning WIP
Inventory
5,000
0
3,750
Started & completed
33,200
33,200
33,200
Ending WIP Inventory
6,800
6,800
4,080
EUP (FIFO)
45,000
40,000
41,030
Assembly:
Units
Trans. In
Material
Conversion
Beginning WIP Inventory
2,000
0
2,000
1,300
Started & completed
32,100
32,100
32,100
32,100
Ending WIP Inventory
6,100
6,100
0
915
EUP (FIFO)
40,200
38,200
34,100
34,315
39. a. Beginning WIP Inventory
0
Started & completed
2,400
Started
2,500
Ending WIP Inventory
100
Total
2,500
Units accounted for
2,500
Material
Labor
Overhead
Started and completed
2,400
2,400
2,400
Ending WIP Inventory
100
25
35
EUP
2,500
2,425
2,435
Chapter 6 151
accessible website, in whole or in part.
Cost of goods transferred out:
Direct material:
Dacron (250 × $10)
$ 2,500
Denim (480 × $8)
3,840
Cotton (1,670 × $12)
20,040
$26,380
Direct labor (2,400 × $9)
21,600
Overhead (2,400 × $6)
14,400
Total
$62,380
b. Cost of ending WIP Inventory:
Direct material:
Dacron (50 × $10)
$500
Denim (20 × $8)
160
Cotton (30 × $12)
360
$1,020
Direct labor (25 × $9)
225
Overhead (35 × $6)
210
Total
$1,455
0
Started & completed
105
Started
130
Ending WIP Inventory
25
Total
130
Units accounted for
130
Material
Conversion
Started and completed
105
105
Ending WIP Inventory
25
15
EUP
130
120
Cost of goods completed:
Direct material:
Glass (65 × $24)
$1,560
Metal (12 × $15)
180
Natural (28 × $7)
196
$1,936
Conversion (105 × $23)
2,415
Total
$4,351
b. Cost of ending WIP Inventory:
Direct material:
Glass (5 × $24)
$120
Metal (13 × $15)
195
Natural (7 × $7)
49
$364
Conversion (25 × 60% × $23)
345
Total
$709
41. a. Beginning WIP Inventory
12,000
Started
310,000
Units to account for
322,000
Beginning WIP Inventory
12,000
Started & completed
302,000
Ending WIP Inventory
8,000
Units accounted for
322,000
152 Chapter 6
Ingred.
Packaging
Conversion
Beginning WIP Inventory
0
12,000
3,600
Started and completed
302,000
302,000
302,000
Ending WIP Inventory
8,000
0
4,800
EUP
310,000
314,000
310,400
b. Standard cost of goods completed: 314,000 × $0.67 = $210,380
c. Cost of ending WIP Inventory:
Ingredients (8,000 × $0.25)
$2,000
Conversion (4,800 × $0.37)
1,776
Total
$3,776
42. a. DM (180,000 × 100% × $0.10)
$18,000
CC (180,000 × 45% × $0.11)
8,910
Total cost in BI
$26,910
b. DM (144,000 × 100% × $0.10)
$14,400
CC (144,000 × 65% × $0.11)
10,296
Total cost in EI
$24,696
c. Beginning WIP Inventory
180,000
Started
1,300,000
Units to account for
1,480,000
Total units to account for
1,480,000
Ending WIP Inventory
(144,000)
Units transferred out
1,336,000
d.
Material
Labor
OH
To complete BI (units)
0
99,000
99,000
Started & completed
1,156,000
1,156,000
1,156,000
Ending inventory
144,000
93,600
93,600
Equivalent units (FIFO)
1,300,000
1,348,600
1,348,600
Multiply by unit cost
× 0.10
× 0.02
× 0.09
Standard cost of period
$ 130,000
$ 26,972
$ 121,374
Actual cost of period
(184,000)
(27,126)
(118,500)
Variance
$ (54,000) U
$ (154) U
$ 2,874 F
e. Work in Process Inventory
130,000
Material Variance
54,000
Raw Material Inventory
184,000
Work in Process Inventory
26,972
Labor Variance
154
Wages Payable (or Cash)
27,126
Work in Process Inventory
121,374
Manufacturing Overhead
118,500
Overapplied Overhead
2,874
Chapter 6 153
43. a & b.
Units
Material
Conversion
Beginning inventory (60%; 70%)
16,000
Gallons started
360,000
Gallons to account for
376,000
Beginning inventory completed
16,000
6,400
4,800
Gallons started and completed
349,200
349,200
349,200
Total gallons transferred
365,200
Ending inventory (40%; 20%)
8,000
3,200
1,600
Normal spoilage*
2,800
0
0
Gallons accounted for (FIFO EUP)
376,000
358,800
355,600
44. Normal spoilage allowed = 120,000 pounds × 0.08 = 9,600 pounds
Units
Material
Conversion
Beginning inventory
36,000
Pounds started
120,000
Pounds to account for
156,000
Beginning WIP Inventory
36,000
0
19,800
Started and completed
90,000
90,000
90,000
Ending WIP Inventory
21,600
21,600
3,240
Normal spoilage
8,400
0
0
Pounds accounted for (FIFO)
156,000
111,600
113,040
Total
Material
Conversion
Beginning inventory cost
$24,800
Current costs
72,972
$ 39,060
$ 33,912
Total costs
$97,772
Divided by EUP
÷ 111,600
÷ 113,040
Cost per EUP
$0.65
$0.35
$0.30
Cost Assignment
Transferred out:
Beginning WIP Inventory cost
$24,800
Conversion cost to complete (19,800 × $0.30)
5,940
Total cost of beginning inventory
$30,740
Started & completed (90,000 × $0.65)
58,500
$89,240
Ending WIP Inventory:
Material (21,600 × $0.35)
$ 7,560
Conversion (3,240 × $0.30)
972
8,532
Total cost accounted for
$97,772
45. a. Units to account for = 20,000 + 120,000 = 140,000 units
154 Chapter 6
accessible website, in whole or in part.
b. Units to account for
140,000
Units completed
(116,400)
Units in ending WIP Inventory
(16,000)
Spoiled units
7,600
c.
Units
Material
Conversion
Beginning inventory
20,000
Units started
120,000
Units to account for
140,000
Transferred out
116,400
116,400
116,400
Ending inventory
16,000
16,000
3,200
Normal spoilage
3,600
0
0
Abnormal spoilage
4,000
4,000
4,000
Units accounted for
140,000
136,400
123,600
The normal spoilage is considered continuous because it is shrinkage.
d. Using the “method of neglect,” the cost of normal spoilage is automatically
spread among all of the remaining units produced (including the abnormal
spoilage).
46. a.
Units
Material
Conversion
Beginning inventory
40,000
Pounds started
425,000
Pounds to account for
465,000
BI completed
40,000
0
6,000
Started & completed*
405,000
405,000
405,000
Ending inventory
10,000
10,000
2,500
Normal spoilage
2,000
0
0
Abnormal spoilage
8,000
8,000
5,600
EUP (FIFO)
465,000
423,000
419,100
*Amount necessary to balance the calculation.
b. Ending inventory:
Material (10,000 × $0.08)
$ 800
Conversion (2,500 × $0.15)
375
Total cost
$1,175
c. Abnormal spoilage:
Material (8,000 × $0.08)
$ 640
Conversion (5,600 × $0.15)
840
Total cost (treated as a loss)
$1,480
Chapter 6 155
PROBLEMS
47. a.
Units
Material
Conversion
Beginning WIP Inventory
200,000
Units started
1,000,000
Units to account for
1,200,000
Beginning WIP Inventory
200,000
200,000
200,000
Started & completed
700,000
700,000
700,000
Ending WIP Inventory
300,000
300,000
210,000
Units accounted for
1,200,000
1,200,000
1,110,000
b. BI conversion cost = $671,875 × 1.6 = $1,075,000
Current period conversion cost = $3,976,250 × 1.6 = $6,362,000
Total
Material
Conversion
Cost in BI
$ 2,275,000
$1,200,000
$1,075,000
Current cost
14,162,000
7,800,000
6,362,000
Total cost to account for
$16,437,000
$9,000,000
$7,437,000
Divided by EUP
÷ 1,200,000
÷ 1,110,000
Cost per EUP
$14.20
$7.50
$6.70
c. Transferred out (900,000 × $14.20)
$12,780,000
Ending inventory:
Material (300,000 × $7.50)
$2,250,000
Conversion (210,000 × $6.70)
1,407,000
3,657,000
Total cost accounted for
$16,437,000
48. a. (1)
Material
Labor
Overhead
BI units
100,000
100,000
100,000
Units started & completed
1,100,000
1,100,000
1,100,000
EI unit
400,000
240,000
240,000
EUP
1,600,000
1,440,000
1,440,000
(2)
Total
Material
Labor
Overhead
BI
$ 1,115,500
$ 750,000
$ 215,000
$ 150,500
Current
12,628,500
5,650,000
4,105,000
2,873,500
Total
$13,744,000
$6,400,000
$4,320,000
$3,024,000
Divided by EUP
÷ 1,600,000
÷ 1,440,000
÷ 1,440,000
Cost per EUP
$9.10
$4.00
$3.00
$2.10
(3) Beginning FG Inventory
$ 0
CGM (1,200,000 × $9.10)
10,920,000
Goods available for sale
$10,920,000
Ending FG Inventory
(124,000)
CGS
$10,796,000
b. Finished Goods Inventory
10,920,000
Work in Process Inventory
10,920,000
Cost of Goods Sold
10,796,000
Finished Goods Inventory
10,796,000