DO IT! 3-2 (Continued)
Work in Process—Packaging …………………………………….. 21,000
Work in Process—Mixing ……………………………………. 21,000
DO IT! 3-3
20,000 units + 12,000 units = 32,000 equivalent units of production for
materials.
(b) Since ending work in process is only 70% complete as to conversion
DO IT! 3-4
*22,000 + 4,000
(b) Equivalent units of production:
Materials Conversion
Units transferred out …………….. 22,000 22,000
DO IT! 3-4 (Continued)
(c) Cost reconciliation schedule
Costs accounted for
Transferred out (22,000 X $18) ………… $396,000
SOLUTIONS TO EXERCISES
EXERCISE 3-1
1. True.
2. True.
process cost accounting.
4. False. In a job order cost system, costs are tracked by individual jobs.
facturing cost elements.
6. True.
7. True.
used.
9. False. In a process cost system, costs are summarized in a production
cost report for each department.
10. True.
EXERCISE 3-2
April 30 Work in Process—Cooking ………………………… 21,000
30 Work in Process—Cooking ………………………… 8,500
30 Work in Process—Cooking ………………………… 31,500
30 Work in Process—Canning ………………………… 53,000
EXERCISE 3-3
(a) Work in process, May 1 400
Started into production 1,400
(b) and (c)
Equivalent Units
Materials
Conversion Costs
Units transferred out
Work in process, May 31
300 X 100%
300 X 40%
1,500
300
1,800
1,500
120
1,620
Direct
Materials
Conversion Costs
Work in process, May 1
Costs added
Total costs
Equivalent units
Unit costs
$2,040
5,160
$7,200
1,800
$4.00
$1,550
4,120*
$5,670
1,620
$3.50
(d) Transferred out (1,500 X $7.50) $11,250
(e) Work in process
Materials (300 X $4.00) $ 1,200
EXERCISE 3-4
1. Raw Materials Inventory …………………………………… 62,500
Accounts Payable …………………………………….. 62,500
2. Factory Labor ………………………………………………….. 60,000
Wages Payable …………………………………………. 60,000
5. Work in Process—Cutting ………………………………… 33,000
Work in Process—Assembly ……………………………. 27,000
Factory Labor …………………………………………… 60,000
6. Work in Process—Cutting (1,680 X $18) ……………. 30,240
Work in Process—Assembly (1,720 X $18) ………… 30,960
Manufacturing Overhead …………………………... 61,200
9. Cost of Goods Sold …………………………………………. 150,000
EXERCISE 3-5
(a)
January
May
Units to be accounted for
Beginning work in process
Started into production
Total units
Units accounted for
Transferred out
Ending work in process
Total units
0
11,000
11,000
9,000
2,000
11,000
0
23,000
23,000
16,000
7,000
23,000
(1)
Materials
(2)
Conversion Costs
January
March
May
July
11,000 ( 9,000 + 2,000)
15,000 (12,000 + 3,000)
23,000 (16,000 + 7,000)
11,500 (10,000 + 1,500)
10,200 ( 9,000 + 1,200)
12,900 (12,000 + 900)
21,600 (16,000 + 5,600)
10,600 (10,000 + 600)
EXERCISE 3-6
(a)
(1)
Materials
(2)
Conversion Costs
Units transferred out
Work in process, July 31
3,000 X 100%
3,000 X 60%
Total equivalent units
12,000
3,000
15,000
12,000
1,800
13,800
(b) Materials: $45,000 ÷ 15,000 = $3.00
Conversion costs: ($16,200 + $18,300) ÷ 13,800 = $2.50
Costs accounted for
Transferred out (12,000 X $5.50)
Work in process, July 31
Materials (3,000 X $3.00)
Conversion costs (1,800 X $2.50)
Total costs
$9,000
4,500
$66,000
13,500
EXERCISE 3-7
RICHARDS FURNITURE COMPANY
Sanding Department
Production Cost Report
For the Month Ended March 31, 2014
Equivalent Units
Quantities
Physical
Units
Materials
Conversion
Costs
Units to be accounted for
Work in process, March 1
Started into production
Total units
Units accounted for
Transferred out
0
12,000
12,000
9,000
9,000
9,000
Work in process, March 31
3,000
3,000
600
(3,000 X 20%)
Total units
12,000
12,000
9,600
Costs
Materials
Conversion
Costs
Total
Unit costs
Total cost
Equivalent units
Unit costs (a) ÷ (b)
Costs to be accounted for
Work in process, March 1
Started into production
Total costs
$33,000
12,000
$2.75
$60,000*
9,600
$6.25
$93,000
$9.00
$ 0
93,000
$93,000
Cost Reconciliation Schedule
Costs accounted for
Transferred out (9,000 X $9.00)
Work in process, March 31
Materials (3,000 X $2.75)
Conversion costs (600 X $6.25)
Total costs
$8,250
3,750
$81,000
12,000
$93,000
EXERCISE 3-8
(1)
Materials
(2)
Conversion
Costs
Units transferred out
Work in process, April 30
1,000 X 100%
1,000 X 40%
17,000
1,000
18,000
17,000
400
17,400
Materials
Conversion
Costs
Total
Total cost
Equivalent units
Unit costs
$900,000(1)
18,000
$ 50
$435,000(2)
17,400
$ 25
$1,335,000
$ 75
(c)
Transferred out (17,000 X $75)
Work in process
Materials (1,000 X $50)
Conversion costs (400 X $25)
Total costs
$50,000
10,000
$1,275,000
60,000
$1,335,000
EXERCISE 3-9
(a) Materials: 34,000* + 6,000 = 40,000
(b) Materials: $72,000/40,000 = $1.80
(c) Transferred out: 34,000 X $6.80 = $231,200
Ending work in process:
EXERCISE 3-10
(a)
Physical
Units
Equivalent Units
Beginning work in process
20,000
Units started into production
164,000
184,000
Conversion
Materials
Costs
Units transferred out
160,000
160,000
160,000
Ending work in process
24,000
24,000
14,400
(60% X 24,000)
184,000
184,000
174,400
(b)
Conversion
Materials
Costs
Total
Costs incurred
$101,200
$348,800
$450,000
Equivalent units
184,000
174,400
Unit costs
$0.55
$2.00
$2.55
(c)
Assignment of costs:
Transferred out (160,000 X $2.55)
$408,000
Ending work in process
Materials (24,000 X $.55)
$13,200
Conversion costs (14,400 X $2.00)
28,800
42,000
Total costs
$450,000
EXERCISE 3-11
Physical
Units
Work in process, September 1
Units started into production
Units transferred out
Work in process, September 30
1,600
38,400
40,000
35,000
5,000
40,000
EXERCISE 3-11 (Continued)
Equivalent Units
Materials
Conversion Costs
Units transferred out
Work in process
5,000 X 100%
5,000 X 10%
35,000
5,000
40,000
35,000
500
35,500
(b)
Materials
Work in process, September 1
Direct materials
Costs added to production
during September
Total materials cost
$ 20,000
177,200
$197,200
$197,200 ÷ 40,000 = $4.93 (Materials cost per unit)
Conversion Costs
Work in process, September 1
Conversion costs
Costs added to production
during September
Conversion costs
($125,680 + $257,140)
Total conversion costs
$ 43,180
382,820
$426,000
$426,000 ÷ 35,500 = $12.00 (Conversion cost per unit)
(c) Costs accounted for
Transferred out (35,000 X $16.93) $592,550