*PROBLEM 3-7A
(a) Bicycles
(1) Equivalent units—Materials
Physical
Units
Materials
Added
This Period
Work in process, March 1
Started and completed
Work in process, March 31
Total
200
950
300
1,450
(1,250 – 300)
* 0%*
100%
100%
*All materials are added at the beginning of the production process
Equivalent units—Conversion
Physical
Units
Conversion
Added
This Period
Work in process, March 1
200
20% (1 – .8) 40
Started and completed
Work in process, March 31
Total
950
300
1,450
(1,250 – 300)
100%
40%
(2) Unit costs
Materials
Conversion
Costs in March (a)
Equivalent units (b)
Unit costs (a) ÷ (b)
$50,000
1,250
$ 40
**$55,500**
1,110
$ 50
*PROBLEM 3-7A (Continued)
(3) Assignment of costs to units transferred out and in process
Costs to Be
Assigned
Assignment of Costs
Equivalent
Units
Unit
Cost
Total Costs
Assigned
Total mfg. costs
Transferred out
***$124,780***
Work in process, March 1
Conversion
Started and completed
Total costs transferred out
40
950
$50
$90
$19,280
2,000
85,500
$106,780
Work in process, March 31
Materials
Conversion costs
Total costs
300
120
$40
$50
12,000
6,000
18,000
$124,780
***Work in process, March 1, $19,280 + Materials $50,000 + Labor $25,500 + Overhead
$30,000
Tricycles
(1) Equivalent units—Materials
Physical
Units
Materials
Added
This Period
Equivalent
Units
Work in process, March 1
100
* 0%*
0
Started and completed
740 (800 – 60)
100%
740
Work in process, March 31
Total
60
900
100%
60
800
Equivalent units—Conversion
Physical
Units
Conversion
Added
This Period
Equivalent
Units
Work in process, March 1
100
25% (1 – .75) 25
Started and completed
740 (800 – 60)
100%
740
Work in process, March 31
Total
60
900
25%
15
780
*PROBLEM 3-7A (Continued)
(2) Unit costs
Materials
Conversion
Costs in March (a)
Equivalent units (b)
Unit costs (a) ÷ (b)
$30,400
800
$ 38
$35,100**
780
$ 45
**Direct Labor $15,100 + Manufacturing Overhead $20,000
Costs to Be
Assigned
Assignment of Costs
Equivalent
Units
Unit
Cost
Total Costs
Assigned
Total mfg. costs
Transferred out
***$71,625***
Work in process, March 1
Conversion
Started and completed
Total costs transferred out
25
740
$45
$83
$ 6,125
1,125
61,420
$68,670
Work in process, March 31
Materials
Conversion costs
Total costs
60
15
$38
$45
2,280
675
2,955
$71,625
***Work in process, March 1, $6,125 + Materials $30,400 + Labor $15,100 + Overhead
$20,000
*PROBLEM 3-7A (Continued)
(b) RONDELI COMPANY
Production Cost Report—Bicycles
For the Month Ended March 31
Equivalent Units
Quantities
Physical
Units
Materials
Conversion
Costs
(Step 1)
(Step 2)
Units to be accounted for
Work in process, March 1
Started into production
Total units
Units accounted for
Completed and transferred out
Work in process, March 1
Started and completed
Work In process, March 31
Total units
200
1,250
1,450
200
950
300
1,450
0
950
300
1,250
40
950
120
1,110
Costs
Materials
Conversion
Costs
Total
Unit costs (Step 3)
Costs in March (a)
Equivalent units (b)
Unit costs [(a) ÷ (b)]
Costs to be accounted for
Work in process, March 1
Started into production
Total costs
Cost Reconciliation Schedule (Step 4)
Work in process, March 31
Materials (300 X $40)
Conversion costs (120 X $50)
$50,000
1,250
$ 40
12,000
6,000
$ 55,500
1,110
$ 50
$ 19,280
105,500*
$124,780
18,000
$105,500
$ 90
*($50,000 + $25,500 + $30,000)
PROBLEM 3-1B
1. Raw Materials Inventory ……………………………………… 25,000
2. Work in Process—Blending ………………………………… 18,930
3. Factory Labor …………………………………………………….. 25,770
4. Work in Process—Blending ………………………………… 15,320
6. Work in Process—Blending (900 X $28) ………………. 25,200
7. Work in Process—Packaging ……………………………… 44,940
8. Finished Goods Inventory …………………………………… 67,490
9. Accounts Receivable ………………………………………….. 90,000
Cost of Goods Sold ……………………………………………. 62,000
PROBLEM 3-2B
(a)
Physical units
Units to be accounted for
Work in process, January 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, January 31
Total units
0
50,000
50,000
47,500
2,500
50,000
(b)
Equivalent units
Materials
Conversion Costs
Units transferred out
Work in process, January 31
2,500 X 100%
2,500 X 40%
Total equivalent units
47,500
2,500
50,000
47,500
1,000
48,500
(c)
Unit Costs
Materials
Conversion costs
Total manufacturing
$10.20 ($510,000 ÷ 50,000)
$ 5.00 ($242,500 ÷ 48,500)
$15.20 ($10.20 + $5.00)
(d) Costs accounted for
Transferred out (47,500 X $15.20) ……………… $722,000
Work in process, January 31
PROBLEM 3-2B (Continued)
(e) STEINER CORPORATION
Molding Department
Production Cost Report
For the Month Ended January 31, 2014
Equivalent Units
Quantities
Physical
Units
Materials
Conversion
Costs
(Step 1)
(Step 2)
Units to be accounted for
Work in process, January 1
Started into production
Total units
Units accounted for
Transferred out
0
50,000
50,000
47,500
47,500
47,500
Work in process, January 31
2,500
2,500
1,000
(2,500 X 40%)
Total units
50,000
50,000
48,500
Costs
Materials
Conversion
Costs
Total
Unit costs (Step 3)
Total cost
Equivalent units
Unit costs (a) ÷ (b)
Costs to be accounted for
Work in process, January 1
Started into production
Total costs
(a)
(b)
$510,000
50,000
$10.20
$242,500
48,500
$5.00
$752,500
$15.20
$ 0
752,500
$752,500
Cost Reconciliation Schedule (Step 4)
Costs accounted for
Transferred out (47,500 X $15.20)
Work in process, January 31
Materials (2,500 X $10.20)
Conversion costs (1,000 X $5.00)
Total costs
$25,500
5,000
$722,000
30,500
$752,500
PROBLEM 3-3B
(a) (1) Physical units
R12
Refrigerators
F24
Freezers
Units to be accounted for
Work in process, June 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, June 30
Total units
0
20,000
20,000
16,000
4,000
20,000
0
20,000
20,000
17,500
2,500
20,000
(2) Equivalent units
R12 Refrigerators
Materials
Conversion
Costs
Units transferred out
Work in process, June 30
(4,000 X 100%)
(4,000 X 75%)
Total equivalent units
16,000
4,000
20,000
16,000
3,000
19,000
F24 Freezers
Materials
Conversion
Costs
Units transferred out
Work in process, June 30
(2,500 X 100%)
(2,500 X 60%)
Total equivalent units
17,500
2,500
20,000
17,500
1,500
19,000
PROBLEM 3-3B (Continued)
(3) Unit costs
R12
Refrigerators
F24
Freezers
Materials ($840,000 ÷ 20,000)
($720,000 ÷ 20,000)
Conversion costs ($665,000(a) ÷ 19,000)
($551,000(b) ÷ 19,000)
Total
$42
35
$77
$36
29
$65
(a)$245,000 + $420,000
(b)$259,000 + $292,000
(4) R12 Refrigerators
Costs accounted for
Transferred out (16,000 X $77) …………. $1,232,000
Work in process
F24 Freezers
Costs accounted for
Transferred out (17,500 X $65) ………….. $1,137,500
PROBLEM 3-3B (Continued)
(b) BORMAN CORPORATION
Stamping Department—Plant A
Production Cost Report
For the Month Ended June 30, 2014
Equivalent Units
Quantities
Physical
Units
Materials
Conversion
Costs
(Step 1)
(Step 2)
Units to be accounted for
Work in process, June 1
Started into production
Total units
Units accounted for
Transferred out
0
20,000
20,000
16,000
16,000
16,000
Work in process, June 30
4,000
4,000
3,000
(4,000 X 75%)
Total units
20,000
20,000
19,000
Costs
Materials
Conversion
Costs
Total
Unit costs (Step 3)
Total cost
Equivalent units
Unit costs (a) ÷ (b)
Costs to be accounted for
Work in process, June 1
Started into production
Total costs
(a)
(b)
$840,000
20,000
$ 42
$665,000
19,000
$ 35
$1,505,000
$ 77
$ 0
1,505,000
$1,505,000
Cost Reconciliation Schedule (Step 4)
Costs accounted for
Transferred out (16,000 X $77)
Work in process, June 30
Materials (4,000 X $42)
Conversion costs (3,000 X $35)
Total costs
$168,000
105,000
$1,232,000
273,000
$1,505,000